Newsletter 1/2016

China’s Market Economy Status
A Crucial EU Trade Issue

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Introduction - focused on China

Commonly affected by the potential granting of Market Economy Status (MES) to China

According to previous negotiations China is looking forward to being granted MES by the EU by the end of 2016 depending on the fulfilment of certain criteria.

Industry Position

Hence, several sectors joint efforts at regional and national level and created industrial alliances trying to correct such a potential decision. One such Alliance is AEGIS Europe, bringing together nearly 30 European associations. Other alliances include not only the US level one but several others in Poland, Slovakia, France etc.

European magnesite producers position (Euromines)

One of the sectors concerned is the European magnesia industry. Granting China Market Economy Status (MES) starting December 2016 would threaten the competitiveness and survival of many European companies, especially SMEs, undermine the effectiveness of the EU’s trade defence system and expose the EU magnesite/magnesia sector to potentially unlimited Chinese dumping. 

Insisting on the necessity of a full and formal impact assessment of a possible grant of market economy status to China

The social impact of granting MES in terms of EU jobs lost is very substantial whatever the economic methodology used to calculate them. The Commission believes that the only jobs at risk are those direct jobs related to the specific products covered by anti-dumping duties in force, i.e. around 250 000 jobs. Moreover, they further contend that the importance of anti-dumping measures can be gauged by the very small volume of imports from China which is subject to these duties, i.e. 1.38% of total imports from China. Both premises are wrong. It is important to calculate both the direct and indirect (upstream and downstream) job impact, as well as the deterrence effect of maintaining an effective anti-dumping instrument (which would be lost if MES were granted).

European Commission - Fact Sheet

  • College orientation debate on the treatment of China in anti-dumping investigations
  • What are anti-dumping duties and how are they calculated?
  • Does this mean that "Market Economy Status" is about how to calculate anti-dumping duties?
  • What do the existing rules say?
  • How much trade is involved?
  • Why does the College hold an orientation debate at this moment in time?
  • Will the position of major trade partners - like the US – influence this process?
  • What would be the legal procedure in case of such a change of the methodology in calculating dumping rates?