Brown Urges European Parliament to Maintain China’s Nonmarket Economy Status

Senator’s Plan for Trade with China Outlines Concerns that China’s State-Controlled Economy Puts Ohio Workers at Disadvantage

Senator Will Meet with German Ambassador, French Ambassador This Week 

WASHINGTON, D.C. – U.S. Sen. Sherrod Brown (D-OH) today urged the European Parliament to ensure that any changes to China’s nonmarket economy status do not negatively impact the United States or the European Union, particularly in regards to antidumping investigations. This week, Brown is meeting with German Ambassador Peter Wittig and French Ambassador Gerard Araud to discuss trade.

As the European Union continues to consider changes to China’s trading status, Brown outlined concerns over designating China’s economy as a market economy in a letter to the European Parliament’s Committee on International Trade Chairman Bernd Lange and Rapporteur Salvatore Cicu.

There is no doubt that China’s economy remains state-controlled and that this state control has contributed to massive global market distortions,” said Brown in the letter sent today. “The U.S. continues to rely upon its antidumping laws to address the impact of China’s nonmarket economy and is working to build a coalition of international trading partners, including the EU, to increase China’s compliance with its WTO obligations. It is imperative that any EU policy changes on nonmarket economy not undermine U.S. trade remedy statutes or these coordinated efforts among allies.”

Brown has cautioned against granting China market economy status in the past, noting that doing so could negatively impact the U.S. steel industry and undermine efforts to get China to comply with its international trade obligations. Brown outlined these and other concerns in a plan he outlined for President Trump’s 100 Day Plan on trade with China.

Full text of the letter is below and available here.

Dear Chairman Lange and Rapporteur Cicu:

Global market distortions continue to undermine European and American manufacturers and their workers, forcing facilities to idle and workers to lose their jobs in numerous sectors.  Strong EU-U.S. collaboration and close coordination on the enforcement of international trade standards are essential to effectively addressing the underlying causes of these distortions.  As you continue to consider the proposal regarding the EU’s designation of China’s nonmarket economy status, particularly with respect to antidumping trade cases, I urge you to ensure any EU policy changes will not undercut efforts by the U.S. and other trading partners to protect our industries from unfair trade practices and to ensure China transitions completely to a market economy.

Article 15 of China’s World Trade Organization (WTO) Accession Protocol does not require countries to treat China as a market economy in antidumping investigations by the end of 2016, despite China’s claims. Only one provision of Article 15 – subparagraph (a)(ii) – expired in December 2016.  The other provisions of Article 15 remain in force, and WTO members are allowed to use an alternative antidumping methodology in trade cases to accommodate for nonmarket economy distorted costs. 

There is no doubt that China’s economy remains state-controlled and that this state control has contributed to massive global market distortions.  The U.S. continues to rely upon its antidumping laws to address the impact of China’s nonmarket economy and is working to build a coalition of international trading partners, including the EU, to increase China’s compliance with its WTO obligations.  It is imperative that any EU policy changes on nonmarket economy not undermine U.S. trade remedy statutes or these coordinated efforts among allies.  

To that end, I urge you to ensure any EU proposal underscores the ongoing authority granted under Article 15 for countries to treat China as a nonmarket economy in antidumping cases. In addition, any changes to EU law must place the burden of proof on exporting producers in nonmarket economies to justify the use of individual costs in antidumping cases.  If petitioning producers must justify the use of antidumping methodologies and costs in nonmarket economies, our trade remedy laws will be significantly weakened and less effective.  Perhaps most important, I urge the EU to make joint submissions with the U.S. in the nonmarket economy WTO cases brought by China.  The U.S. will be making the same legal arguments against the Chinese government, and joining forces in the case will ensure there is no daylight between the EU and U.S. positions.

I know you share my concerns that China’s state-controlled economy has threatened and continues to undermine EU and U.S. industries.  The U.S. and EU must collaborate closely and join forces on nonmarket economy policies to prevent unintended consequences that may inhibit our efforts to level the playing field for our workers.   Any changes must preserve the ability of the EU and the U.S. to defend our economies from unfair trade practices and encourage China to transition to a market economy.

Thank you for your consideration of this letter. 

Sincerely,

Sherrod Brown                                                          

United States Senator

 

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