The European Parliament on Thursday by a large majority adopted a resolution asking the European Commission not to grant market economy status to China.

Some 546 MEPs voted for the resolution, with 28 against, with 77 abstentions.

MEPs are concerned that granting market economy status to China – which Beijing sees as a necessary condition following its accession treaty to the World Trade Organization 15 years ago – will further harm the already suffering European steel industry. If China is granted market economy status, they say it will become more difficult for the EU to impose anti-dumping measures.

“This vote sends a strong signal that the European Parliament will not accept any measures that weaken our ability to defend ourselves from unfair Chinese competition,” said lawmaker David Martin from the Socialists and Democrats, who pushed the resolution.

The adopted resolution “stresses that China is not a market economy” and that the country does not fulfill the EU’s criteria to be recognized as such. It also urges the Commission to coordinate with its G7 and G20 partners, and to oppose any unilateral granting of market economy status to China. 

While the vote has no direct legal impact, it sets red lines for the Commission, which has to decide before the summer break whether it approves China as a market economy, and which needs the Parliament’s approval for such a decision.

The Commission is carrying out its impact assessment and  is expected to publish its report on the matter before the summer recess.

The adopted resolution also calls upon the Council of Ministers to agree on the modernization of the EU’s trade defense instruments – including anti-dumping rules – which it says is needed to guarantee “a level playing field with China.” The subject has been blocked in the Council since 2014, but discussion has recently come back, and the Council is expected to discuss it in the Foreign Affairs Council on Friday.