2017年-PIIE彼得森国际经济研究所_Should_the_United_States_Recognize_China_as_a_Market_Economy__12页_285kb

Summary of Policy Brief: Should the United States Recognize China as a Market Economy?

Core Content

This policy brief analyzes the implications of the United States recognizing China as a market economy (ME) under WTO rules, particularly in the context of trade policies such as antidumping duties (ADDs) and countervailing duties (CVDs). The brief explores the legal, economic, and political consequences of changing China's non-market economy (NME) status and the potential impact on US-China trade relations.

Main Issues

1. China's WTO Accession and NME Status

   • China joined the WTO in 2001 after extensive negotiations, with the understanding that it would eventually be treated as a market economy.
   • The US and other WTO members were expected to revoke China's NME status by December 2016, but this did not happen.
   • The legal basis for this status is found in Article 15(a)(ii) of China's accession protocol, which allows WTO members to treat China as an NME in antidumping investigations.

2. Implications of NME Status for US Trade Policy

   • The US currently treats China as an NME, which allows the Department of Commerce to use surrogate country data to calculate the "less than fair value" (LTFV) benchmark for antidumping duties.
   • This practice leads to higher antidumping duties on Chinese imports compared to those from market economies.
   • If China is reclassified as a market economy, the US would need to recalculate antidumping duties, which could reduce them, but CVDs would still apply in many cases, limiting the overall impact on import levels.

3. Economic Impact of Reclassification

   • A reclassification of China as a market economy would likely result in only a modest increase in US imports from China, due to the concurrent use of CVDs.
   • The brief highlights that the US has applied CVDs in over 75% of completed investigations involving Chinese imports since 2006, suggesting that the overall trade protection remains significant.

4. Potential for Retaliation by China

   • If the US does not change its NME status, China may file a formal WTO complaint and potentially win, leading to authorized retaliation through increased tariffs on US exports.
   • China may also engage in WTO-illegal retaliation, such as imposing antidumping duties on US exports, which could harm US export sectors like agriculture, manufacturing, and automobiles.

Key Information

• China's Exports to the US:

  • China's exports to the US reached approximately $500 billion in 2015, up from about $125 billion in 2001.
  • US antidumping duties affected about 7% of China's total exports to the US in 2015, totaling around $35 billion.

• Antidumping and Countervailing Duty Data (2015):

  • The average US antidumping duty on Chinese imports was 81.4%, significantly higher than the 54.3% average on imports from other countries.
  • CVDs applied to Chinese imports averaged 83.8%, with many cases involving both ADDs and CVDs simultaneously.

• Sectoral Variability in Trade Protection:

  • The metals sector had the highest share of US imports from China subject to antidumping duties (31%).
  • In contrast, sectors like textiles and electronics had lower antidumping protection, despite being major import categories.

• China's Retaliation Strategy:

  • China may retaliate through WTO-compliant or non-compliant measures, such as increasing tariffs or applying antidumping duties.
  • The brief notes that China has historically used antidumping duties against US exports, particularly in sectors like chemicals, steel, and automobiles.

Policy Recommendations

• Political Settlement:

  • The US and China should seek a political resolution to the NME issue to avoid economic and diplomatic tensions.
  • A change in NME status is unlikely to lead to a significant surge in Chinese imports due to the concurrent use of CVDs.

• Legal and Procedural Consistency:

  • The US should ensure that its antidumping procedures align with WTO rules to prevent potential legal challenges and retaliatory measures by China.

• Economic Consequences:

  • The US should carefully evaluate the economic impact of reclassifying China as a market economy, particularly on industries that rely on trade protection.
  • The brief suggests that the current NME status provides the US with a strategic advantage in trade policy, and its loss could have unintended consequences.

Conclusion

The decision to reclassify China as a market economy has significant implications for US trade policy and its relationship with China. While it may reduce the effectiveness of antidumping duties, the concurrent use of CVDs limits the overall impact on import levels. The US must weigh the economic costs of reclassification against the potential for trade disputes and retaliation, which could undermine the rules-based trading system and harm US export sectors.