Chinese Trade Remedy Fight Threatens WTO Fisheries Accord

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By Bryce Baschuk

China unnerved World Trade Organization members this month when it threatened to sink prospects for a multilateral fisheries agreement ahead of the WTO’s 11th ministerial conference in December.

China said WTO members should consider “balanced results” in the separate efforts to reform WTO trade remedy rules and forge an accord to curb harmful fisheries subsidies, according to a paper that circulated April 14.

The six-page paper did not explicitly link fisheries negotiations to the WTO’s atrophied trade remedy talks, but China said both issues should be considered under the architecture of the WTO’s negotiating committee on rules.

Forging new trade remedy disciplines is a non-starter for the U.S., which is increasingly hardening its trade defenses against Chinese policies that have depressed global prices for foreign steel and aluminum.

Five-Pronged Proposal

China said reforming antidumping and countervailing duty rules are “more important now than ever” because AD and CVD measures are “misused,” “overused” and have led to increased trade disputes at the WTO.

The “distortionary effects” that such measures have had on international trade is no longer an “exceptional phenomenon,” the paper said.

China’s proposal specifically targeted the following five “do-able”goals as a starting point for negotiations:

  •  enhancing transparency and strengthening due process;
  •  preventing AD measures from becoming “permanent”;
  •  preventing AD measures from “overreaching”;
  •  special consideration and treatment of SMEs; and
  •  transplanting similar provisions from ADA to ASCM.

‘Doable Goals.’

China urged members to forge new transparency provisions aimed at improving disclosure of subsidies and domestic pricing data.

The U.S. has long criticized China’s failure to accurately and completely report the extent of its domestic subsidies for products like steel and agriculture.

China said trade remedy measures should not become permanent, “overly prolonged” or “perpetualized” and that members should not impose any definitive antidumping measures for more than 10 years.

China also urged members to refrain from launching new anti-circumvention investigations — which the U.S. has increasingly deployed to counter attempts by China to ship its steel products to countries like Vietnam for minor finishing operations.

Finally, the Chinese paper sought assistance and latitude for small and medium-sized enterprises and greater harmonization between the WTO’s Antidumping and Subsidies and Countervailing Measures Agreements.

America First

China’s push for trade remedy reforms come at a time when President Donald Trump is looking to sharpen, rather than blunt, America’s arsenal of trade weapons against Beijing.

For years, China has been the WTO’s most frequent target for anti-dumping duties—which are retaliatory tariffs that its trading partners have used to counter Beijing’s flood of cheap exports.

In 2016 alone, WTO members imposed antidumping duties on $6.8 billion worth of Chinese steel exports, according to the Chinese Ministry of Commerce.

The trend is set to accelerate in the coming years after the Trump administration announced it would pursue new trade defense investigations according to Section 301 of the 1974 Trade Act and Section 232 of the 1962 Trade Expansion Act.

To contact the reporter on this story: Bryce Baschuk in Geneva at correspondents@bna.com

To contact the editor responsible for this story: Jerome Ashton at jashton@bna.com

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