China’s WTO Non-Market Economy

The U.S. Department of Commerce has announced it will maintain China’s status as a non-market economy (NME) going forward. Although not directly involving Canada, this is a significant development of which responsible businessmen should be aware.

In its 200-plus-page memo, Commerce concluded that China is a NME country. It found that “the state’s role in the economy and its relationship with markets and the private sector results in fundamental distortions in China’s economy.”

 

The PRC Ministry of Commerce (MOC), in turn, views this as a violation of the both letter and, even more importantly, the spirit of China’s WTO accession protocol. Certainly, it is the clearest signal to-date that US President Trump is prepared to follow through on campaign threats about the U.S.-China trade relationship.