US and EU may resort to more trade battles

When China joined the World Trade Organization on Dec 11, 2001, it was told that it would be recognized as a market economy after 15 years. Until now the main players in world trade, especially the United States and the European Union, have not only denied China the market economy status but also initiated a large number of anti-dumping investigations against Chinese products and imposed extraordinarily high tariffs to block their sales.

So now that China has completed 15 years in the WTO, the US and the EU should grant China the market economy status. However, the two dominant trade players seem keen to continue the unfair game even though China should no longer be subjected to the discriminatory rule.

Since the US and the EU do not see China as a market economy, they often use production costs of other countries as reference to assess whether Chinese exporters are dumping their products. For example, considering the cost of a Chinese producer making a washing machine is 1,500 yuan ($217.7), it cannot be accused of dumping if it sells it in the EU market for 2,000 yuan. But if investigators take the cost of production in Singapore, which could be more than 2,000 yuan, as reference, then the Chinese producer can face dumping charges.