LexisNexis(TM) Academic - Document
LexisNexis(TM) Academic - Document
Copyright 2005 The Financial Times Limited
Financial Times (London, England)
July 6, 2005 Wednesday
London Edition 1
SECTION: LEADER; Pg. 20
LENGTH: 474 words
HEADLINE: Time to stop dumping on China: Trade protection harms its users as much as its targets
BODY:
The British government is to be commended for its proposal that the European Union reduce China's vulnerability to anti-dumping penalties by granting its long-standing demand for full market economy status. That would go some way to correct a flawed policy and help check rising EU protectionism, of which China is the principal target.
Anti-dumping measures, imposed on low-priced exports that allegedly harm producers in importing countries, are inherently dubious. Their economic rationale is shaky. They defy World Trade Organisation principles by allowing unilateral and selective trade discrimination. They rely on opaque methodology, making them open to unfair manipulation, and disciplines on their abuse are weak.
The dice are loaded even more heavily against China and other countries that do not qualify as market economies. Trade partners need not even establish Chinese exporters' costs in order to find them guilty of dumping. Instead, they may simply use estimates based on the costs of exporters elsewhere. Such calculations are inevitably subjective and imprecise.
The definition of what constitutes a market economy is elastic and varies between countries. Furthermore, though the state continues to play an important role in the Chinese economy, its connection, if any, with individual exporters' prices is far from clear.
About half of China's exports are by companies that are partly or wholly owned by foreign investors, almost all from market economies, and a growing share is by privately-owned Chinese businesses. Yet anti-dumping policy in the US, the EU and other countries lumps them all together, only occasionally conceding that the odd Chinese exporter merits treatment on market economy criteria.
Stranger still, both the EU and US have granted market economy status to Russia, which is not a WTO member and is retreating into economic authoritarianism. Yet they are not required until 2015 to extend the same treatment to China, which has rapidly opened its market to import competition since it joined the WTO and is moving to reform and liberalise further.
Such inconsistencies, and arbitrary application of anti-dumping measures, undermine the credibility of US and EU strictures on China's trade conduct and encourage Beijing to follow their bad example. Worse still, anti-dumping excesses damage the American and European economies by choking off or penalising cheap inputs and retarding healthy structural adjustment.
The most persistent western anti-dumping petitioners are producers of low-margin commodity products: in other words, industries with little future in advanced economies. Keeping them in business artificially distorts markets, misallocates resources and raises costs to consumers. The strongest argument for restraint on anti-dumping is that the greatest beneficiaries would be its biggest users.
LOAD-DATE: July 5, 2005
Copyright 2005 The Financial Times Limited
Financial Times (London, England)
July 6, 2005 Wednesday
London Edition 1
SECTION: LEADER; Pg. 20
LENGTH: 474 words
HEADLINE: Time to stop dumping on China: Trade protection harms its users as much as its targets
BODY:
The British government is to be commended for its proposal that the European Union reduce China's vulnerability to anti-dumping penalties by granting its long-standing demand for full market economy status. That would go some way to correct a flawed policy and help check rising EU protectionism, of which China is the principal target.
Anti-dumping measures, imposed on low-priced exports that allegedly harm producers in importing countries, are inherently dubious. Their economic rationale is shaky. They defy World Trade Organisation principles by allowing unilateral and selective trade discrimination. They rely on opaque methodology, making them open to unfair manipulation, and disciplines on their abuse are weak.
The dice are loaded even more heavily against China and other countries that do not qualify as market economies. Trade partners need not even establish Chinese exporters' costs in order to find them guilty of dumping. Instead, they may simply use estimates based on the costs of exporters elsewhere. Such calculations are inevitably subjective and imprecise.
The definition of what constitutes a market economy is elastic and varies between countries. Furthermore, though the state continues to play an important role in the Chinese economy, its connection, if any, with individual exporters' prices is far from clear.
About half of China's exports are by companies that are partly or wholly owned by foreign investors, almost all from market economies, and a growing share is by privately-owned Chinese businesses. Yet anti-dumping policy in the US, the EU and other countries lumps them all together, only occasionally conceding that the odd Chinese exporter merits treatment on market economy criteria.
Stranger still, both the EU and US have granted market economy status to Russia, which is not a WTO member and is retreating into economic authoritarianism. Yet they are not required until 2015 to extend the same treatment to China, which has rapidly opened its market to import competition since it joined the WTO and is moving to reform and liberalise further.
Such inconsistencies, and arbitrary application of anti-dumping measures, undermine the credibility of US and EU strictures on China's trade conduct and encourage Beijing to follow their bad example. Worse still, anti-dumping excesses damage the American and European economies by choking off or penalising cheap inputs and retarding healthy structural adjustment.
The most persistent western anti-dumping petitioners are producers of low-margin commodity products: in other words, industries with little future in advanced economies. Keeping them in business artificially distorts markets, misallocates resources and raises costs to consumers. The strongest argument for restraint on anti-dumping is that the greatest beneficiaries would be its biggest users.
LOAD-DATE: July 5, 2005
posted by Eastlaw at 6:52 AM
0 Comments:
Post a Comment
<< Home