Granting China market economy status (MES) would take away a big political friction in the relations between China and the EU, Fredrik Erixon, director of the Brussels-based European Center for International Political Economy (ECIPE) has said in an interview with Xinhua.
In a non-legislative resolution on May 12, the European Union (EU) lawmakers were opposed to recognizing China's MES as set out in global trade rules.
Erixon said those arguing that China should not be granted MES automatically either thinks the issue can be negotiated with China, that's to say MES can be granted in return for something, or that special anti-dumping protection is needed.
"I'd expect a call by the EU to maintain non-market economy status, or negotiate graduation to MES, would be met with strong resistance from China. Ultimately, the strategy would fail," he said.
European steel industry blamed its overproduction problem for China and has launched lobbying campaign aiming for not granting China MES.
Erixon said the steel overcapacity problems cannot be solved by trade policy and trade defense measures can make the overcapacity an even bigger problem and will distort markets even more.
"It (Granting China MES) does not mean the end of anti-dumping, it basically means the end of one particular practice in anti-dumping investigations. The EU will certainly continue raising anti-dumping levies on some Chinese exports to Europe," said the expert.
"But I think MES graduation would take away a big political friction in the relations between China and the EU," he added.
Erixon said the EU would be incompliant with WTO rules on anti-dumping if it continues to use practices allowed under China's WTO accession protocol and its classification of China as non-market economy.
Regarding the effect on trade activities between China and the EU if the latter grant China MES, the director said he doesn't think it would affect trade volumes much.
