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Possible #1 Joke of 2017: China Wins The Title of a ‘Free’ Market! January 2017 issue

Possible #1 Joke of 2017: China Wins The Title of a ‘Free’ Market!

An MES label would mean that other WTO members will need to treat China as a free market equal during trade disputes

Manish K. Pandey | The Dollar Business

On December 11, 2001, China joined the World Trade Organisation (WTO). It was a milestone for China’s then not-so-open economy and took the country 15 years of arduous and prolonged negotiations to officially become the 143rd member of WTO, from being just a contracting party to the General Agreement on Tariffs and Trade (GATT) since 1986.

When China joined the global apex trade body, it agreed to be treated as a non-market economy (NME) – a status that made it easier for trading partners to impose anti-dumping measures on China in case the latter violated global fair trade norms – for the next 15 years, basis an assurance that it would attain Market Economy Status (MES) at the end of the period and new rules would apply. Come December 11, 2016, and the Dragon’s dream of being a globally-recognised market economy remains unfulfilled! The reason is simple. Some of Beijing’s biggest trade allies remain reluctant to endow it with the coveted ME status.

While China argues that it has been committed to a market-oriented economy for the last 15 years and as such should now be treated fairly, the corridors of power at WTO reason that there is no clause in the agreement of accession that mentions an automatic grant of MES to China. But even if such a passage is not there, has Beijing not done enough to qualify for MES? Or, is it something else that’s stopping its three biggest trade partners – US, EU and Japan – from fulfilling the promise they made in 2001?

Not surprisingly, Beijing has ...

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