MEPs vote against market economy status for China

(STRASBOURG) - EU Parliament members voted against dumping and the granting of market economy status (MES) to China Thursday. This is seen as an important signal that the EU will not grant MES so long as China fails to meet its WTO obligations.

In a non-legislative resolution passed by 546 votes to 28, said that until China fulfils the EU's five criteria for market economy status, its exports to the EU must be treated in a "non-standard" way.

This non-standard methodology, for use in anti-dumping and anti-subsidy investigations, should assess whether China's costs and prices are market-based, so as to ensure a level playing field for EU industry and defend EU jobs, they add.

However, MEPs say the EU must to find a way to do this in compliance with its international obligations in the World Trade Organization (WTO), and in particular China's WTO Accession Protocol, which provides for changes in how China is to be treated after 11 December 2016.

MEPs now call on the European Commission to come forward with a proposal that strikes a balance between these needs.

Chinese impact on EU industry

Industry, trade unions and other stakeholders have been concerned about potential consequences for jobs, the environment and economic growth in the EU. They say China's excess production capacity and the resulting cut-price exports are having strong social, economic and environmental consequences, particularly to the EU steel sector.

In their resolution, MEPs point out that 56 of the EU's current 73 anti-dumping measures apply to imports from China.

Nevertheless, China's importance as the EU's second biggest trading partner is not overlooked. With daily trade flows of over EUR 1 billion, the Chinese market has been the main engine of profitability for a number of EU industries and brands.

MEPs are now asking the Commission to coordinate with other major trading partners to come to a joint interpretation of WTO law. They also urge it to use the upcoming G7 and G20 summits, as well as the EU-China Summit, to find a WTO-compatible response.

Reform EU anti-dumping law

As part of their resolution, MEPs have stressed the "imminent need" for a general reform of EU trade defence instruments, and call on the Council to unblock a package of proposals to modernise them on which Parliament voted its position in 2014.

Further information, European Parliament

Adopted text will be available here (12.05.2016)

EP Research: Granting Market Economy Status to China: WTO law and selected WTO members policy