US, China clash over WTO market economy status

The United States warned China on Thursday that it had not done enough to qualify for market economy status, especially in steel and aluminum, Reuters reports. Upon China’s admission to the WTO in 2001, it was told by other members that they would not use its published, state-controlled prices to judge whether or not it was “dumping” exports unfairly in their markets, but rather “surrogate” prices reflecting what it should be charging without state subsidies. That was written into its WTO membership agreement in a clause that would expire after 15 years, on Dec. 11, 2016. If the United States, European Union, and other WTO members begin to take Chinese export prices at face value, it will be much harder for them to challenge China’s cheap exports.