{"id":33464,"date":"2018-10-30T12:30:09","date_gmt":"2018-10-30T07:00:09","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=33464"},"modified":"2018-10-30T12:30:09","modified_gmt":"2018-10-30T07:00:09","slug":"fight-for-market-economy-status","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/fight-for-market-economy-status\/","title":{"rendered":"Fight for market economy status\u00a0"},"content":{"rendered":"<p><a href=\"http:\/\/www.thehindu.com\/opinion\/op-ed\/fight-for-market-economy-status\/article21268467.ece\"><strong>Fight for market economy status<\/strong><\/a><strong>\u00a0<\/strong><\/p>\n<p><strong>Context<\/strong><\/p>\n<p>The U.S. protested at the World Trade Organisation against China\u2019s bid for recognition as a market economy. Its opposition is a counter to China\u2019s 2016 legal challenge against the U.S. and the European Union, both of which refuse to accord China\u00a0the coveted status it wants<\/p>\n<p><strong>Market Economy<\/strong><\/p>\n<ul>\n<li>A market economy is a system where the laws of\u00a0supply\u00a0and\u00a0demand\u00a0direct the\u00a0production of goods and services. Supply includes\u00a0natural resources, capital, and labor. Demand includes purchases by consumers, businesses and the government.<\/li>\n<li>Businesses sell their wares at the highest price consumers will pay. At the same time, shoppers look for the lowest prices for the goods and services they want.<\/li>\n<li>Workers bid their services at the highest possible wages that their skills allow. Employers seek to get the best employees at the lowest possible price.<\/li>\n<li>Capitalism\u00a0requires a market economy to set prices and distribute goods and services<\/li>\n<\/ul>\n<p><strong>View of US<\/strong><\/p>\n<ul>\n<li>The use of state subsidies in China distorts market prices<\/li>\n<li>Also the U.S. Commerce Department is conducting separate investigations into the dumping of aluminium foil by China.<\/li>\n<li>Were China to be granted the coveted position, it would be hard for the U.S. to defend its anti-dumping rulings against Chinese firms at the world body.<\/li>\n<\/ul>\n<p><strong>Prices determined by open competition<\/strong><\/p>\n<p>Central to China\u2019s quest is the acknowledgement from trading partners that domestic prices are determined by open competition rather than by the government<\/p>\n<p><strong>Effect: Helping China counter unfair dumping<\/strong><\/p>\n<p>This will help China counter attacks of unfair dumping<\/p>\n<p><strong>China as a non-market economy<\/strong><\/p>\n<p>Conversely, as long as major trading powers treat China as a non-market economy, they would insist on ascertaining the value of goods with reference to prices in a third country to ensure that domestic firms did not gain an unfair trade advantage<\/p>\n<p><strong>WTO Rules<\/strong><\/p>\n<p>The protocol to China\u2019s 2001 WTO entry has been a subject of controversy<\/p>\n<ul>\n<li><strong>Automatic upgradation of China as a market economy: <\/strong>Beijing insists that under Section 15 of the Protocol of Accession, the country\u2019s upgrade as a market economy was automatic on the completion of 15 years of its WTO membership in 2016<\/li>\n<li><strong>Endorsed by several Nations: <\/strong>Several nations have endorsed China\u2019s position in return for bilateral cooperation in trade and investments in infrastructure projects<\/li>\n<li><strong>View of the WTO: <\/strong>In support of that contention is a WTO appellate body\u2019s 2011 ruling that the protocol to Beijing\u2019s accession did not provide for the country to be treated differently by other member states for an indefinite period.<\/li>\n<\/ul>\n<p><strong>An Alternative Interpretation<\/strong><\/p>\n<p>The alternative interpretation draws upon sub-clauses of Section 15, which stipulates conditions when importers may rely on Chinese prices, or take recourse to a different methodology to impose anti-dumping tariffs<\/p>\n<p><strong>Onus on Chinese firms<\/strong><\/p>\n<ul>\n<li>Section 15(1)(i) places the onus on Chinese firms to prove that they were operating under conditions of a competitive market economy in the manufacture and sale of relevant products<\/li>\n<li>If they fail to do so, the Section provides that importing states would be entitled to invoke rules applicable to a non-market economy while probing firms for dumping.<\/li>\n<li>Now, a subsequent provision stipulates a 2016 date of expiry for recourse to the alternative methodology of determining prices.<\/li>\n<li>Another clause allows for the status of market economy to be decided for specific industry sectors, rather than the entire economy<\/li>\n<\/ul>\n<p><strong>Conclusion<\/strong><\/p>\n<p>Western resistance to accord China the necessary recognition is rooted in concerns over a glut of Chinese imports flooding domestic markets and causing job losses in the manufacturing sector. But the Trump administration\u2019s attempts to undermine the WTO\u2019s dispute resolution mechanism could further delay an outcome in the appellate body\u2019s process of disposing of cases.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Fight for market economy status\u00a0 Context The U.S. protested at the World Trade Organisation against China\u2019s bid for recognition as a market economy. Its opposition is a counter to China\u2019s 2016 legal challenge against the U.S. and the European Union, both of which refuse to accord China\u00a0the coveted status it wants Market Economy A market&hellip; <a class=\"more-link\" href=\"https:\/\/forumias.com\/blog\/fight-for-market-economy-status\/\">Continue reading <span class=\"screen-reader-text\">Fight for market economy status\u00a0<\/span><\/a><\/p>\n","protected":false},"author":61,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[555],"tags":[],"class_list":["post-33464","post","type-post","status-publish","format-standard","hentry","category-test-1","entry"],"jetpack_featured_media_url":"","views":{"total":0,"cached_at":"","cached_date":1704738499},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/33464","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/61"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=33464"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/33464\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=33464"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=33464"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=33464"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}