China loses WTO dispute against EU for market economy status, subsidized aluminium supply strikes back

In a spectacular development, China has lost a dispute to the European Union at the World Trade Organization (WTO) for a market economy status, as the former allowed the dispute to lapse.

The development occurs after four years of battle for the market-economy status by China. The designation would have put the country in a stronger position in respect of its commercial and trade partners.

The WTO Secretariat said China allowed the dispute to lapse. “At the request of China, the panel suspended its work on 14^th June 2019 (WT/DS516/13). Since the panel has not been requested to resume its work, according to Article 12.12 of the DSU, the authority for the establishment of the panel lapsed as of 15^th June 2020.”

As per the European Union, China subsidises its industries to a great extent, particularly aluminium, making their sales prices in the international market unfair.

Following the latest development, to protect their industries, the EU and the United States will be able to apply high anti-dumping tariffs on goods from China.

India has also faced similar issues in terms of “dumping” of low-cost products by China. India has imposed anti-dumping duties on multiple occasions on various items.

Further, amid the ongoing border tussle, India may impose higher tariffs on products that are mostly imported from China.