WTO debacle heralds end of postwar trade regime

When China joined the WTO on Dec 11, 2001, it was written into the agreement that members could treat China as a "non-market economy", due to the size of the Chinese economy, government intervention and its State-owned enterprises. As a result, advanced economies could ignore Chinese domestic price comparisons and rely on "constructed values" to reflect the "true" Chinese economy.

In turn, those "surrogate figures" allowed them to impose heavy anti-dumping duties on the basis that China's low prices did not reflect market realities.

As Dec 11, 2016 deadline for this practice approached, their lobbyists, which represent some of the most uncompetitive companies in a few sectors (especially steel), began to urge WTO members to "reinterpret" the accession language. Now it was argued that in the original agreement there was an "escape clause," which would conveniently justify the continued treatment of China as a non-market economy.