Brussels, 28 June 2004
What is “market economy status” in trade defence investigations?
This is an issue which ONLY concerns tradedefence investigations. In trade defence
investigations (anti-dumping and anti-subsidy) the authorities have to use prices and
costs reported by the companies concerned to calculate whetherdumping/subsidies
are taking place. In the case of market economy countries, the prices and costs used
are those reported by the individual companies. In case of economies in transition
(such as China), itis presumed that prices and costs are influenced by States
interference and therefore the investigating authorities use the prices and costs of
companies in a market economy third country.
However,in late 1998 the EU adapted its trade defence rules to allow individual
companies to claim market economy status if they could prove that their prices and
costs are not influenced by the state. Outof the 111 individual requests received
since 1999, only 28 have been found to be acceptable.
Today, a total of 10 countries (China, Ukraine, Kazakhstan, Vietnam, Albania,
Armenia, Georgia,Kyrgyzstan, Moldova and Mongolia) are considered economies in
transition for the purpose of trade defence investigations
In 2003, only 0,5% of Chinese exports of goods to the Community were subject toanti-dumping measures.
The possibility to treat China as an economy in transition in trade defence
investigations for up to 15 years was agreed and enshrined in the Chinese WTO
accession protocolsigned in 2001. Therefore there is a clear and mutually agreed
legal framework to deal with this matter while the request is being examined.
MES does not have an impact on the number ofanti-dumping/anti-subsidised cases;
it is simply a method to calculate AD duties.
New Zealand, Singapore and Malaysia have granted MES to China. The number of
AD cases opened by these countries against China in...