The European Commission said on Wednesday it will consider abolishing a discriminatory list of "non-market economies" which includes China and set up a "country-neutral" method for future anti-dumping and anti-subsidy cases.
However, much remains vague concerning the bloc's future anti-dumping actions, especially its treatment of China, which ranks as the European Union's second largest trading partner.
Presently, the EU has sorted countries into two lists - as market economies and non-market economies - and treated each with different anti-dumping calculation methods.
The EU often labels goods from China, which is on the "non-market economies" list, as being dumping based on the "surrogate system" which is due to expire on December 11 according to China's accession agreement to the World Trade Organization (WTO).
The commission's move on Wednesday is viewed as a strategy to cut the link between "market economy status" and the expiry of WTO provisions concerning China, which, unfortunately, have been deeply mixed up and for a long time provoked debates both in Europe and China.
Chinese leaders have made it clear that Beijing wants WTO members to respect their international legal obligations which is a separate issue from the arguments of its "market economy status."
If the EU, as the WTO protocols provide, stops comparing the prices of Chinese imports with that of a third country, or a surrogate country, but to apply Chinese domestic prices as a basis to conclude whether China dumps its products, it would be a true commitment to international obligations for the bloc and be favorably to EU-China trade relations.
However, when the commission said it would change the calculation system and create an "additional non-standard" methodology which could be potentially applied to all countries, it failed to clarify one thing: is it going to change the practice or just change the name?
Therefore, doubts have been raised when the commission official said the new system would lead to approximately the same level of anti-dumping duties as the EU has currently. Furthermore, the new methodology will take into account "international prices," the body added.
If "international prices" means the EU will continue to compare the prices of Chinese imports with that of other countries, the only difference between the old and new methodologies will be in scope and name.
In other words, it will be the equivalent of putting all WTO members on a new list without the label "non-market economies" applying a similar methodology and imposing the same or heavier anti-dumping and anti-subsidy duties.
Brussels's move to get rid of the "non-market economies" list is necessary to end the irrelevant discussion on whether China is a market economy. But the same ideology of trade protectionism in a new package can neither promote domestic development nor benefit international trade.
Hopefully, the EU's ongoing modification to its anti-dumping regulations can fulfill its commitment to WTO obligations as well as strengthen its relationship with China.
