China’s battle for recognition as a market economy that would help it avoid penalties from key trade partners has been thwarted, as a key clause in Beijing’s deal to join the WTO expires Sunday.As China marks the 15th anniversary of its accession to the WTO, the United States, European Union and Japan are maintaining tough rules that protect them from cheap Chinese products flooding their markets.
Beijing highly covets market economy status, which would make it more difficult for other countries to launch anti-dumping cases against it. Dumping is when a country prices its exports below what it would charge for the same product in its home market.When China joined the WTO on 11 December, 2001 it was written into the terms of the deal that member states could treat it as a non-market economy, allowing them to impose heavy anti-dumping duties on the basis that its low prices did not reflect market reality.
“China will take steps to defend its rights if (WTO) members continue this old practice of anti-dumping regulation against Chinese products after the expiration date” of the accession agreement clause, China’s commerce ministry spokesman Shen Danyang was quoted as saying by state media on Friday.
International trade experts say China will have to start a lengthy legal battle at the WTO against its trade partners in order to get recognition of its new status.
In a vitriolic commentary, the official Xinhua news agency said that “China would automatically move to market economy status” on 11 December.
“The refusal is nothing short of covert protectionism, which runs against the trend of globalization and poisons the recovery of the global economy,” it said Friday, denouncing “another double-standard applied by the West against China”.
Japan also said it would not recognise its neighbour as a market economy.For as long as the global trade watchdog does not deliver a final verdict on the disputed clause, “the EU and other WTO members can continue to treat China as the non-market economy it is”, said Milan Nitzschke, spokesman for Aegis Europe, an industry alliance which represents some 30 European industries.