China’s market economy dilemma and its interplay with EU anti-dumping law

Abstract

ABSTRACTOn 10 July 2017, a World Trade Organization (WTO) panel was composed to hear the dispute between China and the European Union (EU) regarding some of the EU’s regulations on the calculation of dumping margin against Chinese imports. Although the United States (US) has also been at the forefront of invoking particular market situation (PMS) in relation to dumping investigation against imports from China, this article focuses on China-EU relations vis-à-vis WTO anti-dumping law. It argues that although Paragraph 15(d) of the Accession Protocol expired in December 2016, the substantive content of the concept of Non-Market Economy (NME) in the calculation of dumping margin in the EU has not disappeared. This article further examines Paragraph 15 of the Accession Protocol of China, as well as certain WTO jurisprudence in relevant cases, in order to shed some light on how the issue of China’s market economy status may be resolved going forward. The article argues that due to the expiry of Paragraph 15(a)(ii), the application of third country prices in the calculation of dumping margin does not seem to have legal support from the text of the Accession Protocol or the negotiating history of China’s Accession Protocol. Moreover, the article examines the notion of legislation as such as opposed to mandatory legislation and concludes that the jurisprudential progressivism of the WTO Dispute Settlement Body (DSB) reveals that both types of legislation can be subject to WTO complaint. The article concludes with some remarks on how going forward this contestation can be settled.