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2018 | OriginalPaper | Chapter

Double Remedy: Beyond the Non-market Economy Status

Author : Katarzyna Kaszubska

Published in: Non-market Economies in the Global Trading System

Publisher: Springer Singapore

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Abstract

The chapter traces the regulatory regime of the US and the EU for conducting parallel anti-dumping and anti-subsidy investigations against imports from non-market economies. It examines the problem of double remedy, its economic rationale and the impact of the WTO Appellate Body report in US—Anti-Dumping and Countervailing Duties on the practice of the investigating authorities. In particular, it assesses the relevance of double remedy issue following the expiry of the relevant provisions of China’s WTO Accession Protocol and the upcoming termination of Vietnam’s Accession Protocol. In the light of the US opposition to grant China market economy status and the EU’s new methodology for the calculation of the normal value which allows to disregard exporter’s domestic prices in the anti-dumping investigations, it concludes that double remedy problem is likely to remain relevant in future trade relations between China and its trading partners.

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previous chapter The Termination of the Grandfather Clause in China’s Accession Protocol and the Normal Value Construction After Fifteen Years of Accession

next chapter External Benchmark Choices in Anti-dumping and Countervailing Duty Proceedings: A Battle of ‘Proxies’?

Dukgeun Ahn & Jieun Lee, Countervailing Duty Against China: Opening a Pandora’s Box in the WTO System?, 14 J. Int’l Econ. L. 329, 330 (2011).

Id.

Renato Antonini & Eva Monard, The concurrent imposition of anti-dumping and countervailing measures on non-market economies: time for a clean sheet of (Chinese) paper approach?, 17 Int. Trade L. Rev. 87, 90 (2011). Dana Watts, Fair's Fair: Why Congress Should Amend US Anti-dumping and Countervailing Duty Laws to Prevent “Double Remedies”, 1(1) Trade L. & Dev. 145 (2009).

U.S. Department of Commerce, Final Negative Countervailing Duty Determination in Carbon Steel Wire Rod from Czechoslovakia, 49 US Fed. Reg. 89 19371 (U.S. Dep’t Com., May 7, 1984) (final determ.).

Georgetown Steel Co. v. United States, 801 F.2d. 1308 (Fed. Cir. 1986).

Ahn & Lee, supra note 1, at 336.

Thomas J. Prusa & Edwin Vermulst, United States – Definitive Anti-Dumping and Countervailing Duties on Certain Products from China: Passing the Buck on Pass-Through, 12 World Trade R. 197, 197 (2013).

Ross Denton, The Non-Market Economy Rules of the European Community’s Anti-Dumping and Countervailing Duties Legislation, 36 Intl. Comp. L. Q. 198 (1987).

Ahn & Lee, supra note 1, at 345–346. Joris Cornelis & Folkert Graafsma, The Appellate Body’s Findings and EU Practice: What if the Lesser Duty Rule does not Come to the Rescue, 1 Int. Trade L. Rev. 20, 20 (2012); Carrie Lei Cai, Double Remedies in Non-Market Economies, 14 J. World Inv. & Trade 147, 163 (2013).

Memorandum: Countervailing Duty Investigation of Coated Free Sheet Paper from the People’s Republic of China – Whether the Analytical Elements of the Georgetown Steel Opinion are Applicable to China’s Present-Day Economy, C-570-907 (U.S. Dep’t Com., Mar. 29, 2007), http://ia.ita.doc.gov/download/prc-cfsp/CFS%20China.Georgetown%20applicability.pdf, at 10.

GPX Int’l Tire Corp. v. United States, 666 F.3d 732 (C.A. Fed 2011).

Appellate Body Report, United States — Definitive Anti-Dumping and Countervailing Duties on Certain Products from China, WTO Doc. WT/DS379/AB/R (adopted Mar. 25, 2011) [US – AD and CVD (AB Report)].

Cai, supra note 9, at 160–161.

U.S. Pub. L. 112-99, An act to apply the countervailing duty provisions of the Tariff Act of 1930 to nonmarket economy countries, and for other purposes, 126 Stat. 265 (March 13, 2012), https://www.congress.gov/112/plaws/publ99/PLAW-112publ99.pdf.

Council Implementing Regulation (EU) No 452/2011 of May 6, 2011 imposing a definitive anti-subsidy duty on imports of coated fine paper originating in the People's Republic of China, 2011 O.J. (L128) 18 [hereinafter Coated Fine Paper Subsidy Decision]; Council Implementing Regulation (EU) No 451/2011 of May 6, 2011 imposing a definitive anti-dumping duty and collecting definitively the provisional duty imposed on imports of coated fine paper originating in the People's Republic of China, 2011 O.J. (L128) 1 [hereinafter Coated Fine Paper AD Decision] [hereinafter collectively Coated Fine Paper Decisions].

European Commission DG Trade, Summary of Evaluation of EC Trade Defence Instruments – Final Report prepared by Mayer, Brown, Rowe & Maw LLP (2006), http://trade.ec.europa.eu/doclib/docs/2006/february/tradoc_127383.pdf, 5.

Antonini, & Monard, supra note 3, at 89–90.

European Commission DG Trade, supra note 16, at 31.

Id.

World Trade Organisation, Countervailing Initiations: Reporting Member vs Exporter 01/01/1995 - 31/12/2016, https://www.wto.org/english/tratop_e/scm_e/CV_InitiationsRepMemVsExpCty.pdf.

US — AD and CVD (AB Report), supra note 12.

Id., ¶ 541.

Thomas J. Prusa, NMEs and the Double Remedy Problem, 16(4) World Trade Rev. 619, 625 (2017).

Cai, supra note 9, at 150.

Prusa, supra note 23, at 625.

Id.

Cai, supra note 9, at 152.

Prusa, supra note 23.

Section 15 of the WTO Protocol of Accession of the People’s Republic of China states as follows:

Price Comparability in Determining Subsidies and Dumping

Article VI of the GATT 1994, the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 (“Anti-Dumping Agreement”) and the SCM Agreement shall apply in proceedings involving imports of Chinese origin into a WTO Member consistent with the following:

(a)

In determining price comparability under Article VI of the GATT 1994 and the Anti-Dumping Agreement, the importing WTO Member shall use either Chinese prices or costs for the industry under investigation or a methodology that is not based on a strict comparison with domestic prices or costs in China based on the following rules:

If the producers under investigation can clearly show that market economy conditions prevail in the industry producing the like product with regard to the manufacture, production and sale of that product, the importing WTO Member shall use Chinese prices or costs for the industry under investigation in determining price comparability;

ii.

The importing WTO Member may use a methodology that is not based on a strict comparison with domestic prices or costs in China if the producers under investigation cannot clearly show that market economy conditions prevail in the industry producing the like product with regard to manufacture, production and sale of that product. […]

(d)

Once China has established, under the national law of the importing WTO Member, that it is a market economy, the provisions of subparagraph (a) shall be terminated provided that the importing Member's national law contains market economy criteria as of the date of accession. In any event, the provisions of subparagraph (a)(ii) shall expire 15 years after the date of accession. In addition, should China establish, pursuant to the national law of the importing WTO Member, that market economy conditions prevail in a particular industry or sector, the non-market economy provisions of subparagraph (a) shall no longer apply to that industry or sector. [emphasis added]

Protocol on the Accession of the People’s Republic of China, sec. 15 (a), WTO Doc. WT/L/432 (Nov. 23, 2001).

Vietnam’s Accession Package, Report of the Working Party, 255, WTO Doc. WT/ACC/VNM/48 255 (Oct. 27, 2006).

US Government Accountability Office, U.S. – China Trade: Eliminating Nonmarket Economy Methodology Would Lower Anti-dumping Duties for Some Chinese Companies, GAO-06-231 (Jan. 10, 2006), http://www.gao.gov/products/GAO-06-231.

Cai, supra note 9, at 151; Prusa, supra note 23, at 626; Prusa & Vermulst, supra note 7, at 218–219.

Prusa, supra note 23, at 633.

Id., at 627–628; Tariff Act of 1930, 19 U.S.C. § 1677b(c)(1) (2012).

Panel Report, United States — Definitive Anti-Dumping and Countervailing Duties on Certain Products from China, ¶14.120, 14.130-148, 14.182, WTO Doc. WT/DS379/R (adopted Mar. 25, 2011).

US — AD and CVD (AB Report), supra note 12, ¶541.

Id., ¶ 542.

Prusa, supra note 23, at 629; Prusa & Vermulst, supra note 7, at 11.

Prusa, supra note 23, at 629.

An act to apply the countervailing duty provisions of the Tariff Act of 1930 to nonmarket economy countries, and for other purposes, H.R. 4105, 112^th Congress (2012) [hereinafter Congress NME Act].

Id.

Elliot J. Feldman & John J. Burke, Testing the Limits of Trade Law Rationality: The GPX Case and Subsidies in Non-Market Economies, 62(4) Am. Univ. L. Rev. 787, 813–814 (2013).

Appellate Body Report, United States — Countervailing and Anti-Dumping Measures on Certain Products from China, WTO Doc. WT/DS449/R/AB (adopted Jul. 22, 2014).

Final Determination: Section 129 Proceeding Pursuant to the WTO Appellate Body's Findings in WTO DS79 Regarding the Anti-dumping and Countervailing Duty Investigations of Circular Welded Carbon Quality Steel Pipe from the People’s Republic of China, Memorandum, 12–13 (U.S. Dep’t Com., Jul. 31, 2012)(final determ.).

Id., at 17.

Id., at 18.

See Coated Fine Paper Decisions, supra note 15.

Cai, supra note 9, at 150.

Edwin Vermulst & Brian Gatta, Concurrent trade defence investigations in the EU, the EU’s new anti-subsidy practice against China, and the future of both, 11(3) World Trade Rev. 527, 532 (2012).

Regulation (EU) 2016/1036 of the European Parliament and of the Council of June 8, 2016 on protection against dumped imports from countries not members of the European Union, 2016 O.J. (L176) 21, art. 9(4); Regulation (EU) 2016/1037 of the European Parliament and of the Council of June 8, 2016 on protection against subsidised imports from countries not members of the European Union, 2016 O.J. (L176) 55, art. 15(1).

Vermulst & Gatta , supra note 51, at 535.

Coated Fine Paper Subsidy Decision, supra note 15.

Coated Fine Paper AD Decision, supra note 15.

Coated Fine Paper Subsidy Decision, supra note 15, ¶ 272.

Id., ¶ 273.

Antonini & Monard, supra note 3, at 96. Vermulst & Gatta , supra note 51, at 534.

Coated Fine Paper Subsidy Decision, supra note 15, ¶500.

Chien-Huei Wu, Key Issues Regarding the EU’s Concurrent Imposition of Anti-Dumping and Countervailing Duties on Chinese Coated Fine Papers: Analogue Country, Market Economy Treatment, Individual Treatment, and Double Remedy, 10 Asian J. WTO Intl. Health Pol. 263, 278–279 (2015).

Cornelis & Graafsma, supra note 9, at 26–27.

John S. Mo, Double Remedy and Illegality of the EU Determinations to Impose Concurrent Duties on the Imported Coated Fine Paper from China, 45 Revue Juridique Thémis 495, 513 (2011).

Id., at 514–515.

Coated Fine Paper Subsidy Decision, supra note 15, ¶ 492–499; Coated Fine Paper AD Decision, supra note 15, ¶ 156–157.

Mo, supra note 62, at 516–520.

US — Definitive AD and CVD (AB Report), supra note 12, ¶ 601.

Mo, supra note 62, at 533.

Id., at 51.

Agreement on Implementation of Article VI of the GATT, April 15, 1994, 1868 U.N.T.S. 201, art. 3, Marrakesh Agreement Establishing the World Trade Organization, Annex 1A, 1869 U.N.T.S. 14 [hereinafter Anti-dumping Agreement], Agreement on Subsidies and Countervailing Measures, April 15, 1994, 1869 U.N.T.S. 14, art. 15.

Coated Fine Paper Subsidy Decision, supra note 15, ¶ 376–433; Coated Fine Paper AD Decision, supra note 15, ¶ 84–129.

Coated Fine Paper Subsidy Decision, supra note 15, ¶ 499; Coated Fine Paper AD Decision, supra note 15, ¶ 165.

Mo, supra note 62, at 518, 532–534.

Coated Fine Paper AD Decision, supra note 15, ¶ 62.

Coated Fine Paper Subsidy Decision, supra note 15, ¶ 273.

US — Definitive AD and CVD (AB Report), supra note 12, ¶ 571; Cornelis & Graafsma, supra note 9, at 24–25.

Antonini & Monard, supra note 3, at 96; Vermulst & Gatta, supra note 51, at 534; Cornelis & Graafsma, supra note 9, at 26–27.

GPX Int’l Tire Corp. v. United States (GPX 2), No. 08-00285, 2010 WL 3835022, 9–10 (Ct. Int’l Trade 2010).

US — Definitive AD and CVD (AB Report), supra note 12, ¶ 272.

U.S. Department of Commerce, Review: China’s Status as a Non-Market Economy, A-570-053 (October 26, 2017), https://enforcement.trade.gov/download/prc-nme-status/prc-nme-review-final-103017.pdf.

Request for consultations by China, United States — Measures Related to Price Comparison Methodologies. WT/DS515 (Dec. 12, 2016).

Proposal for a Regulation of the European Parliament and of the Council amending Regulation (EU) 2016/1036 on protection against dumped imports from countries not members of the European Union and Regulation (EU) 2016/1037 on protection against subsidised imports from countries not members of the European Union, COM (2016) 721 final (Nov. 9, 2016), http://trade.ec.europa.eu/doclib/docs/2016/november/tradoc_155079.pdf; European Commission, Communication from the Commission to the European Parliament, the European Council and the Council: Towards a robust trade policy for the EU in the interest of jobs and growth, COM (2016) 690 final (Oct. 18, 2016), http://trade.ec.europa.eu/doclib/docs/2016/october/tradoc_155024.pdf. The European Commission last applied the NME methodology in two anti-dumping investigations against imports of Chinese products initiated on December 10, 2016. In both cases, the investigation period did not extend beyond September 2016.

See Commission Implementing Regulation (EU) 2017/1480 of August 16, 2017 imposing a provisional anti-dumping duty on imports of certain cast iron articles originating in the People's Republic of China, 2017 O.J. (L211) 14. Also see Commission Implementing Regulation (EU) 2017/1444 of August 9, 2017 imposing a provisional anti-dumping duty on imports of certain corrosion resistant steels originating in the People's Republic of China, 2017 O.J. (L207) 1.

European Commission Press Release IP/16/3475, Commission urges Member States to Support Proposals to Strengthen European Defences Against Unfair Trade (Oct. 19, 2016).

European Parliament, Protection from dumped and subsidised imports, EU Legislation in Progress Briefing (Nov. 10, 2017), at 6, http://www.europarl.europa.eu/RegData/etudes/BRIE/2017/595905/EPRS_BRI%282017%29595905_EN.pdf; See Regulation (EU) 2017/2321 of the European Parliament and of the Council of 12 December 2017 amending Regulation (EU) 2016/1036 on protection against dumped imports from countries not members of the European Union and Regulation (EU) 2016/1037 on protection against subsidised imports from countries not members of the European Union, 2017 O.J. (L388) 1, art. 1(1) [hereinafter EU NME Amendment].

The approach differs from the existing ‘cost adjustment methodology’ applied to market economies in Preparation of the proposal The changes the proposal would bring EPRS Protection from dumped and subsidised imports Background Proposal Views Legislative process References ‘particular market situations’, such as the Russian gas sector under Article 2(5) of the AD regulation in terms of the extent and pervasiveness of the market distortions to be captured. European Parliament, Protection from dumped and subsidised imports, id.

See Council Regulation (EC) No 661/2008 of 8 July 2008 imposing a definitive anti-dumping duty on imports of ammonium nitrate originating in Russia following an expiry review pursuant to Article 11(2) and a partial interim review pursuant to Article 11(3) of Regulation (EC) No 384/96, 2008 O.J. (L185) 1, ¶59. Council Regulation (EC) No 1256/2008 of 16 December 2008 imposing a definitive anti-dumping duty on imports of certain welded tubes and pipes of iron or non-alloy steel originating in Belarus, the People's Republic of China and Russia following a proceeding pursuant to Article 5 of Regulation (EC) No 384/96, originating in Thailand following an expiry review pursuant to Article 11(2) of the same Regulation, originating in Ukraine following an expiry review pursuant to Article 11(2) and an interim review pursuant to Article 11(3) of the same Regulation, and terminating the proceedings in respect of imports of the same product originating in Bosnia and Herzegovina and Turkey, 2008 O.J. (L343) 1, ¶111. See also Jochem de Kok, The Future of EU Trade Defence Investigations against Imports from China, 19 J. Int’l Econ. L. 515, 517 (2016). Anne McGregor & Arnoud Willems, Russia recognised as a “market economy country” in EC anti-dumping legislation: an overview of the 2002 amendments to Regulation 384/96, 9(1) Int. Trade L. Rev. 29 (2003). Vermulst & Gatta, supra note 51, at 539.

Vermulst & Gatta, supra note 51, at 539.

Request for consultations by Russia, European Union — Cost Adjustment Methodologies and Certain Anti-Dumping Measures on Imports from Russia, WTO Doc. WT/DS474 (Dec. 23, 2013). Request for consultations by Russia, European Union — Cost Adjustment Methodologies and Certain Anti-Dumping Measures on Imports from Russia (Second complaint), WTO Doc. WT/DS494 (May 7, 2015). The disputes have not progressed beyond consultation stage.

Appellate Body Report, European Union — Anti-Dumping Measures on Biodiesel from Argentina, WTO Doc. WT/DS473/AB/R (adopted October 6, 2016) [hereinafter EU — Biodiesel (AB Report)]; Kok, supra note 85, at 517.

EU — Biodiesel (AB Report), id., ¶6.82.

Kok, supra note 85.

Request for consultations by China, European Union — Measures Related to Price Comparison Methodologies, WTO Doc. WT/DS516 (Dec. 12, 2016), ¶11.

Brian D. Kelly, Market economies and concurrent anti-dumping and countervailing duty remedies, 17 J. Int’l Econ. L. 105 (2014).

Council Regulation 599/2009 of 7 July 2009 imposing a definitive anti-dumping duty and collecting definitively the provisional duty imposed on imports of biodiesel originating in the United States of America, 2009 O.J. (L179) 26, ¶ 52–53 [hereinafter EU Biodiesel AD Decision].

Council Regulation No 598/2009 of July 7, 2009 on imposing a definitive countervailing duty and collecting definitely the provisional duty imposed on imports of biodiesel originating in the United States of America, 2009 O.J. (L179) 1, ¶195; EU Biodiesel AD Decision, id., ¶47.

US — Definitive AD and CVD (AB Report), supra note 12, ¶543.

Kelly, supra note 92, at 119.

Prusa, supra note 23, at 629.

European Parliament, Committee on International Trade, Provisional agreement resulting from interinstitutional negotiations, Proposal for a regulation of the European Parliament and of the Council amending Council Regulation (EC) No 1225/2009 on protection against dumped imports from countries not members of the European Community and Council Regulation (EC) No 597/2009 on protection against subsidised imports from countries not members of the European Community, COM (2018) 192 final (Jan. 10, 2018) 12.

Id., at 30.

100

US — Definitive AD and CVD (AB Report), supra note 12, ¶602.

101

Preliminary Determination of Adjustments to the Anti-dumping Duty Cash Deposit Rates: Section 129 Proceeding Pursuant to the WTO Appellate Body’s Findings in WTO DS379 Regarding the Anti-dumping Duty Investigation of Circular Welded Carbon Quality Steel Pipe (CWP) from the People’s Republic of China, Memorandum (U.S. Dep’t Com., May 31, 2012)(prelim. determ.).

102

EU NME Amendment, supra note 83, art.2.

103

Proposal for a Regulation of the European Parliament and of the Council amending Regulation (EU) 2016/1036 on protection against dumped imports from countries not members of the European Union and Regulation (EU) 2016/1037 on protection against subsidised imports from countries not members of the European Union COM (2016) 721 final (Nov., 9, 2016), Explanatory Memorandum, ¶1.2.

Title: Double Remedy: Beyond the Non-market Economy Status
Author: Katarzyna Kaszubska
Publisher: Springer Singapore
Book: Non-market Economies in the Global Trading System
Print ISBN: 978-981-13-1330-1

Electronic ISBN: 978-981-13-1331-8

Copyright Year: 2018
DOI: https://doi.org/10.1007/978-981-13-1331-8_5