This is from law professor Weihuan Zhou:
The China – EU (US) fight over issues relating to China’s market economy status is attracting growing prominence. In the ongoing EU – Price Comparison Methodologies (DS516) dispute, the WTO panel will need to determine, amongst other issues, whether Section 15 of China’s WTO Accession Protocol is ambiguous and how much importance will need to be attached to the supplementary means of treaty interpretation.
Our recent paper discusses a number of weaknesses in the EU’s written submission on Section 15, and the negotiating history of Section 15 under both the GATT/WTO multilateral negotiations and the US-China bilateral negotiations. We believe that Section 15 is sufficiently ambiguous so that the supplementary materials may well be decisive in resolving the dispute.
While the records of the multilateral negotiations provide little guidance on the status of Section 15, the records of the US-China bilateral negotiations show convincingly that the compromise reached between the US and China on Section 15 was that while China accepted the application of the special antidumping rules, the US agreed that these rules would remain applicable for fifteen years only. Furthermore, the Sunset Clause of Section 15 was intended to apply to the special antidumping rules as a whole, and was not intended to be limited to any part of the rules. In addition, the records provide no support for the “Shifting in Burden of Proof” approach proposed by the EU and the US. The evidentiary burden under Section 15 was not discussed at all in the bilateral negotiations. The importance of the bilateral negotiating history is attributed to the fact that the language of Section 15 was negotiated and drafted in the US-China bilateral talks, and was subsequently transposed directly into China’s Accession Protocol. No GATT/WTO records publicly available suggest that the final text of it, as negotiated and drafted by the US and China, does not reflect the common intention of the WTO Members.
It must be noted that the WTO-legality of the EU’s new AD methodology is a separate issue in the dispute, which, following the recent AB decision in EU – Biodiesel (see my WTR paper), will continue to test the flexibility of Article 2 of the AD Agreement in relation to the use of surrogate prices or costs based on state intervention and market distortions.
The paper is really interesting, and has details on the negotiating history of Section 15 that I had never seen before.
