EU's Junker calls member states to deliver on WTO obligations
BRUSSELS, Oct. 21 (Xinhua) — European Commission President Jean-Claude Juncker on Friday said the member states of the European Union (EU) need to obey the rules of the World Trade Organization (WTO) and to strengthen the bloc’s trade defense instruments.
The EU member states “have to” comply with Article 15 of the Protocol on the Accession of China to the World Trade Organization (WTO), Juncker told a press conference after a two-day EU summit.
WTO obligations require the EU to end the practice of “surrogate country system” by Dec. 11, 2016, under which costs of production in a third country are used to calculate the value of products from non-market economies.
Despite the time running out, the leaders of EU countries didn’t reach an agreement on EU’s formal stance on the issue during the second day’s discussion of the summit.
There are voices in Europe, however, that China has yet to meet the standard set by the EU for market economy status, and that the EU should continue with its use of a non-standard approach in anti-dumping investigations against China.
Saying he is strongly against “stupid” protectionism, Juncker insisted that the single market should be opened without any kind of reversion.
“We have to act properly, not aggressively, on the threats coming from the outside,” he stressed.
However, Juncker said that China would not be blindly given market economy status from the EU. He called the member states to support the EU’s efforts to updated, strengthened its trade defense instruments.
The European Commission outlined its proposal of a new method for calculating dumping ahead of the summit.
The new method will not grant the “market economy status” to any country but ensure that the EU’s trade defense instruments are “adapted to face the new challenges and legal and economic realities, while maintaining an equivalent level of protection.”
Meanwhile, the EU executive body intended to propose a further strengthening of the EU anti-subsidy legislation, so that in future cases, any new subsidies revealed in the course of an investigation can also be investigated and included in the final duties imposed.
“Heads of states of government should in their wisdom follow the commissions proposals in this area — some did so only half heartedly — it has been clearly shown the U.S. asked for 100 percent more in terms of customer duty than we do in the EU,” he said, noting that the EU’s average customer duty is 21.1 percent while the American’s is 266 percent.
However, the EU member states have to this date not been able to find an agreement on the proposals, notably because of the renouncement of the “Lesser Duty Rule”, which caps the levels of anti-dumping duties.
Supporters of this model argue that ultra-high duties actually harm European manufacturers higher up the value chain, who benefit from cheaper imports.
China has reiterated its calls recently for the EU to fulfill its WTO obligation and stop its unfair treatment of China. Currently, the EU is China’s biggest trading partner, while China is the EU’s second largest trading partner after the United States.