http://www.bjreview.com MARCH 12, 2020 BEIJING REVIEW 23
Copyedited by Rebeca Toledo
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the global economy, according to the notice,
including Argentina, Brazil, India, Indonesia and
South Africa.
Moreover, members that did not declare
themselves developing economies when join-
ing the WTO have also been removed from
the list, including Albania, Armenia, Georgia,
Kazakhstan, Kyrgyzstan, Moldova, Montenegro,
the Republic of North Macedonia and Ukraine.
Compared to the 1998 list, only 22 economies
remain, accounting for 52.4 percent.
To be clear, it is not that these excluded
economies have made great progress, but
rather that the USTR has changed its standards.
Since China joined the WTO in 2001, it has
always been excluded from the USTR list. So
that alone is not an indication that the U.S. has
dropped China’s designation as a developing
economy.
Cautions needed
Still, the worries that the U.S. wants to drop
the designation of China as a developing
economy are not wholly unfounded. As early
as July 2019, U.S. President Donald Trump
signed a memorandum on reforming the de-
veloping country status in the WTO, noting
that seven out of the 10 wealthiest econo-
mies in the world and three members of
both the G20 and the OECD claim this status.
In particular, it devoted three paragraphs to
China’s economic size and global impact.
To that end, Trump directed the USTR to
take action. Thus the revised list could be one
of the measures authorized by Trump. The
USTR said in the notice that the 1998 rule
omitted WTO members that in the past had
been or could have been considered non-
market economies not subject to the CVD law.
But since non-market economies may now be
subject to the CVD law, the list set forth in the
notice does not omit non-market economies,
laying the groundwork for follow-up action.
The impact of the new list has been con-
centrated in countervailing cases. Under WTO
agreements, subsidy is financial assistance
provided by a government or any government
agency within the territory of a member. It
stipulates that each member can levy coun-
tervailing duties only through investigations
initiated and conducted in accordance with
the provisions of the Agreement on Subsidies
and Countervailing Measures and the WTO
Agriculture Agreement.
In particular, the Agreement on Subsidies
and Countervailing Measures provides that
investigations should be terminated imme-
diately if the amount of subsidy is small, or
the actual or potential amount of the subsi-
dized imports and the damage is negligible.
Investigations should also be terminated
if subsidies are less than 1 percent of the
actual price, or if the amount imported from
the WTO member is less than 3 percent of
total imported goods. For developing econo-
mies, both criteria are correspondingly more
lenient and they can enjoy special and differ-
entiated treatment.In December 2006, the U.S. initiated a
countervailing duty investigation of coated
freesheet paper from China. Since then, trade
frictions between China and the U.S. have
increased. The abuse of anti-subsidy mea-
sures against Chinese products has affected
the international trade order. In May 2012,
China requested consultations with the U.S.
concerning the imposition of countervailing
measures on certain products from China.
Both the WTO panel and the Appellate
Body ruled that the U.S. measures violated
WTO rules, arguing that the U.S. failed to
explain how government intervention had re-
sulted in price distortion. A WTO report in July
2019 ruled that the U.S. had not fully complied
with the 2014 WTO ruling. The U.S. has never
given China special and differentiated treat-
ment, but used the prices of a third country
as its benchmark for calculating the subsidy,
which made its conclusion more unrealistic.
The China-U.S. trade is based on the
markets and industrial structures of the two
countries and its development is market-
driven. Although the revised USTR list won’t
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the resulting impact on market expectations
and rule-making process cannot be under-
estimated. The unilateral behavior embodied
in this modification will further affect other
countries’ confidence in U.S. compliance
with international rules and bring more neg-
ativity into the international economic and
trade order. QThe China General
Chamber of
Commerce-USA holds
its 15th anniversary and
Lunar New Year Gala
in New York City
on January 9XINHUAA workshop in a textile factory in Guyuan, Ningxia Hui Autonomous Region in northwest China, on June 21, 2019XINHUA