Abstract: In December 2001, China joined the World Trade Organization (WTO) after 14 long years of arduous negotiations. One of the most debated issues during the accession negotiations was the treatment of China as a nonmarket economy — an economy where costs and prices are not dependent on market forces of demand and supply. This classifi cation has resulted in WTO Members resorting to a differential treatment of Chinese imports in antidumping investigations, especially with the use of the “surrogate country” — a third country which is at the same level of economic development — for the determination of Chinese home market cost or prices for comparison purposes. The use of this method against Chinese products stems from art.15(a)(ii) of China’s Accession Protocol to the WTO. While the second sentence of art.15(d) of China’s Accession Protocol prescribes an expiry date for the use of nonChinese costs and prices, there are enough indications at different places in art.15 to support the continued application of the surrogate country method. It is within this framework that this article evaluates the text and context of China’s Accession Protocol. It is argued that the expiry of art.15 subpara.(a)(ii) does not alter the scenario prevailing before 11 December 2016. At best, subpara. (a)(ii) is a mere tautological expression, whose expiry is inconsequential in the light of an indirect authorisation to use surrogate prices in subpara.(a)(i). The article argues that irreconcilable differences exist among the multiple strands of legal interpretation of art.15 and may require an adjudicative decision at the highest level, which could perhaps lay this controversy to rest.
Keywords: China; accession protocol; anti-dumping; non-market economies; surrogate method; normal value; price comparison; WTO
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