EUROPEAN Union policymakers are poised to kick off deliberations to determine whether EU industries ranging from steel to solar can keep relying on import tariffs to fend off aggressive Chinese competitors, the opening salvo in a political and economic battle due to last all year.

    The European Commission, the EU’s executive arm, will hold an initial debate Wednesday about whether the bloc should recognize China as a market economy starting in December. Such a step would make it more difficult for European manufacturers such as ArcelorMittal and Solarworld AG to win sufficiently high EU duties meant to counter alleged below-cost — or “dumped” — imports from China.

    The talks will pit free trade governments in northern Europe against more protectionist ones in the south, put Europe on a possible track that the United States is staying off and produce a political verdict on whether China has come of age economically 15 years after it joined the World Trade Organization. Market economy status would be a business boost for China, whose growth has slumped to the weakest since 1990 and which suffered a 10 percent fall in stocks last week.

    “This is one of the hottest issues on the agenda,” said Jo Leinen, a German member of the European Parliament who chairs its delegation for relations with China. “It’s a hot potato. The Chinese are pushing for market economy status and interests are divided in Europe.”

    The matter combines top-level political calculations with tricky economic and legal considerations. With the EU struggling to bolster economic growth and keep Greece in the euro area, leaders across Europe have courted China for investment in infrastructure and orders of goods such as Airbus Group SE planes.

    While it’s the EU’s No. 2 trade partner behind the United States, China is grouped with the likes of Belarus, Kazakhstan and Mongolia in seeking market economy designation by Europe and faces more European anti-dumping duties than any other country. The import levies cover billions of euros of Chinese exports such as stainless steel, solar panels, aluminum foil, bicycles, screws, paper, kitchenware and office-file fasteners, curbing competition for producers across the 28-nation EU.

    Market economy status for China would signal more European trust in China by ensuring the EU uses Chinese data for trade investigations affecting the country. The bloc currently uses other nations’ figures to calculate anti-dumping levies against China on the grounds that Chinese State intervention artificially lowers domestic prices and makes them an unreliable indicator of a good’s “normal value.” This practice results in higher EU duty rates against Chinese exporters and — by extension — more protection for European manufacturers.

    Under the agreement that led China to join the WTO in 2001, WTO members pledged to scrap in December 2016 a shortcut for applying a non-market economy standard in calculating anti-dumping duties on China. At the same time, this development won’t grant China blanket status as a market economy.

    China argues that the terms of its WTO accession require recognition of the country as a market economy in dumping cases beginning in December. The U.S. Government disagrees and isn’t planning a policy change, risking a Chinese complaint to the global trade arbiter.

    In Europe, it falls to the commission to decide whether to propose market economy status for China. Europe’s national governments and the EU Parliament would have to approve any changes to the bloc’s treatment of China in dumping cases.

    EU trade chief Cecilia Malmstroem, in charge of steering the matter through the commission, has signaled openness to recognizing China as a market economy while saying the consequences of such a step for European industries need to be assessed.

    (SD-Agencies)