Market Economy?

By Isaac Cohen*

The fifteenth anniversary of China’s accession to the World Trade Organization (WTO) was on December 11, 2016. According to the instrument of accession, those fifteen years had to elapse before China could be recognized as a “market economy.” However, the European Union and the United States have not yet granted China such recognition. Therefore, China has invoked the dispute settlement procedure, at the WTO, to review the European Union’s refusal to recognize it as a market economy. The United States has filed a brief as a third party supporting the European Union’s position and Japan has declared it supports them.

This dispute between the major world economies is another evidence of the turn toward economic nationalism which is emerging in several fronts of the world economy, such as the British withdrawal from the European Union, or the United States withdrawal from the TransPacific Partnership.

For a long time, trade relations between China and the United Sates have been marked by irritants, such as the complaint against alleged manipulation of China’s currency. However, the protectionist winds emanating now from the White House, which perceive the trade balance as indicator of success or failure, have led to specific confrontations over China’s production and exports of steel and aluminum, as threats to US security, or complaints about unfair pricing of solar panels. In the case of aluminum, the Secretary of Commerce Wilbur Ross announced the investigation of China’s trade practices without receiving a specific complaint from domestic producers. Precisely, this sort of dispute about specific products, is where it makes a difference if China is classified as a market economy. Because before it receives such classification, a Transitional Safeguard Mechanism can be applied against Chinese imports that cause or threaten to cause market disruption.

*International analyst and consultant. Commentator on economic and financial issues for CNN en Español TV and radio, UNIVISION, TELEMUNDO and other media. Former Director, UNECLAC Washington.

About Ramón Jiménez

Ramón Jiménez, actual Managing Editor de MetroLatinoUSA. Periodista que cubre eventos de las comunidades latinas en Washington D.C., Maryland y Virginia. Graduado de la Escuela de Periodismo de la Universidad del Distrito de Columbia. Galardonado en numerosas ocasiones por parte de la Asociación Nacional de Publicaciones Hispanas (NAHP) y otras organizaciones comunitarias y deportivas de la región metropolitana de esta capital. También premiado en dos ocasiones como Mejor Periodista del Año por la cobertura de la comunidad salvadoreña; premios otorgados por la Oficina de Asuntos Latinos del Alcalde de Washington (OLA) y otras organizaciones. Ha sido miembro del jurado calificador en diferentes concursos literarios, de belleza y talento en la región metropolitana. Ha visitado zonas de desastre en Nicaragua, Honduras y El Salvador e invitado a esos países por organizaciones que asisten a personas de escasos recursos económicos. Antes trabajó en otros medios de prensa de Virginia y Washington, D.C., incluyendo reportajes para una agencia noticiosa mundial.

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