Back in November, I mentioned a blog post by trade lawyer Bernard O'Connor arguing that the end of China's NME status might be further off than many people think. There was some good discussion of these issues in the comments to that post. Then in December, I mentioned a paper by Christian Tietje and Karsten Nowrot on this same issue. Bernard now has a response to that paper. The full paper is here. Here is an excerpt:
The Myth of China and Market Economy Status in 2016
There have been some comments on an earlier blog which highlighted the myth of automatic Chinese MES in December 2016. In particular, one respected commentator[1] suggests 'the 11 December 2016 is certainly not a myth - it is reality. From that date onwards, it will be almost impossible - at least from the perspective of WTO law - to make a determination of the normal value of products targeting by an anti dumping proceeding on the basis of analogous third party methodology.'[2]
This Tietje and Nowrot analysis makes good points. And the points deserve substantive comment. However, the comment goes beyond what the 'myth' blog proposed. The myth blog sought to make the point a) that there is nothing in the China Accession Protocol granting MES automatically and b) China will have to show that it is a market economy under the domestic law of the importing WTO Member, even after 2016. The Tietje and Nowrot Policy Paper agrees with this proposition from a theoretical perspective. They state: Article 15 of the Accession Protocol of China to the WTO 'itself does not explicitly bestow NME-status on China'.[3] And further on: 'Again, the second sentence of paragraph 15(d) of the accession protocol itself does not explicitly grant China MES from the "magic" date onwards.'[4]
The question now raised by Tietje and Nowrot is: What anti-dumping instruments can a competent authority use after 11 December 2016 when the provisions of Article 15(a)(ii) have expired? The Teitje and Nowrot answer is: 'from 11 December 2016 onwards Chinese imports have to be treated with regard to a determination of normal value in the same way as imports from any other WTO member.'[5] Thus they move from the theoretical possibility of the continuation of non market economy status to the practical conclusion that importing WTO Members will have to rely on normal WTO anti-dumping rules.
[1] Policy Papers on Transnational Economic Law no 34: Myth or Reality? China's Market Economy Status under WTO Anti-Dumping Law after 2016 by Tiejte and Nowrot.
[2] Ibid page 11.
[3] Ibid page 6. I am presuming that the authors are referring to ME or market economy status rather than NME or non market economy status.
[4] Ibid page 7.
[5] Ibid page 11.
