Commentary: New EU trade rules encroach upon WTO principles

Source: Xinhua| 2017-12-22 18:19:33|Editor: Zhou Xin
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BEIJING, Dec. 22 (Xinhua) -- As an effective organ to safeguard free trade across the world, the World Trade Organization (WTO) has seen its fundamental principles upheld by most members. Disagreements arise now and then, and a respect for the WTO's role to settle disparities has been key in driving global trade.

In a long-winded report on Tuesday, the European Commission went defiant of WTO rules by inviting the notion of "significant market distortion."

The new anti-dumping rules carefully refrained from focusing on whether China is a "market or non-market economy."

However, the rules introduce the concept of "significant market distortion" between a product's sale price and its production cost. The European Union (EU) has thus employed once again its "surrogate country" approach by calling out China as a country with "significant market distortion."

WTO countries can look at a "surrogate country" to determine whether China is exporting goods at unfairly low prices and therefore dumping its products. This was a practice that should have ended a year ago, 15 years after China became a WTO member in December 2001; unfortunately, it endures.

There is no such concept of "significant market distortion" under the WTO. The EU's methodology lacks support from the WTO and weakens the authority of its anti-dumping legal system.

This is not the first time the EU has meddled with concepts concerning trade with China. It's normal to dispute a trading partner as long as doing so falls within an already established, sound legal system; however, the EU has refused to abandon measures outlawed by the WTO, such as rules relating to a surrogate country.

For 16 years China has sacrificed plenty simply by upholding the WTO's legal principles and rules. Distortions of the WTO framework for a single party's benefit are intolerable. The EU has created its own rules, putting China at a disadvantage.

China reserves its rights under the WTO dispute settlement mechanism and will take necessary measures to protect its legitimate interests.

Nevertheless, China aims to properly settle trade disputes, whether with the EU or anyone, in a manner that is fair to all parties. The current EU approach is in blatant violation of WTO rules and unfairly targets China.

When meeting with European Council President Donald Tusk last month in Manila, Chinese Premier Li Keqiang said China and the EU should strive to solve their long-standing problems with "greater wisdom."

China is pushing forward cooperation with different parts of Europe. Apart from robust trade links with major economies on the continent, the cooperation mechanism between China and 16 Central and Eastern European countries, known as "16+1", has flourished soundly in recent years.

When it comes to trade, China believes that all parties could bake a cake big enough for everyone to have a bite, if only they choose to work in the same kitchen.