AFS expresses concerns over talks with China on market economy status.

At a Joint Commission on Commerce and Trade (JCCT) meeting in April, China and the U.S. agreed to discuss China's desire to be treated as a market economy under U.S. trade law. Market economy status is important to China because exports from non-market economies (NMEs) are frequently slapped with higher antidumping duties than those from market economies.

With its acceptance into the World Trade Organization (WTO), China agreed that the burden of proof would be on its shoulders for demonstrating that it deserves a change in treatment from non-market to market economy status. AFS, as part of the Committee to Support U.S. Trade Laws (CSUSTL), filed a document with the U.S. Dept. of Commerce stating its concern that by the U.S. agreeing to discuss the change in China's designation, it has opened the door to negotiations and has shifted some of the burden of proof to U.S. companies.

Additionally, CSUSTL pointed out that the provision of the agreement to treat China as a NME for up to 15 years was vital to Congress approving China's WTO accession and the associated U.S. China bilateral agreement. With this new twist, there is some concern that the JCCT could turn the market economy status into a bargaining chip that the Bush Administration might exchange for minor changes in China's currency policy.