China, US on course for continuing trade wrangles

by Zhou Xin/ 16 July, 2016 / SCMP.com

Washington’s open questioning of China status as a market economy, a stance shared by China’s other major trading partner the European Union, is adding a fresh note of disharmony to an annual US$600 billion trade flow between the world’s two largest economies, Chinese researchers say.

China is not demanding immediate market status recognition from the US but it does want the termination of “discriminatory anti-dumping methodology” against Chinese exports. However, Washington’s refusal to recognise China as a market economy could allow the US to keep using substitute countries in assessing the “fair value” of Chinese products in anti-dumping cases, a practice that often leads to higher punitive tariffs on imported Chinese goods.

US trade diplomat Chris Wilson told a World Trade Organisation meeting in Geneva on Thursday that China had not done enough to qualify for market economy status and that other members would not automatically grant it to China, according to Reuters.

Wilson’s remarks come hard on the heels of a formal US complaint against Chinese restrictions on exports as the Obama administration is escalating trade battle against Beijing to echo protectionism debates in domestic presidential election campaign.

“It’s another sign of rising US protectionism,” said Sun Lijian, a professor at Fudan University in Shanghai. “The US is trying to retain an option to use against Chinese imports in future.”

When China joined the World Trade Organisation in 2001, it accepted a clause that, for a 15-year-period after China’s accession, other members would not use China’s published prices, which are often regarded as distorted by state subsidies, in deciding whether China was “dumping” products at artificially low prices. Read more..

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