Alan Price Discusses Whether China Must Be Treated as a Market Economy

January 5, 2016

Alan H. Price, chair of Wiley Rein’s International Trade Practice, was quoted in yesterday’s Bloomberg BNA coverage of whether World Trade Organization (WTO) members must start recognizing China as a “market economy” in December 2016. China is not a market economy and has not met its WTO obligations to warrant such recognition, Mr. Price said in an article published in BNA’s International Trade Daily and Daily Report for Executives.

According to the article, a senior Chinese official indicated in a briefing last week that WTO members must start treating China as a market economy later this year. The official said Article 15 of the 2001 protocol on China’s accession to the WTO requires members to stop using an alternative, non-market economy calculation method in antidumping investigations against China after December 11, 2016. However, the U.S. Commerce Department told Bloomberg BNA that the WTO protocol contains no provisions requiring a change of practice in 2016 with respect to China, and that nonmarket economy status can be re-evaluated only by Commerce’s Enforcement & Compliance Division in the context of an antidumping proceeding based on a formal request from China.

Mr. Price told Bloomberg BNA that Article 15 does not give China an automatic right to market economy status.

“China’s so-called reforms are far behind where trading partners needed China to be to warrant market economy treatment, and China hasn’t lived up to its WTO accession obligations on pricing, state-owned enterprises, or subsidization,” Mr. Price said. “Granting market economy status when China clearly is not a market economy harms the entire multilateral trading system and major players like the EU and U.S.,” he added.

Mr. Price and his colleagues also addressed this topic in a Wiley Rein white paper published in September 2015.