Appellate Body Report on EU-Biodiesel: Further Thoughts on The Issue of 'Particular Market Situation'

Abstract

China’s unique economic system poses increasing challenges to the world trading system and attracts growing academic and policy debates. WTO members have frequently resorted to antidumping measures in dealing with price distortions caused by Chinese government influence in the economy. The Appellate Body’s decision in the recent EU – Biodiesel dispute starts to remove the flexibility of condemning state intervention and price distortions under the WTO Anti-Dumping Agreement through antidumping measures. This decision, read with the relevant WTO jurisprudence on the “ordinary course of trade” test and subsidies, suggests that price distortions resulting from state intervention should be addressed under other WTO rules. Therefore, it is necessary for WTO members to shift their focus to, and explore the capacity of, the other rules to overcome the challenges arising from China’s state capitalism.