Commentary: EU should strictly fulfill WTO obligations, grant China MES on time

The European Union should rethink about its new "country-neutral" method and take a more free and convenient EU-China trade into consideration, as Chinese Premier Li Keqiang is on a central and eastern Europe tour to foster cooperation.

Besides visiting Latvia, Li is to attend a meeting with government heads of the 16 central and eastern European (CEE) countries, among which 11 are EU members, and to discuss trade and economic cooperation with them.

It's also expected that both parties are to discuss whether the EU would fulfill its WTO obligations to grant China market economy status (MES) by Dec. 11 this year. The deadline is just a month away.

China has been repeatedly calling on WTO members, including the EU, to end the surrogate country practice against China in anti-dumping cases after the deadline.

The Article 15 of the Protocol on China's accession to the WTO in 2001 has clearly dictated that China will automatically switch over to market economy status when the surrogate country approach expires in 15 years, which means, by that day, the legal foundation for treating China as a non-market economy is gone.

Facing the pressure of the expiry, however, the European Commission has decided to do the bait and switch trick and have it both ways after six months of mulling -- it proposed in July to abolish its "non-market economy" list, and set up a new "country-neutral" method to strengthen its trade defense instruments.

In the new methodology, the EC proposed to take "international prices" into account in its anti-dumping investigations, yet the WTO protocol has clearly regulated that after the expiry date, any future anti-dumping cases against China should make comparison with prices or costs in China.

The new method also speeds up the anti-dumping and anti-subsidy procedures, and imposes at least the same, or even higher duties in certain circumstances.

By doing so, Brussels is gearing up to the American approach toward Chinese imports, which allowed Washington to impose heavy duties on Chinese commodities.

Though the method hasn't been officially proposed to the European Council and Parliament yet, China is keeping a close eye on its development, while at the same time urges the EU to "neatly and cleanly fulfill its WTO obligations without any additional conditions by Dec. 11," said Chinese Assistant FM Liu Haixing.

The WTO protocols are the consensus reached between China and other WTO members during the accession negotiation. No signatary party should evade its obligations by trying to change the rules of game or playing it vague. Doing so would be a distortion of rules and deliberate misinterpretation of the WTO protocols.

During Li's visit, it's highly possible that he will negotiate China's MES issue with CEE countries, the most vibrant economies on the European continent.

As there are 11 EU members among the CEE countries, China expects them to prompt the EU to fulfill the obligations in due time.

China is the EU's second-biggest trading partner, with daily trade flows of over 1 billion euros (1.13 billion U.S. dollars).

Giving China MES will make China-EU trade ties, including the China-CEE relations, even stronger, as at such a difficult time, the world's two major economies need each other more than ever. Endi