The Commerce Department has issued a 205-page memo laying out its case for maintaining China’s non-market economy status for the purpose of antidumping cases just as President Trump prepares to meet Chinese President Xi Jinping next week in Beijing.
[Jack Caporal| October 30, 2017 | Inside US Trade]
China believes the expiration of certain provisions in its World Trade Organization accession protocol obligates members to no longer treat it as a non-market economy in trade remedy cases. But under U.S. law, a country must meet six criteria for the Commerce Department to grant it market economy status. The Commerce Department memo concludes that China does not meet any of the six criteria.
China has filed cases at the WTO against the U.S. and EU over its continued treatment as a non-market economy, although it has not requested the establishment of a panel in its case against the U.S. One source told Inside U.S. Trade the Commerce memo may push China to request that a panel be established.
Sources believe the review of China’s non-market economy status, initiated in conjunction with antidumping and countervailing duty investigations into aluminum foil from China, was in part an effort by the Trump administration to build support for its defense at the WTO.
U.S. Trade Representative Robert Lighthizer has said a U.S. loss to China in the dispute over its non-market economy status would be “cataclysmic for the WTO.” The case, Lighthizer said in June, “is without question the most serious litigation matter we have at the WTO right now.”