May 15, 2018 / 1:33 PM / 6 months ago

China accuses EU of taking WTO back to 'law of jungle'

GENEVA (Reuters) - China accused the European Union on Tuesday of risking a return to the “law of the jungle”, telling a dispute hearing at the World Trade Organization that it was astonished by what it called the EU’s disregard for the WTO’s rulebook.

China’s made its allegation during a dispute which some trade lawyers see as the most divisive piece of litigation in the WTO’s 28-year-history, pitting China’s claim to be treated as a market economy versus EU and U.S. claims that it does not deserve such treatment since it does not trade fairly.

China told the confidential dispute hearing that it placed extraordinary emphasis on the case, which was of critical importance — legally, economically and politically.

Its case against the EU, and a parallel dispute against the United States, is based on a promise enshrined in China’s 2001 WTO membership agreement: that after 15 years Beijing would be granted “market economy” status.

“The EU’s effort to rescind the promises it made, and the legal obligations it undertook, makes one wonder, is it a real role model for the rule of law, or does it disavow its obligations when politically expedient?,” China’s representative asked.

“It also makes one wonder, is the WTO really a rules-based organisation, or just a club where powerful traditional Members can bend the rules?”

The dispute centres on the use of anti-dumping tariffs, which are used to punish foreign goods being sold at unfairly cheap prices.

China said it was astonished by the blunt manner in which the EU was trying to revive their discriminatory use, considering that the agreement was “recorded in black and white”.

“Besides enjoying no basis whatsoever in the treaty, the EU’s argument would open a Pandora’s Box,” China said.

“The multilateral anti-dumping disciplines that have been gradually formed and strengthened over many decades will be shattered in one single dispute. The world trading environment will return to the law of the jungle.”

Although the EU might single out China for using regulatory action that “distorts” its market, all governments tried to influence economic activity, China’s statement said.

“What, after all, is the purpose and function of the EU’s own common agricultural policy, if not to influence – some would say distort – markets? Similarly, the U.S. government provides substantial subsidies to the production of corn, influencing the production of downstream food products, including poultry and beef, is this not also government ‘distortion’?”

The EU did not immediately make available its arguments in the hearing.

Reporting by Tom Miles, Editing by Gareth Jones, William Maclean

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