During a bilateral meeting in Istanbul, China’s vice-minister of Commerce, Mr Wang Shouwen, urged the Brazilian government to reckon its market-economy status. According to the Chinese minister, if Brazil does not recognize it by 11 December 2016, it will launch a panel at the WTO against Brazil,as well as against all other countries that take the same position.

In 2004, when the former Brazilian President Lula visited China, he accepted to reckon China`s market economy status, but, in practice, Brazil never implemented this measure. This allows Brazil (and countries importing Chinese goods) to adjust or disregard Chinese prices and costs when determining whether the imported goods are being dumped onto their markets. Countries take into consideration the non-comparability of costs and prices when the exporting country is not a market economy or where the exporting economy is distorted in some way.

China therefore has a strong interest in arguing that it is a market economy. It argues that in 2016 (having completed 15 years from signing the WTO Assessment Protocol) it is automatically entitled to market-economy status on the basis of the protocol and will launch WTO actions if countries do not respect the protocol.

The Brazilian Vice-Minister of Commerce, Fernando de Magalhaes Furlan, replied that Chinese business sector should contact the Brazilian industrial side and convince them that China is in fact a market economy.