UNITED STATES (OBSERVATORY) – The new rules applied by the European Union to countries whose market is flooded with cheap goods are facing opposition at the World Trade Organization (WTO), with China, Russia and Saudi Arabia leading collectively, a trade official said on Thursday.
The European Union, in a major dispute with Beijing over China’s pricing fairness, applied the rules in December, allowing it to take into account the “big distortions” in prices resulting from government intervention.
An official attending the meeting said a Chinese trade official told the WTO Anti-Dumping Committee that Beijing had serious concerns about the new approach, saying it would harm the WTO’s anti-dumping system and increase mistrust for exporters.
China says that the concept of “big distortions” does not exist within the rules of the World Trade Organization, and the EU should base its investigations on dumping to domestic prices in countries of origin such as China.
The EU has reformed its rules in the hope that it will continue to protect its markets from cheap Chinese imports while standing up to any legal challenge from China at the World Trade Organization.
China says that when it joined the World Trade Organization in 2001, the rest of the member states agreed that after 15 years they would treat it as a market economy.
But the United States and the European Union refuse, saying that China still supports some industries such as steel and aluminum with a huge surplus in production capacity and pump huge supplies into the global market making it impossible for others to compete.
China is suing the United States and the European Union at the World Trade Organization in an effort to force them to change their rules.
Legal experts say the conflict is one of the most important conflicts in the 23-year history of the organization, because it places major trade blocs in front of each other, where fundamentally different views exist on how to apply the rules of world trade.
Saudi Arabia said at the World Trade Organization (WTO) meeting that the new rules were very worrying, challenging the EU to explain how the EU authorities could ensure a fair and objective assessment of “major distortions”.
Russia says European Union rules violate WTO rules, and some aspects are unclear and cause big fog for exporters. Bahrain, Argentina, Kazakhstan and Oman also expressed concerns.
But a US trade official says the debate has shown that appropriate tools are available within the WTO to address distortions that affect global trade.