Market Economy Status
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Market Economy Status (MES)
In fact, the Market Economy Status (MES) is critical in anti-dumping proceedings. Such proceedings in fact vary from country to country. Generally speaking, to substantiate a dumping charge a country should calculate the dumping margins of the alleged dumping country. If the alleged dumping country has not been considered as having MES (in other words, in that country the State still has significant influence on individual companies), it would be difficult to calculate the fair prices and costs of the alleged country because they may have been distorted. Under the circumstances, an analogue country approach (or ÐЎЧsurrogate countryÐÐŽÐÐ as adopted by some countries, say the US and Australia) is adopted.
In brief, a ÐЎЧsurrogate countryÐÐŽÐÐ is a market-oriented country at approximately the same level of economic development as the alleged dumping nonmarket. Based on the cost and price of this ÐЎЧsurrogate countryÐÐŽÐÐ, a single dumping margin is calculated for the whole importing country. You may notice that market situation in different industries vary. A single dumping margin of course will not favour the alleged dumping country.
If MES is granted by a country to say China, then the calculation of dumping margins, costs and prices will be taken from the Chinese producers or the Chinese market. Apparently the actual situation can be more accurately reflected as compared with the surrogate country approach. That is the reason why MES is so important.
As China has not been granted market economy status by the European economic bloc, enterprises involved in dumping investigations have to win market economy treatment separately.