The Dispute Settlement Body (DSB) of the World Trade Organization (WTO) followed up on a Chinese request on Friday 14 June to suspend its work on the dispute with the European Union and its previous anti-dumping calculation method. This decision sounds, however, like a partial victory for the European Union.
At the end of 2016, following the expiry of the provisions of its accession protocol allowing its partners to treat China as a non-market economy in their anti-dumping calculation methods, Beijing brought an action before the WTO (DS516) against the so-called “analogue country” method used by the Union and the United States (see EUROPE 11687/10). This allowed them to calculate anti-dumping duties to be applied to Chinese exports based on a comparison with prices in an analogue non-Member State.
In order to resolve this Chinese issue, a year ago the EU adopted a new methodology to distinguish between market and non-market economies (see EUROPE 12036/15). This methodology, based on Commission investigations, aims to demonstrate, on a case-by-case basis, significant market distortions in order to apply duties to all undervalued products.
The EU deprived of a victory?
This withdrawal may sound like a victory to the EU, but this is not the case.
Following an initial Chinese request, the EU had indeed called on the DSB to take into account certain considerations before granting the Chinese request.
“As can be read from the public notification by the panel, the EU did not agree with China's request to suspend the case, where we were awaiting the final report”, confirmed a Commission source to EUROPE. “But we respect the decision of the panel, as well as the confidentiality of the interim report”, the source said.
While the latter's conclusions were not made public, it was said in Geneva that they would have been largely favourable to the EU, even validating some elements of its new “case-by-case” methodology, in particular by not automatically granting China market economy status.
This Chinese withdrawal therefore allows Beijing to save face, perhaps depriving the EU of a victory, or a demonstration of the conformity of its new methodology.
A similar dispute between Beijing and Washington has not yet been resolved.
Read the notification (EN): https://bit.ly/2WOtJNZ (Original version in French by Hermine Donceel)