Setting Up the Relationship With China

At the end of July, the College of Commissioners held an orientation debate concerning political, economic and legal impacts of the expiry of some provisions in China’s Protocol of Accession to the World Trade Organisation which will end on the 11th of December 2016, and the possibility of granting China the market economy status that would significantly change the way that antidumping tools to protect EU market have been used.

The first orientation debate took place already in January 2016. After that, the European Commission has performed thorough impact assessment focused on possible economic consequences and job loss in member states.

Furthermore, a public consultation was launched. There are three possible options on how the Commission can deal with China: firstly, to leave the current legislation as it is; secondly to remove China from the list of non-market economies and apply the standard methodology for dumping calculations; and thirdly, to change the current antidumping methodology and set a new approach that would keep the rm trade defence system while meeting international obligations. According to the Commissioners, the EU has to take into account the current reality of vast overcapacity in China that negatively influences and jeopardizes EU industries, and adapt its trade defence instruments to it. At the same time, the Commission supports free trade and recognizes the importance of China as a major EU trade partner.

According to Czech employers’ and entrepreneurs’ organizations, the expiry of WTO provisions does not automatically mean that the market economy status has to be granted to China. It has to be taken into account that China does not meet almost any conditions of market economy. Weakening of trade defence instruments would mean a high risk for certain industries in the Czech Republic. Furthermore, they fear that this weakening would lead to significant job losses. Therefore, Czech employers’ and entrepreneurs’ organization support the effort of the Commission to swiftly modernise trade defence instruments of the EU and to strictly stick to WTO rules. The final position of the Commission will be known by the end of the year.