Dumping Levies for Chinese Exports Could End Next Year

China has served notice to World Trade Organization members including the European Union and United States that complaints about its cheap exports will need to meet a higher standard from December 2016, a Beijing envoy said at a WTO meeting.

Ever since it joined the WTO in 2001, China has frequently attracted complaints that its exports are being “dumped”, or sold at unfairly cheap prices on foreign markets. Under world trade rules, importing countries can slap punitive tariffs on goods that are suspected of being dumped.

Normally such claims are based on a comparison with domestic prices in the exporting country.

But the terms of China’s membership stated that — because it was not a “market economy” — other countries did not need to use China’s domestic prices to justify their accusations of Chinese dumping, but could use other arguments.

China’s representative at a WTO meeting on Tuesday said the practice was “outdated, unfair and discriminatory” and under its membership terms, it would automatically be treated as a “market economy” after 15 years, which meant Dec. 11, 2016.

All WTO members would have to stop using their own calculations from that date, said the Chinese envoy, whose name was not given by a WTO official who spoke to reporters about the meeting.

Dumping complaints are a frequent cause of trade disputes at the WTO, and dumping duties are even more frequently levied on Chinese products.

via Reuters

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza