WTO dispute resolution case launched over surrogate country approach
December 19, 2016 Category Foreign trade, Weekly
China has launched a dispute resolution case at the World Trade Organization (WTO) over the surrogate country approach used by the United States and European Union to calculate anti-dumping measures against Chinese exports. When China joined the WTO in 2001, it agreed to let WTO members treat it as a non-market economy when assessing dumping duties for 15 years. That gave trade partners the advantage of using a third country’s prices to gauge whether China was selling its goods below market value. But that clause expired on December 11, and China has demanded that countries abide by the agreement. U.S. Commerce Secretary Penny Pritzker said in November the time was “not ripe” for the United States to change the way it evaluates whether China has achieved market economy status, and there was no international trade rules requiring changes in the way U.S. anti-dumping duties are calculated. China’s Commerce Ministry said in a statement that 15 years on, all WTO members had an obligation to stop using the surrogate country approach. “Regretfully, the United States and European Union have yet to fulfil this obligation,” the Ministry said.
Separately, a Ministry official said in another statement that a U.S. investigation into what it regards as Chinese dumping of plywood products launched last week amounted to abuse of emergency trade relief measures, the Shanghai Daily reports. After 60 days, if the consultations, which are usually held in Geneva, fail to resolve the dispute, the complainant may request adjudication by a panel selected by the WTO. The defendant party has the right to challenge the panel’s ruling within a year. Under such circumstances, a final adjudication will be made by a WTO committee within 90 days. The WTO will give 15 months to the defendant to carry out the final order. If the defendant does not follow the final decision within this period, the complainant party could apply trade retaliation measures. China imported USD1.88 trillion of goods from the EU between January and November this year.
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