Volume 49
Issue
2
Date
2018

China’s Long Road to Market Economy Status

by Jeffrey M. Telep and Richard C. Lutz

In July 1986, China applied to become a participant in the World Trade Organization’s predecessor, the General Agreement on Tariffs and Trade. This application began a fifteen-year negotiation, which culminated in China’s acceptance into the WTO in December 2001. From China’s perspective, its acceptance into the WTO also meant that it could finally put an end to being treated as a non-market economy in antidumping proceedings by other WTO members fifteen years following its accession. In particular, at the time of accession, China negotiated the removal of certain language from its WTO accession agreement that it believed served as the legal basis for non-market economy treatment in antidumping proceedings. With the removal of that language in December 2016, China believed that no WTO member would be able to legally continue to treat it as a non-market economy in antidumping proceedings. December 2016 has come and gone, the language has been removed from its accession agreement, but the EU and the United States continue to treat China as a non-market economy, and it appears China will continue to be relegated to this status for the foreseeable future. This Article addresses the accession agreement language regarding China’s status as a non-market economy, the removal of that language, and the respective arguments of the EU and the United States in certain WTO proceedings regarding the significance of the terms of China’s accession.

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