The National Confederation of Industry (CNI) argues that China is not automatically recognized as a market economy. Upon entering the World Trade Organization (WTO) on December 11, 2001, the Asian country signed the Accession Protocol and committed itself to a series of changes in legislation, regulations, standards and administrative measures that influenced and distorted trade in goods. Goods and services, such as exchange control. At that time, it was established that China would have 15 years to conform to multilateral rules, only then would the transition from non-market economy to a market economy occur.

"For the Brazilian industry, China is not a market economy. There are still sectors where product prices are kept artificially low due to state intervention in the economy, "explains CNI Industrial Development Director Carlos Abijaodi.

ANTIDUMPING - In practice, the discussion is on the calculation of anti-dumping measures. To avoid dumping, which is unfair competition, when companies export at a lower price than they charge in their domestic market, countries are entitled to apply a rate to the value of the product. Evidence of the practice of dumping in Chinese exports is based on prices of other countries that practice "normal value of the commodity" and are market economies.

CNI argues that in order to neutralize the damages to the domestic industry caused by imports from the Asian country, Brazil uses an alternative method of calculating nominal value and continues to disregard China's prices and costs in antidupimg investigations.

"The best interpretation is that there should be a procedural change only in anti-dumping measures: the reversal of the burden of proof with regard to the demonstration of the absence of market economy conditions in China," says Carlos Abijaodi.

REVERSAL OF PROOF - With the reversal of the burden of proof, as the CNI argues, the Brazilian industry should be prepared to defend the position that market economy conditions do not prevail in China. This can be done at the time of requesting the initiation of an anti-dumping investigation or during the proceeding.

The European Union has used other market references, rather than production costs, in particular situations where production costs are artificially low due to some state intervention in the economy.