Old Wine in a New Bottle: The EU's Response to the Expiry of Section 15(a)(ii) of China's WTO Protocol of Accession

Abstract

Following the expiry, on 11 December 2016, of the second paragraph of section 15(a) of China’s Protocol of Accession to the WTO, importing WTO Members no longer find a legal basis in section 15 for using so-called non-market economy (NME) methodologies for determining the normal value of Chinese imports. Hence, investigating authorities must now rely exclusively on the provisions of the Anti-Dumping Agreement (ADA) when investigating imports from China. In December 2017, the European Union amended its basic Anti-Dumping Regulation in view of the expiry of section 15(a)(ii). Following the entry into force of the recently adopted amendments, the Regulation no longer explicitly discriminates between WTO Members by mandating NME treatment for certain countries, among which China. However, it still requires the European Commission to employ an NME-like methodology with regard to imports from any WTO Member, where it determined that it would not be ‘appropriate to use domestic prices and costs in the exporting country due to the existence in that country of significant distortions’. This article analyzes the compatibility of the new methodology with the provisions of the ADA in light of the reports of the Appellate Body and of the Panel in EU – Biodiesel. It is submitted that even though the recent amendments could possibly shield the Regulation from an ‘as such’ claim of WTO-inconsistency, the use of the new methodology is unlikely to be allowed by the ADA.