GENEVA: China on Tuesday 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 it from cheap Chinese products flooding its markets.
China on Tuesday 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 Tuesday.
Beijing has said previously that the refusal to grant China market economy status is an example of “covert protectionism” and “double standard” by the West.
The request to the WTO came after China last 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 Tuesday, the EU representative pointed out that the bloc was currently debating whether or not to change its categorisation of China, and voiced regret over Beijing’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 European Union,” it continued, adding: “This should be a matter of grave concern to all members.”
AEGIS Europe, an alliance of nearly 30 European manufacturing associations, also slammed Tuesday’s move, urging the EU to stand up to China’s “divide and conquer” strategy.
“China’s trade strategy is simply astounding, it is like Lance Armstrong suing the Tour de France to reinstate his medals, even though he is a proven doping cheat,” AEGIS spokesman Milan Nitzschke said in a statement.
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 usually take several months to render their decisions.
They can authorise retaliatory trade measures if they rule in favour of a plaintiff.
The WTO polices global trade accords in an effort to ensure a level playing field for its 164 member economies.