The United States warned China on Thursday that it had not done enough to qualify for market economy status, especially in steel and aluminium, sowing the seeds for a trade battle between Washington and Beijing at the end of 2016.
Upon China’s admission to the WTO in 2001, it was told by other members that they would not use its published, state-controlled prices to judge whether or not it was “dumping” exports unfairly in their markets, but rather “surrogate” prices reflecting what it should be charging without state subsidies.
That was written into its WTO membership agreement in a clause that would expire after 15 years, on December 11, 2016.
If the US, European Union, and other WTO members begin to take Chinese export prices at face value, it will be much harder for them to challenge China’s cheap exports.
US trade diplomat Chris Wilson told the WTO meeting that the expiry of the clause did not require other WTO members to automatically grant China market economy status on December 11.
Instead, China must establish under each WTO member country’s domestic law that it is a market economy, he said, according to an outline of his remarks seen by Reuters.