10/01/2018
New EU Anti-Dumping Regulation Amendment Violates WTO Rules
Section 15 of China’s Protocol of Accession to the WTO allowed other WTO members to use, when determining price comparability in anti-dumping investigations against China, a “surrogate country” method of calculation instead of a strict comparison with China’s domestic prices or costs. After the expiry of Section 15 on 11 December 2016, all WTO members should cease to apply the “surrogate country” practice. However, the European Union and the United States, as China’s important trading partners as well as leading investigating authorities for anti-dumping cases against China, have failed to fulfill their treaty obligations and instead have continued to apply the surrogate country methodology to the great detriment of a vast number of Chinese industries.
Furthermore, on 12 December 2017, the EU adopted an amendment implementing a new methodology for anti-dumping investigations. This amendment introduced a new concept of “significant market distortion” in order to continue the use of its “surrogate country” approach in anti-dumping investigations against China. It also proposed to apply labor and environmental standards. In addition, on 20 December, 2017, the European Commission published a 465-page country report on China that provided the EU's view on the current situation of China’s socialist market economy. This report might be used as evidence of “significant distortion” in the Chinese market in EU anti-dumping investigations against China.
In response, a spokesman of China’s Ministry of Foreign Affairs said that “the EU made irresponsible remarks about China’s economic development, and imposed discriminatory and unfair restrictions against China but said nothing about its own violation of WTO rules. This application of a double standard is hypocritical. In the current environment where the interests of all countries across the world are increasingly converging, applying a zero-sum game instead of cooperating to achieve mutual benefits and win-win solutions will undoubtedly harm the interests of both the EU and those of others. Recent years witnessed China’s remarkable achievements in economic development and historic changes, which not only provided a sound foundation for China’s reform and development in different areas, but also contributed significantly to the stability and growth of the world economy. Facts have shown that the economic achievements of Chinese socialism have drawn worldwide attention and that China’s prospects are bright.”
A spokesman of China’s Ministry of Commerce in turn said that “there are no concepts of 'significant market distortion' nor social and environmental dumping provisions in WTO Rules. Since the EU’s new anti-dumping methodology is not supported by WTO rules, it adds unpredictability in the application of the regulation and will cause serious damage to the WTO’s anti-dumping legal system. The EU’s new amendment has been met with disbelief by multiple WTO members including China. As a member of the WTO, the EU should respect the international rules. Only by safeguarding the authority of multi-lateral trade systems can the common interests of all countries be served. China urges the EU to strictly abide by WTO rules and fulfill its international obligations in good faith and in a comprehensive manner. China reserves its rights under the WTO dispute settlement mechanism and will take all necessary measures to protect the legitimate rights and interests of Chinese companies. Established and developed by Chinese people, the Chineses socialist market economy system is in line with China’s reality, and meets the needs for economic development in the new era and has also been positively evaluated by many countries in the world. China opposes the EU’s imposition of its own standard for so-called “market distortion" upon other countries and its misleading influence on businesses.”
As China’s largest trade and investment promotion organization, CCPIT firmly supports the positions of the Ministries of Foreign Affairs and Commerce on behalf of China’s business community and considers that the EU’s new measure violates the rules of the WTO. According to CCPIT’s initial analysis, the EU’s country report on China is rife with false statements and baseless accusations.It is foreseeable that the implementation of the EU’s new anti-dumping rules might result in unfair treatment to China’s exporting industries and enterprises in the EU’s Anti-dumping investigations and that trade and economic frictions will become more challenging and difficult.
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