China files WTO dispute case over surrogate country approach

Claiming market economy status after completion of 15 years in WTO, China has launched dispute settlement procedures by requesting consultations with the US and EU regarding the surrogate country approach when calculating anti-dumping measures against Chinese exports.
In accordance with Article 15 of the accession protocol signed when China joined the WTO in 2001, the surrogate country approach expired on December 11, the Chinese Ministry of Commerce said today in a statement.
All WTO members should live up to their international obligations to abandon the surrogate country approach when calculating anti-dumping measures against Chinese exports, it said.
Unfortunately, the US and the European Union have not fulfilled this obligation yet, it said.

Under the surrogate country approach, WTO members use costs of production in a third country to calculate the value of products from countries on its "non-market economy" list, which includes China.
The practice allows countries to easily levy high tariffs in trade disputes.

The US and the EU's use of the surrogate country approach has seriously affected exports and employment in some Chinese industries, the ministry said.
China reserves its right under the WTO rules and will resolutely defend its legal rights, it said.
In a commentary, state-run Xinhua news agency said Japan and its Western allies, all major WTO members are breaking their moral and legal commitments to the WTO by refusing to recognise China's deserved "market economy status (MES)", even though China has automatically switched over to the status under WTO rules yesterday.

Nevertheless, the refusal will neither write off China's dedication to the world's free trade for 15 years, nor undermine its resolve to continue pursuing the global connectivity by means of such arrangements as the Asian Infrastructure Investment Bank, the Belt and Road Initiative, and the Free Trade Area of the Asia-Pacific, it said.
"The west's protectionist shenanigans in the excuse of defending the public wellbeing is but an attempt to cover up its reluctance to lose the rule-making monopoly, one of the chief culprits for the current flawed global system that is more preferable to the affluent minority," it said.

"It is highly advisable for all the global trade partners to relinquish the zero-sum mentality and work with China for mutually beneficial cooperation to make a robust global recovery," it said.