MNI: China Toughens Stance in Trade Conflicts with U.S. and EU

     BEIJING (MNI) - In a drastically different tone to that heard during U.S.

President Donald Trump visit to Beijing a month ago, the Chinese government on

Thursday sharpened its rhetoric on trade relations with both the United States

and the European Union, charging that its two largest trading partners are

trying to weaken the World Trade Organization.

     At a press conference here, Ministry of Commerce (MOFCOM) spokesman Gao

Feng claimed the U.S. Trade Representative's recent declaration refusing to

recognize China as a market economy "put domestic law over international law"

and said the U.S. might be trying to ignore WTO rules. 

     Being recognized as a market economy would limit the ability of other

countries to use domestic anti-dumping trade laws against China. Beijing argues

that it should now be recognized as a market economy under agreements made when

it entered the WTO in 2001. 

     CHINA SAYS U.S. 'PLAYING DIRTY' ON TRADE

     China believes the U.S. was intentionally sending a "negative signal" ahead

of a WTO hearing held Wednesday to discuss China's complaint against the use by

the EU of a stronger "surrogate country approach" in implementing anti-dumping

sanctions, Gao said.

     Gao's comments came days after China's Ministry of Foreign Affairs argued

the U.S. insistence that China was not a market economy is "reminiscent of the

domestic laws of certain WTO members during the Cold War era." 

     Chinese officials and state media have openly blasted the USTR

announcement, charging the U.S. is "playing dirty" to further its trade agenda. 

     MARKET ECONOMY STATUS KEY TO LIMITING TRADE SANCTIONS ON CHINA IMPORTS

     The U.S. officially opposed China's bid to be granted market-economy status

in a submission to the WTO in support of the EU's position in a complaint

brought by China against the EU anti-dumping trade practices. The U.S. and EU

hold that the Chinese government's central role in the country's economic

system, especially the dominance of state-owned enterprises, fails the test for

a true market-based economy. 

     China has been seeking market-economy status to prevent other countries

from continuing to use the "surrogate country approach" in determining the value

of anti-dumping trade sanctions. This approach allows countries to use the

prices of goods in third countries as a comparison to the prices of disputed

imports, leading to sanctions of much higher value. The prohibition on using

this approach would see much lower import duties imposed on Chinese goods, or

none at all, significantly improving the outlook for Chinese exports.

     U.S. opposition to China being granted market-economy status, along with

its recent trade actions against Chinese imports -- such as its anti-dumping and

countervailing duty investigations of Chinese aluminum alloy sheet imports --

are hurting bilateral trade relations, Gao stressed.

     "Trade protectionism is like drinking poisonous wine to quench thirst," Gao

told reporters. "Only open cooperation can expand the benefits of both sides."

     Gao iterated that China urges all WTO members, including the U.S. and EU,

to comply with WTO rules "truly and entirely", in particular stopping the use of

the "surrogate country approach" in anti-dumping trade actions. 

     "China has always stressed that it will fulfill the obligation required by

the WTO," Gao said. "But China must have its rights assured by the WTO."

     Chinese Commerce Minister Zhong Shan will lead a delegation to the 11th WTO

Ministerial Conference to be held December 10-13 in Argentina capital Buenos

Aires joining trade and commerce officials from the other 163 WTO countries, Gao

said. The future direction of the global multi-lateral trading system would be

discussed at meeting and China will seek to defend the authority and

effectiveness of WTO rules, he said. 

--MNI Beijing Bureau; +86 (10) 8532-5998; email: iris.ouyang@marketnews.com

--MNI BEIJING Bureau; +1 202-371-2121; email: john.carter@mni-news.com

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