China Abandons Bid To Be Named Market Economy
As our members might recall, the Metals Service Center Institute is part of Manufacturers for Trade Enforcement, a coalition of leading U.S. industry groups created in 2016 and united in their opposition to the granting of market economy status to China.
The coalition earned an important victory a few weeks ago when the Chinese government gave up on its appeal to the World Trade Organization (WTO) to gain market economy status. As Reuters explained, “Without a WTO ruling in Beijing’s favor, the EU and United States can keep imposing duties on cheap imports from China while disregarding its claim that they are fairly priced.”
The Chinese government had been arguing that, under the terms it was admitted to the WTO in 2001, it must be recognized as a market economy in2016.
The U.S. government, along with the European Union (EU), opposed that opinion. Specifically, the United States and the EU, as Reuters explained, argued Chinese goods, particularly steel and aluminum, were still heavily underpriced because of subsidies and state-backed oversupply, giving Chinese exporters an unfair advantage.
The MTE coalition also argued the Chinese economy did not meet the basic requirements to be recognized as a market economy and that granting market economy status to China would hurt U.S. manufacturers.
Just a few short weeks after announcing it would end its WTO case, the Chinese government, without giving specifics, announced that it will reduce tariffs, improve export tax rebate policies and cut insurance fees for export companies. According to Reuters state television quoted unnamed individuals in the government as saying. “We will improve our reserve of policy tools and roll the measures out at the right time.”