Dems push for US, EU cooperation on China’s market status

Two congressional Democrats on Thursday called on U.S. and European Union trade officials to cooperate more closely on China’s market economy status.

Rep. Sandy Levin of Michigan and Sen. Ron Wyden of Oregon sent a letter to U.S. Trade Representative Michael Froman and European Trade Commissioner Cecilia Malmström calling on the trade leaders to improve engagement on their enforcement efforts and address concerns about some World Trade Organization (WTO) decisions.

{mosads}”We write to urge deeper cooperation on our shared enforcement objectives, including the unique challenges posed by continued market distorting behavior in China,” Levin and Wyden wrote.

The Chinese government expects at the end of the year Beijing will automatically be granted market economy status under WTO rules that were a part of their accession 15 years ago.

In most cases, China is considered a nonmarket economy and regulators like the Commerce Department that levy anti-dumping duties would have to change how they calculate those penalties on Chinese goods.

Neither Levin, ranking member of the House Ways and Means Committee, nor Wyden, the top Democrat on the Senate Finance Committee, believe that there is any requirement under WTO rules that China must be granted market economy status. 

Earlier this week, the United States and the EU joined forces on a WTO case against China over restrictions on critical raw materials and the two trading partners have previously teamed up on rare earth elements cases.

“Going forward, we believe that it is critical that the United States and Europe work much more closely on enforcement matters,” Levin and Wyden wrote. 

“However, in other instances this cooperation has fallen short of what is needed to ensure the best outcome for workers and businesses in both Europe and the United States,” they said.

The question on upgrading to market economy status comes as lawmakers in Congress and the Obama administration fret over an overcapacity of Chinese steel in the U.S. that has hurt the industry here.

On Tuesday, Malmström told reporters that the issue isn’t about whether China is a market-driven economy because it’s not. 

“It’s about some provisions in a WTO accession protocol that we are discussing intensively now in the European Union and in other countries,” she said. 

EU officials said this week that the focus of their debate has shifted to new ways of imposing tariffs in anti-dumping cases that provide the same level of protection for their businesses that is currently in place.