China suspended its market economy status challenge at WTO

This month, the World Trade Organization (WTO) approved China’s request submitted in May to suspend its complaint in a dispute raised with the EU over how import prices of Chinese products were determined in dumping cases. In practice, the complaint was intended to force the WTO to determine whether China meets the criteria for recognition as a market economy.

China asserts that its 2001 WTO accession agreement automatically conferred market-economy status after 15 years of WTO membership. Such status affects how and whether anti-dumping tariffs can be imposed on Chinese products. The dispute has been pending at the WTO since 2016.

The EU and the US dispute the Chinese interpretation. They say that the low pricing of many Chinese products continues to be based on large public subsidies, so the EU and US have used pricing in third countries with efficient markets to reveal evidence of price dumping in Chinese products. This evidence has been used by the EU and US to impose anti-dumping tariffs on Chinese products, and thereby supported the price competitiveness of their own companies.

A number of different sources report that China has requested that petition be withdrawn after it became apparent that the WTO was ready to issue a negative ruling. China’s similar claim against the US is also expected to be dropped.