Don’t misread “market economy status”

Currently, there is a saying circulating in China:2016After the year, China will automatically obtain market economy status, based on the "China AccessionWTOProtocol" has relevant provisions. The author believes that there are several misunderstandings in the above views that need to be clarified.

First of all, "market economy status" is a term specific to the w88 field. The term originates from the domestic laws of Western countries. The chapters on anti-dumping and countervailing duties in the foreign w88 laws of these countries define what “non-market economy countries” are, define some criteria for how to identify market economy countries, and stipulate special investigation methods for products from non-market economy countries. Therefore, in the domestic legal systems of other countries and regions such as the United States and the European Union, "market economy status" is not a general concept, but can only be used in the field of w88 remedies (anti-dumping and countervailing). Similarly, at the level of international treaties, Article of the Protocol of Accession15Article itself only targets anti-dumping and countervailing w88 remedies. It can be seen that "market economy status" is a legal technical concept with a very specific scope of application and is not an economic system concept understood by the public.

Secondly, Western countries may not be in the country2016Automatically recognize China’s “market economy status” after the year. According to China's AccessionWTOProtocol》No.15Article 10738_10771|WTOThe domestic law of the importing member confirms that a specific industry or sector has market economy conditions, then Article15items (a) item (which allows the continued use of the surrogate country method to calculate domestic prices for China) may be in2016year12month10Terminates application to China or specific industrial sectors before the date of 11001_11095|, thereby obtaining "overall" or "partial" market economy status. However, judging from the domestic legal rules and practices of the United States and the European Union, it is not possible to obtain overall market economy status, and only in a very small number of investigations can it successfully obtain "partial" market economy status. "15Year applicable period terms”[No.15Bar(d) item]Clear(a) The term terminates in the range "(a) item(ii)", but it is not clearly specified2016year12month10After the day (a) item preface and (i) shall be terminated. In other words, there is still the possibility that the above provisions will continue to apply. So, join in ChinaWTO15Anniversary, that is2016year12month10In the future, as long as the domestic laws of the United States and the European Union are not modified, the issue of whether to grant market economy status will still be subject to the administrative decision of the relevant domestic departments, rather than being automatically obtained as soon as the time comes.

There are still variables in the US and European anti-dumping methods against China

2016In 2020, what methods will the United States, the European Union and other members use to calculate the normal value of Chinese products in their anti-dumping investigations against China? Theoretically, there are at least the following two possibilities:

First, the surrogate country method continues to apply. Although "China's accessionWTOProtocol No.15Articles(a) item(ii) shall cease to apply, except that the General Agreement on Tariffs and w88 (GATT）No.613643_136872Article7Model. Theoretically, since the Anti-dumping Agreement applies to anti-dumping investigations against China, Article2Article713824_138942Article7, it is also difficult for them to prove that China’s current system meets the above applicable conditions. Therefore, the United States and the EU, in accordance with Article of the Anti-dumping Agreement2Article7It is unlikely that the surrogate country price will continue to apply to China.

Second, refuse to apply China's domestic sales price as the normal value, and use the export price or structural price to a third country. In the anti-dumping investigation, the dumping margin is calculated by comparing the export price and the normal value. In their anti-dumping investigations against China, the United States and the European Union may determine that China has "special circumstances in the domestic market" on the grounds that China fails to meet market economy conditions or that China is a "non-market economy country" itself. Therefore, they refuse to apply China's domestic sales prices as normal values and instead adopt export prices or structural prices to third countries. Although the above method has a much smaller adverse impact on China than the original substitute country price, it still cannot be ignored, and the applicable structural price is particularly unfavorable to China. If the structural price method is used, the relevant price elements do not actually exist, but are calculated by the investigating officials. The importing country's investigation agency still has a large discretionary space to increase the dumping margin of Chinese products.

Can the surrogate country practice finally be discontinued?

Study "China's AccessionWTOProtocol》No.15regulations, the following conclusions can be drawn:

First, join in ChinaWTOFrom date15years from now2016year12month1016558_166082016Years later, China automatically obtained market economy status in the anti-dumping investigation of the importing country.2016After 16696_16755|, the United States and the European Union can still decide according to their own standards whether to recognize China's full market economy status as a whole or to grant individual market economy status to specific industries in China.

Second, it cannot be understood as2016After 2020, anti-dumping measures against China will be calculated based on China’s domestic prices. Although the surrogate country method is no longer applicable, the United States and the European Union may still use other methods to refuse to apply China's domestic sales price as the normal value, and use the export price or structural price to a third country to calculate a larger dumping margin.

Of course, the most extreme case (although unlikely) is,2016year12month10The United States and the European Union will continue to maintain the surrogate country approach in anti-dumping investigations against China in the future. For this, we can passWTOSue the United States and Europe to protect their rights. Because No.15Article 18002_18021|Article clearly stipulates that the United States and Europe’s anti-dumping measures against China have been maintained for nearly a year40The surrogate country practice of 1999 can finally be put to rest.

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