Last year China made complaints to the WTO that the United States and European Union were not treating it as a market economy. In a briefing to the court in China’s case, the U.S. has, for the first time, laid out why it doesn’t believe China is a market economy. Jacob Schlesinger writes at The Wall Street Journal:
China filed complaints late last year against both the U.S. and the EU with the WTO trade court demanding that the U.S. and EU grant it market status. The U.S. case has since stalled, but the complaint against Europe is moving forward toward hearings. What the U.S. revealed on Thursday was a brief supporting Europe in its case. That, officials say, shows that Washington will take a similar stance when its own case proceeds.
“The evidence is overwhelming that WTO members have not surrendered their longstanding rights…to reject prices or costs that are not determined under market economy conditions,” the U.S. brief concludes.
Under President Donald Trump’s “America First” economic policy, tensions have risen between the U.S. and various American trading partners over Mr. Trump’s vows to cancel existing trade accords and take more aggressive action to curb imports from all over the world, including from allies like Europe.
But in the battle over China at the WTO, the U.S., Europe, and others appear to be coordinating closely to present a united front against Beijing.
“We’ve been talking to the Europeans…there is a common understanding that we’ve reached,” said a senior U.S. official involved in preparing the filing. Such cooperation, he added “is really quite unusual, to have us all on the same side of this issue.”
Mr. Trump and his aides have over the past year been openly skeptical about the WTO and their views about its ability to govern the global trading system, particularly China. And they have said they see the market-economy cases as a litmus test for how they judge the body.
“This is without question the most serious litigation matter we have at the WTO right now,” Robert Lighthizer, Mr. Trump’s U.S. trade representative, told Congress in June. A China victory, he added, “would be cataclysmic for the WTO.”
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