EU's adoption of 'market distortion' principle is trade protectionism: Xinhua report Published: 2017/10/4 15:09:03

The European Union (EU)'s agreement to use the "market distortion" principle when it investigates Chinese products for alleged anti-dumping violations is essentially the "analogue country method," which violates WTO rules and is trade protectionism, the Xinhua News Agency reported Wednesday.

The report came after representatives of the European Commission, European Parliament and European Council agreed new rules Tuesday to limit cheap Chinese imports.

According to the new rule, the EU will now treat all WTO members the same when deciding whether to impose tariffs, Reuters reported. It added that businesses will be considered to be dumping if their export prices are below their domestic prices.

Instead, the EU will make exceptions for cases of "significant market distortions", for example, excessive state intervention, a case expected to include numbers of Chinese firms, the report said.

The European Commission proposed the amendment to its anti-dumping regulation in November last year, stating "undistorted" international prices and costs are alternatives if "significant distortions in an exporting country's products' prices and costs exist."

"The new rule uses international prices instead of export prices when carrying out anti-dumping investigations. The EU plans to use the 'market distortion' method instead of the analogue country method, but in fact didn't actually replace the former method. It violates WTO rules, as there is no 'market distortions' concept according to the organization," Xinhua reported, citing an expert.

Section 15 of the accession protocol formulated by the WTO and China in 2001, when the country joined the organization, states that the "analogue country method" expires 15 years after the date of China's accession, which fell on December 11, 2016.

Posted in: ECONOMY

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