On Friday 10 March, China requested the WTO set up a dispute settlement body (DSB) after the failure of it consultations with the EU at the end of January. The country would like the DSB to arbitrate in its complaint on the EU's current anti-dumping methodology (DS 516).
The very day after the expiry, on 11 December 2016, 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 to the WTO about the so-called substitute country method, used by the US and EU to calculate the anti-dumping duties to apply to Chinese exports (see EUROPE 11687).
When it joined the WTO in 2001, China agreed that it would not be considered as a market economy by the other member countries 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-dumping duties on the grounds that the prices practised in China did not reflect the reality of the market.
China's request for a DSB to be set up will be assessed at the next DSB meeting on 21 March. Under WTO rules, the EU will then be able to block China's request but will not be able to oppose the country's second request for a DSB to be set up.
On the EU side, the European Commission proposed a new methodology in November 2016 for the anti-dumping calculation to settle the issue of how to treat China in the EU's anti-dumping investigations when the arrangements on this expired in China's WTO accession protocol (see EUROPE 11664).
Aegis Europe condemns China's divide and conquer strategy. Defending the interests of around 30 EU manufacturing associations, Aegis Europe condemned
China's "divide and conquer" strategy on Monday 13 March, saying that China has requested a DSB to be set up only against the EU's anti-dumping methodology and not against that of the US, in contrast with what China had announced in December 2016.
"China now appears to be focusing on what it considers to be the weaker of the two parties, the EU. Hoping that the EU is not planning a robust defence [at the WTO] in Geneva, but already started changing its anti-dumping law, China is separating the EU from the US in the hope of paving the way for further challenges if successful in the EU case and improving its chances of winning against both Europe and the US at the WTO", Aegis Europe states.
"The EU must stand firm, aligning itself with the US and other major trading partners, or risk rendering its anti-dumping instrument entirely ineffective against non-market economies like China", Aegis Europe concludes. (Original version in French by Emmanuel Hagry)