DetailsChinese Premier Li Keqiang had an official visit to the European countries and had a meeting with German Chancellor Angela Merkel. Merkel said that the European Union will fulfill its obligation under Article 15 of the Protocol on China's Accession to the World Trade Organization (¡°Protocol¡±).
China has been the country where most anti-dumping investigation occurred during the past decade years. The Article 15 of the Protocol seems to be one of the chief culprits. From 2001 to 2016, China¡¯s trade partners have used ¡°surrogate prices¡± in the business transaction. This means those trade partners were comparing the prices of Chinese exports to higher prices in third countries, rather than the actual prices in China; and Chinese exports were also believed being sold in a lower price to other countries than they were sold in China.
However, according to Article 15 (d) of the Protocol, 15 years after the date of China¡¯s accession to the WTO, importing WTO members cannot use the surrogate prices in the international business and trade with China. The year of 2016 was the 15 years since it became a member of WTO, and China should obtain the market economy status. That means the importing WTO members, as China¡¯s trade partners, shall accept the prices reported by China¡¯s exporters.
"China is firmly against any misinterpretation or delay in performance of the clause. We call on members, such as the US and EU, to take necessary measures as soon as possible in order to ensure ending the use of ¡®third countries¡¯ before the due time,¡± China¡¯s Ministry of Commerce said in response to questions from the Financial Times.
Market economy status would benefit Chinese enterprises and promote the development in not only Chinese economy but also international economy and trade. Whatsoever, when Chinese enterprises are exporting goods, they shall always pay attention to the basic information of the partner and the regulations and laws in the destined country in order to control the trade risks.
Attached:
PROTOCOL ON THE ACCESSION OF THE PEOPLE'S REPUBLIC OF CHINA
15. Price Comparability in Determining Subsidies and Dumping
Article VI of the GATT 1994, the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 ("Anti-Dumping Agreement") and the SCM Agreement shall apply in proceedings involving imports of Chinese origin into a WTO Member consistent with thefollowing:
(a) In determining price comparability under Article VI of the GATT 1994 and the Anti-Dumping Agreement, the importing WTO Member shall use either Chinese prices or costs for the industry under investigation or a methodology that is not based on a strict comparison with domestic prices or costs in China based on the following rules:
(i) If the producers under investigation can clearly show that market economy conditions prevail in the industry producing the like product with regard to the manufacture, production and sale of that product, the importing WTO Member shall use Chinese prices or costs for the industry under investigation in determining price comparability;
(ii) The importing WTO Member may use a methodology that is not based on a strict comparison with domestic prices or costs in China if the producers under investigation cannot clearly show that market economy conditions prevail in the industry producing the like product with regard to manufacture, production and sale of that product.
(b) In proceedings under Parts II, III and V of the SCM Agreement, when addressing subsidies described in Articles 14(a), 14(b), 14(c) and 14(d), relevant provisions of the SCM Agreement shall apply; however, if there are special difficulties in that application, the importing WTO Member may then use methodologies for identifying and measuring the subsidy benefit which take into account the possibility that prevailing terms and conditions in China may not always be available as appropriate benchmarks. In applying such methodologies, where practicable, the importing WTO Member should adjust such prevailing terms and conditions before considering the use of terms and conditions prevailing outside China.
(c) The importing WTO Member shall notify methodologies used in accordance with subparagraph (a) to the Committee on Anti-Dumping Practices and shall notify methodologies used in accordance with subparagraph (b) to the Committee on Subsidies and Countervailing Measures.
(d) Once China has established, under the national law of the importing WTO Member,that it is a market economy, the provisions of subparagraph (a) shall be terminated provided that the importing Member's national law contains market economy criteria as of the date of accession. In any event, the provisions of subparagraph (a)(ii) shall expire 15 years after the date of accession. In addition, should China establish, pursuant to the national law of the importing WTO Member, that market economy conditions prevail in a particular industry or sector, the non-market economy provisions of subparagraph (a) shall no longer apply to that industry or sector.