Nation watching European trade proposal
New method in the works for defining dumping
China is paying close attention to proposed actions within the EU to amend the EU Trade Defense legislation and observing how the EU will meet its WTO obligations, a trade official with the Ministry of Commerce ( MOFCOM) said Thursday.
On Wednesday, the European Commission ( EC), in a communication to the European Parliament and the European Council, called upon EU member states to support its efforts to provide the EU with more robust trade defense instruments.
The EC said the necessary modernization of trade defense instruments can be achieved through the swift adoption of its proposal that was tabled in 2013. That document notably proposed an end to the lesser duty rule, which caps the level of duties that can be imposed.
The EC also said that it will propose, by the end of the year, a new method for calculating dumping on imports from countries where there are market distortions, or where the state has a pervasive influence on the economy.
Distortions are identified via criteria such as state policies and influence, and the presence of State- owned enterprises ( SOEs).
“The new measures have no basis in WTO rules and could easily become “instruments of trade protectionism,” an unidentified senior official with the MOFCOM was quoted as saying in a statement posted on the MOFCOM’s website Thursday.
China believes a country’s economic development and economic management model stem from its national conditions, developmental stage and cultural traditions, and no standards determining market distortions should be set up beyond the WTO rules, noted the official.
Taking anti- dumping measures based on such standards is even worse, the official said.
The official reiterated that under Article 15 of the Protocol on the Accession of the People’s Republic of China, WTO members should terminate the use of the “substitute country” method in anti- dumping investigations against China. The provision on the use of the “substitute country” method will expire this December 11 this year.
Bai Ming, a trade expert at the Chinese academy, said that the move means the EC is exploring ways that will enable the EU to continue taking trade protectionist measures against China after December 11.
“The linkage to SOEs reflects measures more stringent than what is currently imposed, and this is against the WTO spirit of applying the lesser duty rule to boost free trade,” Bai noted.
“Previously, there were only prices and cost factors. Now the matter will be more complicated,” he told the Global Times Thursday.
Mei Xinyu, a global trade expert with the MOFCOM, told the Global Times on Thursday that the move reflects the EC’s unwillingness to fulfill the EU’s WTO obligations by trying to establish new procedures and definitions, which are groundless according to WTO rules.
“A truly promising country is one that is self- strengthening, and not one seeks to break its commitments at every turn,” he said, noting that such a move foretells Europe’s bleak economic future.