EU opposes China WTO request

Dispute centers on ‘ surrogate country’ system

The EU on Tuesday opposed the request of China, which previously asked the WTO to create an expert panel to examine the “surrogate country” approach used by the block to calculate anti- dumping measures applied to Chinese exports.

China on Tuesday asked the WTO to establish a panel to rule on its demand that the EU stops using a “surrogate country” system – judging the price of Chinese goods against a third country’s – to determine whether China is selling its products below market prices.

“China is disappointed that it needs to seek action by the DSB [ the WTO’s Dispute Settlement Body] in order for the EU to remedy the obvious and egregious WTO- inconsistency of its measures,” according to a statement China sent to the global trade body Tuesday.

When China joined the WTO in 2001, it was written into the terms of the deal that member states could treat it as a non- market economy for 15 years, reports said.

The deadline passed late last year, but the EU nevertheless opted to preserve tough rules that protect it from cheap Chinese products flooding into its markets.

The request to the WTO came after China filed initial disputes against the EU and the US in December over the issue. The cases are being handled separately in the WTO system.

After the parties failed to reach an agreement during WTO- led consultations, the door was left open for China to ask the WTO to create a panel of experts to review the case. But the EU opposed the request.

In a statement to the DSB Tuesday, the EU pointed out that the bloc was currently debating whether or not to change its categorization of China, and voiced regret over the country’s decision to push ahead and demand a panel.

“We think it is inappropriate use of the already strained resources of the WTO dispute settlement system,” the representative said.

“China’s request is... manifestly premature and incapable as a matter of principle of being fruitful,” the statement said. The EU “can only conclude that China’s objective is, in fact, to attempt to interfere in the internal legislative process of the EU,” it said, adding “this should be a matter of grave concern to all members.”

The EU’s opposition deters the panel’s creation for now, but under WTO rules, if China makes a second request, it will automatically go through.

The WTO’s panels of independent trade and legal experts usually take several months to render their decisions. They can authorize retaliatory trade measures if they rule in favor of a plaintiff.

The WTO governs global trade in an effort to ensure a level playing field for its 164 member economies.