European Union has “very clearly concluded”, that the Market Economy Status (MES) proposal for China has to be re-considered from all important angles, “given the subject is important not only for international trade, but also for EU’s economy”.
According to the EC, the decision on whether or not to grant China the MES will come only after doing a detailed impact assessment of the situation in Europe. The decision is likely to come in the second half of this year.
Speaking at a press conference, European Commission Vice-President Frans Timmermans, said “We will come back to the issue later, it will be discussed…over the next few months.”
Winning a market economy status would allow China to promote its cheap exports in the world market at prices far below the domestic prices. This would in turn wreak havoc for the European Union’s domestic industries at large and the textiles and steel industries in particular.
The current rule gives EU the authority to charge dumping margins on Chinese products since China was not considered for a market economy in anti-dumping proceedings by the WTO. The clause will automatically expire in December 2016.
Europe’s heavy industries are opposed to the proposal, particularly steel and textile makers, who complain that unfair Chinese competition is forcing them to cut jobs in Europe, hence insist on maintaining status quo. This standpoint has been supported by the US and Canada. According to the Washington-based Economic Policy Institute (EPI), if China gets MES, there will be massive job losses in EU, and the economic output would be reduced nearly to 2 per cent a year.
The pertinent question arising out of the issue is why China is not getting the MES, despite the WTO regulations’ agreement that clearly stated that China would automatically gain a Market Economy Status in 2016.
