The European Commission has launched an online public consultation on methods used in the EU’s antidumping procedures concerning China.

The question is whether, and if so, how, the EU should change the treatment of China as a market economy in its anti-dumping investigations after December 2016.

Certain provisions of Section 15 of China’s Protocol of Accession to the WTO will expire in December 2016. As a result, the Commission is analyzing possible impact on the EU anti-dumping legislation.

Under standard rules, in normal market circumstances, dumping is calculated by comparing the export price of a product to the EU with the domestic prices or costs of the product in the exporting country. However, World Trade Organization rules allow investigating authorities to apply special treatment for certain countries where market conditions do not prevail.

Domestic prices and costs in non-market economies are not used as the basis to compare with export prices because they are considered unreliable because of state influence in the economy. Instead, investigating authorities use data from an analogue country as the basis for calculating dumping margins.

As a result of the many distortions in the Chinese economy, prices and costs do not reflect normal market forces. Therefore, under China’s Protocol of Accession to the WTO, the non-market economy methodology has so far been applied in anti-dumping proceedings concerning China. The EU legislation contains similar provisions, and as a result, in its anti-dumping investigations, the commission uses automatically, in all cases, prices or costs from an analogue country to calculate the level of dumping of Chinese products, unless the concerned Chinese producers are able to show that they individually qualify for market economy treatment. The EU had also autonomously put in place five criteria that, if fulfilled, would have allowed treating China as a market economy for the purpose of anti-dumping investigations before 2016. China does not meet all these criteria as of yet.

The online consultation, which will be open for ten weeks, invites stakeholders to give their opinion on the various options being considered by the Commission. This public consultation is part of an in-depth impact assessment that will include a careful study of the economic effects of any potential change broken down by member states, with a particular focus on jobs.

The decision to carry out an impact assessment concerning a possible change of the treatment of China in anti-dumping investigations is a result of a debate that took place in the College of Commissioners on January 13.

The College of Commissioners will return to the matter this summer.