The United States and Japan expressed their support for the EU at the meeting of the dispute settlement body (DSB) after the WTO agreed to China’s request for a panel to be set up to consider its complaint over the way the EU currently calculates anti-dumping duties (see EUROPE 11761).
Immediately after the expiry, on 11 December 2016, of certain provisions of China’s protocol of accession (in 2011) to the WTO, which allowed the other member countries of the organisation to treat China as a non-market economy country in how they calculated anti-dumping duties, China lodged a complaint with the WTO over the so-called “substitute country” method used by the EU in its calculation of anti-dumping duties to be applied to Chinese exports (see EUROPE 11687).
As it had done on 21 March, when it submitted its first request for a panel to be set up (see EUROPE 11745), China stated that the provisions in its accession protocol, which allowed special rules to apply in anti-dumping proceedings on imports from China, had expired after a 15-year transitional period, the WTO says in a note.
China noted the United States’ intention to continue applying “discriminative practices” against its exporters despite the expiry of the above-mentioned provisions. This, it said, was inconsistent with WTO rules.
With regard to the EU, China said that there was “no deficiency” in its request for the establishment of a panel. China considers the EU’s views regarding the inclusion of modifications, replacements or amendments in the Chinese complaint to be “incorrect as a matter of law and fact”.
China agreed that members could use appropriate WTO tools to address injurious dumping according to WTO law. However, it argues that the EU had failed to use WTO-consistent tools in anti-dumping disputes involving China.
The EU said it regretted China’s decision, stating that the measure at issue, Article 2(7) of the EU’s basic anti-dumping regulation was currently the subject of an internal legislative process which could result in its withdrawal (the EU is looking to find a new anti-dumping methodology to resolve the issue of how to treat China in its investigations – see EUROPE 11664).
Deeming China’s request “unnecessary and incapable of being fruitful”, the EU repeated its concerns regarding China’s attempt to “create and maintain an unlawful short-cut” between the current dispute and the unknown outcome of the legislative process to define a new anti-dumping methodology.
The United States said that it supported the EU’s right to use a non-market economy methodology in anti-dumping proceedings involving China, arguing that China’s accession protocol allows members to continue using a non-market economy methodology with respect to China for as long as such treatment was justified by the facts, that is, until the facts showed that China had made the reforms necessary to become a market economy.
Japan said that it supported the positions of the EU and the United States in this dispute and that it shared their concerns. In particular, Japan was of the view that China’s accession protocol continued to allow members to use a methodology not based on a strict comparison with domestic prices or costs in China.
Australia, Brazil, Canada, Colombia, Ecuador, India, Indonesia, Japan, Kazakhstan, Korea, Mexico, Norway, the Russian Federation, Chinese Taipei, Turkey and the United States reserved their third-party rights to participate in the panel proceedings. (Original version in French by Emmanuel Hagry)