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March 23, 2017

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China asks WTO to review EU system

CHINA has asked the World Trade Organization to create an expert panel to examine the so-called “surrogate country” approach used by the European Union to calculate anti-dumping measures applied to Chinese exports.

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.

The deadline passed late last year, but the EU has nevertheless opted to preserve tough rules that protect the bloc from cheap Chinese products.

China asked the WTO to establish a panel to rule on its demand that the EU stop 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 European Union to remedy the obvious and egregious WTO-inconsistency of its measures,” China’s representative to the global trade body said on Tuesday.

China said previously that the refusal to grant it market economy status is an example of “covert protectionism” and “double standard” by the West.

The request to the WTO came after China in December filed initial disputes against the EU and the United States over the issue, which 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.

Not surprisingly, the EU opposed the request.

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

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

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


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