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US keeps pressure on China by opposing 'market economy' designation at WTO

The U.S. told the World Trade Organization that China should not be considered a "market economy" in the latest bid by the Trump administration to keep pressure on the world's second-biggest economy.

The Office of the U.S. Trade Representative on Nov. 30 made public its filing with the WTO arguing that because Beijing still largely controls the nation's economy, the U.S. had a right to make its own anti-dumping decisions.

The filing was made in a case that China brought against the EU in December 2016. In that case, China claimed it automatically should be deemed on par with other market economies, instead of being considered state-controlled, according to the terms of its agreement under which it joined the WTO in 2001. China brought a similar case against the U.S., but that matter has not gone forward.

If the WTO decides to consider China a market economy, it would be harder for the U.S. to argue that its goods and services are not subject to the same market forces as other WTO countries.

The gist of the U.S. position is that China is seeking a special deal by arguing that the passage of 15 years entitled it to market economy status without showing that the government no longer controls the economy, said a senior U.S. official.

If anything, indications are that China is reversing moves that it earlier undertook toward becoming a market economy, the official said.

The U.S. entry into China's case against the EU is the latest sign that the Trump administration is ramping up its campaign against Beijing's trade policies. The decision to make the WTO filing public came a few days after the U.S. Commerce Department self-initiated anti-dumping and countervailing duty investigations into China-produced common alloy aluminum sheet.

Cases where the agency initiates these investigations are rare, as the department itself noted. The last time it launched a countervailing case without a complaint from a domestic entity was in 1991, involving Canadian softwood lumber; the last self-initiated anti-dumping case was over Japanese semiconductors in 1985.