Brussels, 4 April 2017 - The People's Republic of China is attacking the European Union at the World Trade Organization (WTO) with regards to the EU’s anti-dumping law. China wants the EU to restrict anti-dumping measures to situations where prices for Chinese products in Europe fall below domestic prices in China, ignoring the state-sponsored distortions of prices in China.
At a meeting on 3 April, the WTO Dispute Settlement Body decided to proceed with an arbitration procedure. China's request includes not only the current EU law, but also seeks a ruling on the draft amendment to the anti-dumping rules, which the EU Commission had proposed in November 2016 in order to address China's concerns.
“China is not only attacking European anti-dumping law, but is also engaged in ongoing legal proceedings. This is highly antagonistic behaviour, which the EU must resist,” insisted Milan Nitzschke, spokesperson for industry alliance AEGIS Europe, whichrepresents about 30 European associations.
The EU's representatives in Geneva have strongly protested against China’s action. However, according to AEGIS Europe, this protest might not be sufficient.
“Beijing has not been treating Europe sufficiently seriously for quite some time”, pointed out Mr Nitzschke. “While China's President Xi gives speeches promoting free trade, the barriers in China grow ever higher. China is acting in a protectionist – almost mercantilist – manner. The country is now trying to obtain the right to unrestrained dumping in Europe. The EU must align quickly with other WTO members such as Canada, Japan and the US to defend the use of effective instruments against unfair and job-destroying Chinese dumping”, he added.
The US government plays a special role there: it has already communicated its view that China's interpretation of its WTO Accession Protocol is simply wrong.
“On China’s accession, members had agreed that Chinese prices and costs could be rejected, and non-market methodology used, so long as China remained a non-market economy,” the US said on 21 March.
At the meeting on 3 April, the US added that, “China’s apparent view that neither the facts in China nor the remaining provisions of the Protocol have any relevance is not only implausible, but is contrary to the text of the Protocol and the rights of other Members under the WTO Agreement.”
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Background information for Editors
China's Protocol of Accession to the WTO provides that, as long as China has not demonstrated that it is a market economy, other WTO Members are not required to use Chinese prices as a benchmark for addressing dumping on export markets. Accordingly, Europe, the US and other WTO Members are calculating a reference value on the basis of international prices. If Chinese prices abroad are below this value, this is recognised as illegitimate dumping and tempered by tariffs or equivalent measures. In order to get rid of these tariffs, China insists on a revision of national rules to treat it the same as other WTO Members as of 12 December 2016. From the perspective of the governments of e.g. the U.S. and Japan, the change that took place on 11 December 2016 does not have such an effect, whereas the European Commission has already put forward a proposed amendment to the law in November 2016, an amendment which would give Chinese exporters a more favourable position under EU law. The manufacturing industry, as well as European trade unions, fear that this could lead to a de facto market economy status for China in the EU and thus to a carte blanche for dumping. China has now also included the Commission proposal in the WTO panel procedure against the EU, which means that, if China’s request is accepted, the entire EU legislative process can be ruled on in the arbitration proceeding in Geneva. Thus, if the change of the EU regulation were decided in Brussels before the outcome of the proceedings in Geneva, the following panel decision could also affect the changed EU-legislation.