What Happened: China has requested that the World Trade Organization (WTO) panel with oversight of the case China brought against the European Union regarding whether it should be treated as a nonmarket economy suspend its work, according to a communique released by the WTO on June 14.
Why It Matters: Leaks had indicated that the panel would decide in favor of the European Union, which could explain the Chinese suspension. China might also be trying to avoid having the case be decided amid its ongoing trade conflict with the United States lest it give Washington more ammunition against Beijing.
Background/Context: China joined the WTO in 2001 under a 15-year transitional period where it was subject to special rules as a nonmarket economy. One of the main consequences of the special rules for nonmarket economies is that it allows for easier anti-dumping and countervailing duties to be applied to them. The European Union and the United States have argued that China should still be treated as a nonmarket economy, while China argues it should not. In December 2016, it brought cases against the European Union and the United States for still treating it as a nonmarket economy. The EU case has progressed quicker than the U.S. case, and it now appears that China is losing.
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- Europe Considers a New Trading Status for China (Feb. 8, 2016)