US move threatens free trade

The legal brief the United States filed with the World Trade Organization on Thursday to oppose the designation of China as a market economy risks derailing Sino-US economic relations and reflects Washington’s unwillingness to respect free trade and globalization. The US’ move, as a third party in a case China has brought against the European Union, will help it impose anti-dumping duties on imported Chinese products, which could cause losses worth billions of dollars to Chinese enterprises.

On Tuesday, the US Department of Commerce initiated antidumping and anti-subsidy duty investigations into Chinese aluminum products without requests by US companies, which is rare.

Not happy with only raising the barriers to free trade, the US has now initiated a move to deny China market economy status so that it can continue using the surrogate country approach to evaluate the costs of imported Chinese products. As production cost is often much higher in a third country than in China, the US, when deciding the price of Chinese products in anti-dumping cases, will find it technically much easier to accuse China of dumping in the US market.

However, according to Article 15 of the Protocol on China’s Accession to the WTO, which all WTO members including the US agreed, WTO members should have stopped using the surrogate country approach to investigate anti-dumping cases against China by Dec 11, 2016.

Perhaps the US is violating its own pledge in order to solve some of its economic problems, especially its colossal trade deficits. But it cannot do so by targeting Chinese products, because goods from other countries with low production costs will replace them.

Worse, the US move could jeopardize bilateral trade ties. Sino-US economic relations have progressed relatively well in recent years. The two sides have also established various economic dialogue mechanisms to bridge their differences, and exports of some US products, such as beef, to China have increased thanks to the traderebalancing 100-day action plan.

But if the US continues using its one-sided trade policies, it could derail the result-oriented bilateral economic relationship, which will serve neither side’s interest.