Brussels has signaled that it will radically overhaul its anti-dumping practices worldwide in an attempt to lessen the effect of China winning so-called market economy status later this year.
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European Commissioner for Trade Cecilia Malmström proposed an unexpectedly drastic compromise Wednesday. While Brussels will have to accept in December that Beijing deserves market economy status under World Trade Organization rules, she said that the Commission would compensate by rolling out an entirely new anti-dumping methodology to hold trade defenses at their current level.
“The college [of commissioners] has agreed to propose changes to the EU anti-dumping and anti-subsidy legislation with the introduction of a new anti-dumping methodology, to capture market distortions linked to state intervention,” Malmström said. “So this is a new method, it will be country-neutral and will be applied equally to all WTO countries. We are eliminating the existing list of non-market economy countries.”
A formal proposal is expected from September and would need approval from the member countries and the European Parliament.
“This new methodology would lead to approximately the same level of anti-dumping duties as we have today,” the commissioner continued. “[This] is a way to both safeguard our economic interest and protect European jobs.”
If I understand this correctly, and I'm not sure that I do, China and other countries would no longer be considered non-market economies. However, a new, generalized anti-dumping methodology would lead to anti-dumping calculations that result in China and these other countries being subject to anti-dumping duties in just about the same amounts that they currently are as non-market economies.
Will this solution make everyone happy? Or will it lead to the same kind of litigation that would have occurred if the EU kept treating China as a non-market economy?