Monday

18th Dec 2017

EU to tweak rules on Chinese 'dumping'

  • Beijing. The EU Commission will come out with the official proposals on the new dumping rules later this year (Photo: Bernd Thaller)

The European Commission has tried to fudge the issue of whether China is a “market economy” amid efforts to protect European industry from cheap exports.

Beijing says that under World Trade Organisation (WTO) rules the EU must grant the market economy status (MES) from December onward - 15 years after China joined the trade club.

Thank you for reading EUobserver!

Subscribe now for a 30 day free trial.

  1. €150 per year
  2. or €15 per month
  3. Cancel anytime

EUobserver is an independent, not-for-profit news organization that publishes daily news reports, analysis, and investigations from Brussels and the EU member states. We are an indispensable news source for anyone who wants to know what is going on in the EU.

We are mainly funded by advertising and subscription revenues. As advertising revenues are falling fast, we depend on subscription revenues to support our journalism.

For group, corporate or student subscriptions, please contact us. See also our full Terms of Use.

If you already have an account click here to login.

That risks causing an outcry in EU capitals and in industry, especially the steel sector, because the step would make it much harder for the EU to impose tariffs on state-subsidised Chinese goods.

The college of commissioners held an orientation debate on the issue on Wednesday (20 July).

But instead of taking a position either way, it proposed a third solution - to change the way it calculated whether products were being dumped on the EU market at artificially low prices.

“We should forget this phrase [market economy status]”, commission vice-president Jyrki Katainen said at a press conference in Brussels on Wednesday.

He said the EU would “fulfil our [WTO] legal obligation”, without going into further detail.

But he added that “we should change the way we calculate subsidy or dumping cases, so that we don’t become more vulnerable than we are at the moment”.

He said that would entail changing “the calculation method on dumping and subsidy issues".

In current alleged dumping cases, EU investigators compare Chinese export prices to those of other countries, rather than to domestic prices in China.

That would be illegal if the EU grants China the coveted MES.

Under the EU’s proposed new model, dumping investigations would take into account prevailing international prices, and distortions caused by state interventions.

Trade commissioner Cecilia Malmstroem told press this would mean that: “We are not singling out China. This could go for any country. What we are looking for is whether there are any distortions in a country or even in a sector”.

She added that no matter what the WTO deadlines might say, "China is not a market economy … If it were a market economy, it wouldn't have the problems we are seeing”.

Katainen said the commission’s new approach would result in similar duties to those in place today.

Guy Thiran, director general of Eurometaux, an organisation representing the European non-ferrous metals industry, which had been critical of the commission's approach, said Wednesday that it was too early to tell if the new proposal will lead to effective protection.

Focus

Leaders shy away from China market status debate

Leaders are sitting down for the EU-China summit, but the crucial issue of China's market economy status will not be discussed officially. It still dominates industry's thinking on the relationship.

MEPs: China is not a market economy

China should not be granted market economy status, say MEPs. The EU Commission says it is trying to find a solution to defend EU industry.

EUobserved

The EU and China's velvet power

China is pushing its influence through the New Silk Road project and wooing of world media.

News in Brief

  1. EU-UK Brexit trade deal by January 2021, official says
  2. Bitcoin is 'deadly', Danish central bank warns
  3. EU Commission wants to ban 'legal weed'
  4. France files €10m complaint against Amazon
  5. EU negotiators reach deal on 'circular economy'
  6. Poll: Tight race in Catalonia days before elections
  7. EU: Israel built 8,000 settler homes in six months
  8. China agrees to promote London as centre for yuan

Stakeholders' Highlights

  1. Counter BalanceA New Study Challenges the Infrastructure Mega Corridors Agenda
  2. Dialogue PlatformThe Gülen Community: Who to Believe - Politicians or Actions?" by Thomas Michel
  3. Plastics Recyclers Europe65% plastics recycling rate attainable by 2025 new study shows
  4. European Heart NetworkCommissioner Andriukaitis' Address to EHN on the Occasion of Its 25th Anniversary
  5. ACCACFOs Risk Losing Relevance If They Do Not Embrace Technology
  6. UNICEFMake the Digital World Safer for Children & Increase Access for the Most Disadvantaged
  7. European Jewish CongressWelcomes Recognition of Jerusalem as the Capital of Israel and Calls on EU States to Follow Suit
  8. Mission of China to the EUChina and EU Boost Innovation Cooperation Under Horizon 2020
  9. European Gaming & Betting AssociationJuncker’s "Political" Commission Leaves Gambling Reforms to the Court
  10. AJC Transatlantic InstituteAJC Applauds U.S. Recognition of Jerusalem as Israel’s Capital City
  11. EU2017EEEU Telecom Ministers Reached an Agreement on the 5G Roadmap
  12. European Friends of ArmeniaEU-Armenia Relations in the CEPA Era: What's Next?