U.S. Manufacturers Pushing to Deny China Market Economy Status
03/17/2016 - The American Iron and Steel Institute, along with The Aluminum Association and five other U.S. manufacturing groups, have launched a campaign to oppose granting China market economy status.
Called Manufacturers for Trade Enforcement, the coalition argues that China’s support of its manufacturers has distorted global markets and therefore shouldn’t be considered a market economy member of the World Trade Organization.
“The unfortunate reality is China continues to be a state-run economy in many respects, creating an unlevel playing field for manufacturers here at home,” said Thomas J. Gibson, president and CEO of the American Iron and Steel Institute, in a statement. “What we are calling for is a fair and accurate assessment of the Chinese economy – and we believe that will show that market economy status for China is not warranted at this time.”
China’s accession agreement with the WTO allows the country to be treated as a non-market economy in anti-dumping proceedings, which generally has led to higher duties in cases where Chinese producers were found to have dumped in export markets.
Given the higher duties and given the frequency of investigations initiated against it, China has been eager to receive market economy status, something it says is to be automatically conferred by 11 Dec 2016, the 15th anniversary of its accession.
However, American manufacturers argue that status doesn’t come automatically, that U.S. law requires the Commerce Department to determine whether China indeed has free markets, based on established criteria.
And China has failed to meet the criteria, the manufacturers say.
“The Chinese economy does not meet the basic requirements set forth by U.S. statutes and the Department of Commerce for a functioning market economy, and we will work together in this coalition to speak loudly, and with one strong voice, to prevent China from gaining a status that it does not yet deserve,” said Heidi Brock, president and CEO of the Aluminum Association, in a statement.