The WTO is about to welcome an "non-market economy" into its ranks

The article on The Economist (4th November) begins with the joining of Ukraine at the beginning of this year into the WTO. "That might surprise many Ukranians, who were under the impression they had been living with free enterprise since prices were deregulated in 1991."

The WTO is built on the principle that members will treat each other alike. But as one price of entry Vietnam agreed to remain on a list of so-called "non-market economies", alongside China and several other WTO members (Soviet members). This stigma has one practical consequence. It makes it harder for Vietnam to defend itself against the charge of dumping. Into a non-market economy, America's Department of Commerce argues, prices are not set by supply and demand so they cannot be trusted, Instead, it comes up with is own calculation of "normal value" based on costs in other "surrogate" countries.

America is Vietnam's biggest market and one of the more prolific users of anti-dumping duties. But it is not the only place to brand its trading partners as unmarket-like. Last month, the EU confirmed that Vietnam was dumping leather shoes, based on what it costs Brazil to make them. Last year it was imposed duties on Vietnamese bicycles, after comparing them with the costs in Mexico.
The most notorious case remains, however, Vietnam catfish or "basa" as they are now labelled. It reached the tax impose of 37-64% after calculating what Vietnam's fillets would cost if they were reared on a fish farm in the region of Bangladesh, using water bought in India, transported by Bangladesh truckers, with the labour purchased in Vietnam.
What Vietnam must do to shake off the "non-market" label? The EU, the Americans and others each have their own requirements. America wants to see the removal of price-fixing and currency controls, even more foreign investment, free wage bargaining, and limited government ownership.
But "the economic logic is invariably something of a facade". The only criterion that really matters is that America's retailers, who like Vietnam's cheap merchandise, lobby harder than its garment-makers and catfish farmers who hate it. It is mostly those with something to fear from open markets who accuse other countries of falling short of them.