The very day after the expiry, on 11 December, of certain provisions of China's accession protocol to the WTO, which allowed the other member countries of the organisation to treat China as a non-market economy in their anti-dumping calculation methods, China announced that it had brought a complaint about the so-called substitute country method, used by the United States and the EU to calculate the anti-dumping duty to apply to Chinese exports, to the WTO.
When it joined the WTO in 2001, China agreed that it would not be considered as a market economy by the other member states for a period of 15 years. During this time, these countries would be able to use the so-called substitute country method (known in EU terminology as the analogue country method) to draw comparisons with third countries in order to determine whether China was selling its products below market price, with the practical consequence of being able to impose heavy anti-duty taxes on the grounds that the prices practised in China did not reflect the reality of the market.
As this clause expired on 11 December, China is now calling for the other member countries of the WTO to respect its accession protocol.
"Regretfully, the United States and European Union have yet to fulfil this obligation", the Chinese trade ministry announced on its website on Monday. The ministry went on to stress that the anti-dumping measures of the United States and the EU heavily penalised Chinese exports and jobs in China and that the country reserves the right to defend determinedly its legal rights in the framework of WTO rules.
Internal debate continues at EU on a new anti-dumping calculation method
In Europe, negotiations on resolving the issue of changing China's status at the WTO continue. On 9 November, the Commission imposed a new anti-dumping calculation methodology to settle the issue of China's treatment in the EU's anti-dumping investigations when the provisions on this matter contained in China's accession protocol to the WTO expired.
This new method to calculate dumping margins against imports from countries with considerable market distortions, and in which the State exercises a considerable influence over the economy, does not confer market economy status (MES), is neutral with regard to third countries and may be applied to all member countries of the WTO (see EUROPE 11664).
"We are not going to make a formal declaration that China is a market economy. However, we respect the commitment made at the WTO. The EU is reforming its anti-dumping arsenal to make it neutral towards the country of origin, market economy or not. It will apply in the same way to all, to China, to Russia or to Norway. There will no longer be any specific treatment for China. China knows what we are preparing. Of course, it may take a complaint to the WTO over the principle, but this will take time. I do not believe that there will be any case regarding a specific incident of dumping after 11 December once our new methodology is in place", the Commissioner for Trade, Cecilia Malmström, told the French daily newspaper Le Figaro over the weekend (our translation).
This proposal, which has been criticised by Beijing, could not be approved by the Council of the EU, where the member states are divided over the issue, before the deadline of 11 December, or by the European Parliament, which has still to examine it. This will give China time systematically to attack any EU decision regarding anti-dumping measures taken against it before the WTO, observers anticipate. At the end of last week, MEP Frank Proust (EPP, France) said that a lot of time has been wasted. He went on to stress that the EU had been aware of this deadline since 2001 and that unfortunately, the proposal will not be operational until summer 2017 at best. (Original version in French by Emmanuel Hagry)