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HLIGHT South China Business Journal
Trade Facts
In accordance with U.S.- China WTO agreement U.S. must treat China as a Market Economy
after December 2016. therefore this month’s Hightlight will focus on the trade facts involving
U.S. and China. The four articles in this section are indended to demonstrate relevance of various
trade issues to a Market Economy.
‘IMs Carhkineta Ea conomy?’
The key to the current discussion is in what comes next. Many have argued over whether China
meets the criteria under U.S. law to be treated as a market economy. A closer reading of China’s
WTO accession protocol reveals that this question is irrelevant. The language in the protocol does
not require the U.S. to name China as a market economy in December; it simply requires ending
the use of the NME methodology – an important distinction that suggests a path forward.
It doesn’t matter.
By John Frisbie& Erin Ennis
BASED ON THE headlines in the press recently, you might economy (NME) calculations, in China cases—for a period of 15
get the idea that the United States faces an influx of mas- years. As a result, the U.S. could use a formula to determine the
sive amounts of Chinese steel at the end of this year, thanks to value of anti-dumping tariffs to apply to Chinese goods sold at
an obscure provision in China’s WTO accession protocol about unfairly low prices. That provision is set to expire Dec. 11, 2016.
market economy status.
Despite the current rhetoric, that much of the situation is indis-
The widely cited but poorly understood provision will not leave putable. Three successive U.S. administrations — all that have
us defenseless to steel or any other products flooding the U.S. served during and since China joined the WTO — have stated
market. But mishandling this important issue could damage our over and over again in public and in official documents that the
credibility and impact U.S.-China relations for years to come. ability to use NME calculations ends after 15 years. As late as
Fortunately, there is a way out – and the question of whether 2012, the Obama Administration explained the provision in its
China is a “market economy” has nothing to do with it. annual report to Congress on China’s WTO compliance,
When China joined the World Trade Organization (WTO) in “China’s accession agreement also includes provisions establish-
2001, its government’s pervasive intervention in the economy ing several mechanisms… designed to prevent or remedy injury
meant that China’s trading partners could not trust data on the that U.S. or other WTO members’ industries and workers might
true cost of production and determine a fair market value in experience based on import surges or unfair trade practices.
anti-dumping cases. A provision in China’s accession agreement These mechanisms include…the authority for WTO members
resolved this issue by allowing other WTO member countries to whose national laws contain market economy criteria as of the
use special tariff calculations, known in the U.S. as non-market date of China’s WTO accession to utilize a special non-market
10
Trade Facts
In accordance with U.S.- China WTO agreement U.S. must treat China as a Market Economy
after December 2016. therefore this month’s Hightlight will focus on the trade facts involving
U.S. and China. The four articles in this section are indended to demonstrate relevance of various
trade issues to a Market Economy.
‘IMs Carhkineta Ea conomy?’
The key to the current discussion is in what comes next. Many have argued over whether China
meets the criteria under U.S. law to be treated as a market economy. A closer reading of China’s
WTO accession protocol reveals that this question is irrelevant. The language in the protocol does
not require the U.S. to name China as a market economy in December; it simply requires ending
the use of the NME methodology – an important distinction that suggests a path forward.
It doesn’t matter.
By John Frisbie& Erin Ennis
BASED ON THE headlines in the press recently, you might economy (NME) calculations, in China cases—for a period of 15
get the idea that the United States faces an influx of mas- years. As a result, the U.S. could use a formula to determine the
sive amounts of Chinese steel at the end of this year, thanks to value of anti-dumping tariffs to apply to Chinese goods sold at
an obscure provision in China’s WTO accession protocol about unfairly low prices. That provision is set to expire Dec. 11, 2016.
market economy status.
Despite the current rhetoric, that much of the situation is indis-
The widely cited but poorly understood provision will not leave putable. Three successive U.S. administrations — all that have
us defenseless to steel or any other products flooding the U.S. served during and since China joined the WTO — have stated
market. But mishandling this important issue could damage our over and over again in public and in official documents that the
credibility and impact U.S.-China relations for years to come. ability to use NME calculations ends after 15 years. As late as
Fortunately, there is a way out – and the question of whether 2012, the Obama Administration explained the provision in its
China is a “market economy” has nothing to do with it. annual report to Congress on China’s WTO compliance,
When China joined the World Trade Organization (WTO) in “China’s accession agreement also includes provisions establish-
2001, its government’s pervasive intervention in the economy ing several mechanisms… designed to prevent or remedy injury
meant that China’s trading partners could not trust data on the that U.S. or other WTO members’ industries and workers might
true cost of production and determine a fair market value in experience based on import surges or unfair trade practices.
anti-dumping cases. A provision in China’s accession agreement These mechanisms include…the authority for WTO members
resolved this issue by allowing other WTO member countries to whose national laws contain market economy criteria as of the
use special tariff calculations, known in the U.S. as non-market date of China’s WTO accession to utilize a special non-market
10
