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2018 | OriginalPaper | Chapter

‘Rebuttable Presumption’ to ‘Refutable Assumption’: An Assessment of Market Economy Treatment by the Indian Designated Authority from 1995 till 2018

Authors : Sanjay Notani, Parthsarathi Jha, Rishab Raturi

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

Publisher: Springer Singapore

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Abstract

This chapter analyses the approaches adopted by India’s Anti-dumping Authority since 1995 in dealing with producers from China and other Non-Market Economies in anti-dumping investigations. It discusses the relevant Indian legislative framework and emphasizes on factors that have been considered for determining the market economy status of co-operating producers/exporters. The chapter also highlights the methodology adopted by the Anti-Dumping authorities in calculating the normal value of products exported from China.

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previous chapter Treatment of Non-market Economies in Anti-dumping Proceedings: The Mexican Approach

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Protocol on the Accession of the People’s Republic of China (Nov. 10, 2001), Sec. 15, WTO Doc. WT/L/432, U.N. Doc. 2182 U.N.T.S. 138 [hereinafter Chinese Accession Protocol].

Barbara Barone, One Year To Go: The Debate Over China's Market Economy Status (MES) Heats Up, directorate – general for external policies, european parliament (Dec., 2015), https://www.eesc.europa.eu/resources/docs/one-year-to-go.pdf; Michael Flynn, China: A Market Economy, 48 Georgetown J. Int’l L. (2016); Chad P Brown, Should the United States Recognize China as a Market Economy, Peterson Insti. Int’l Econ., (Dec., 2016).

Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade, Apr. 15, 1994, Marrakesh Agreement Establishing the World Trade Organization, Annex 1A, 1869 U.N.T.S. 201 (1994), art. 2.1 [hereinafter Anti-Dumping Agreement].

Id.

Anti-Dumping Agreement, supra note 3.

Interestingly, while the term “non-market economy” has been in vogue ever since the establishment of the WTO, the GATT 1994 or the Anti-dumping Agreement do not use the term or define it. Rather what is a non-market economy has been determined by the member countries in accordance with their municipal laws.

Marrakesh Agreement Establishing the World Trade Organization, Apr. 15, 1994, Annex 1A Second Supplementary Provision, 1857 U.N.T.S. 154.

Appellate Body Report, European Communities — Definitive Anti-dumping Measures on Certain Iron or Steel Fasteners from China, WTO Doc. WT/DS397/AB/R, at 285 (adopted Jul. 15, 2011).

Sec. 15 of the Chinese Accession Protocol, supra note 1, reads in relevant part as follows:

Article 6 of the GATT 1994, the Agreement on Implementation of Article 6 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 6 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:

(i)

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.

Richard Lockridge, Doubling Down in Non-Market Economies: The Inequitable Application of Trade Remedies Against China and the Case for a New WTO Institution, 24 S. Cal. Interdisc. L.J. 249, 259.

Request for Consultations by China, United States — Measures related to Price Comparison Methodologies, WTO Doc. WT/DS515/1; Request for Consultations by China, European Union — Measures Related to Price Comparison Methodologies, WTO Doc. WT/DS516/1.

Aaron P. Bernstein, US Formally Opposes China Market Economy Status at WTO, CNBC, (Nov. 30, 2017), https://www.cnbc.com/2017/11/30/us-formally-opposes-china-market-economy-status-at-wto.html.

See World Trade Organisation, European Union — Measures Related to Price Comparison Methodologies, https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds516_e.htm.

Customs Tariff Act, No. 51 of 1975, India Code, Sec. 9A-9C (1975) [hereinafter the Customs Act].

Custom Tariff (Identification, Assessment and Collection of Anti-Dumping Duty on Dumped Articles and for Determination of Injury) Rules, Gazette of India, section II(3)(i) (Jan. 1, 1995) [hereinafter the Indian Anti-Dumping Rules].

Customs Act, supra note 14, Sec. 9A-9C.

See, e.g. Amendment in the Customs Tariff (Identification, Assessment and Collection of Anti- dumping Duty on Dumped Articles and for Determination of Injury) Rules, No. 44/1999 (N.T.), (Ministry of Com. & Indus., Jul. 15, 1999) [hereinafter Indian Anti-Dumping Rules Amendment]; Customs Notification, No. 28/2001 (N.T.), (Central Board of Excise and Customs May 31, 2001) [hereinafter Customs Notification 2001]; Customs Notification, No. 1/2002 (N.T.) [hereinafter Customs Notification 2002]; (Central Board of Excise and Customs Jan. 4, 2004); Customs Notification, No. 101/2003 (N.T.), (Central Board of Excise and Customs Nov. 10, 2003).

For instance, India granted Viet Nam market economy status upon Viet Nam’s insistence during the signing of the India-ASEAN Free Trade Agreement in 2009. See India grants market economy status to Viet Nam, The Hindu (Oct. 25, 2009), http://www.thehindu.com/news/national/India-grants-market-economy-status-to-Vietnam/article16888472.ece.

Annex I to the Indian Anti-Dumping Rules had listed the following countries as non-market economies: Albania, Armenia, Azerbaijan, Belarus, People’s Republic of China, Georgia, Kazakhstan, North Korea, Kyrgyzstan, Moldova, Mongolia, Russia, Tajikistan, Turkmenistan, Ukraine, Uzbekistan and Viet Nam. However, based on amendments made in 2002, However, this was replaced by the term “any country”.

Paragraph 7 of Annexure I provides that:

[a]n appropriate market economy third country shall be selected by the designated authority in a reasonable manner keeping in view the level of development of the Country concerned and the product in question and due account shall be taken of any reliable information made available at the time of the selection. Account shall also be taken within time limits; where appropriate, of the investigation if any made in similar matter in respect of any other market economy third country. The parties to the investigation shall be informed without unreasonable delay the aforesaid selection of the market economy third country and shall be given a reasonable period of time to offer their comments.

See Indian Anti-Dumping Rules, supra note 15, Annexure I, ¶ 7.

See Indian Anti-Dumping Rules Amendment, supra note 17, Annexure I; Customs Notification 2002, supra note 17; Customs Notification 2001, supra note 17; Customs Notification, No. 101/2003 (N.T.), (Central Board of Excise and Customs Nov.10, 2003), http://www.cbec.gov.in/htdocs-cbec/customs/cs-act/formatted-htmls/cs-import-rule16.

See Indian Anti-Dumping Rules, supra note 15, Annexure I, sub-para. 8 (1).

See Indian Anti-Dumping Rules, supra note 15, Annexure I, sub-para. 8 (3).

See, Indian Anti-Dumping Rules, supra note 15, Annexure I, proviso to sub-para. 8 (3).

Director General of Anti-Dumping and Allied Duties, Market Economy Questionnaire, http://dgtr.gov.in/sites/default/files/nmequestionnaire.pdf.

Anti-Dumping Investigations concerning imports of “Cathode Ray Colour Television Picture Tubes originating in or exported” from Malaysia, Thailand, China PR and Korea, F. No. 14/8/2007-DGAD, ¶ 65 (Ministry and Com. & Indus. Feb.17, 2009) (final finding) [hereinafter Cathode Ray TV Investigation].

Id.

See Anti-dumping duty investigation concerning imports of “Elastomeric Filament Yarn” from China PR, South Korea, Taiwan and Vietnam, F. No.14/29/2015-DGAD, 47 (Ministry of Com. & Indus., Mar. 24, 2017) (final finding) [holding that INVISTA cannot be given market economy status as it failed to show supporting documents for raw material purchases]. While this appears to be the usual approach, there are investigations where the Designated Authority has undertaken a comprehensive analysis of all other relevant factors. See Anti-dumping investigations concerning import of “Nylon Tyre Cord Fabric” originating in or exported from China PR, F. No.14/20/2003-DGAD, 47 (Ministry of Com. & Indus., Mar. 9, 2005) (final finding).

Antidumping investigations concerning imports of “Compact Fluorescent Lamps” originating in/exported from China PR, Vietnam and Sri Lanka, notification dated Feb. 27, 2009, No. 14/1/2007 (Ministry of Com. & Indus., Feb. 27, 2009) (final finding) [hereinafter Compact Flurescent Lamps Invesitgation].

Id., ¶ 42.

Anti-Dumping Investigation concerning imports of “Vitamin-A Palmitate” originating in or exported from Switzerland and China PR, F. No.14/11/2005-DGAD, 42.3 (Ministry of Com. & Indus., Sep. 14, 2007) (final finding).

Id., ¶ 45.

Id., ¶¶ 34–44.

Anti-dumping investigations concerning imports of “Flat-Base Steel Wheels” originating in/exported from China PR, F. No. 14/8/2005-DGAD, 15 (Ministry of Com. & Indus., Nov. 28, 2007) (final finding) [hereinafter Flat-Steel Base Wheels Investigation].

Id., ¶ 44.

Id., ¶ 46.

Anti-Dumping Investigations concerning imports of “SDH Equipment” originating in or exported from China PR and Israel, F. No.14/2/2009-DGAD, 42.3 (Ministry of Com. & Indus., Oct. 19, 2010) (final finding) [hereinafter SDH Equipment Investigation].

Id., ¶¶ 96–97.

10 firms can be identified in the investigations identified from footnote 42 till footnote 52. The 11^th firm is identified in the SDH investigation on Supra note 38; the 12^th firm has been identified in the Final Findings of Anti-dumping investigation on imports of “Circular Weaving Machines” having six or more shuttles for weaving PP/HDPE Fabrics of a width exceeding 30 cms, originating in or exported from China PR, F. No. 14/25/2008-DGAD, ¶¶ 14, 15 (Ministry of Com. & Indus., Nov. 16, 2010) (final finding).

For example, Qingdao Doublestar Tire Industrial Co Ltd., a firm under investigation in one of the anti-dumping investigations, withdrew its request for MET claim. See Antidumping investigation involving import of “Bus and Truck Radial Tyres”, originating in or exported from China PR and Thailand, F. No.14/17/2008-DGAD, 21 (Ministry of Com. & Indus., Jan. 1, 2010) (final finding).

Huawei Technologies Co. Ltd. v. Designated Authority, CESTAT, 2016 (334) E.L.T. 339 (India) [hereinafter Huawei Case].

CESTAT is an independent appellate forum to hear the appeals against orders and decisions passed under the Customs Act 1962.

Huawei Case, supra note 42, ¶ 93.

Id., ¶ 36.

Holding that “Para 7 to Annexure I now provides for the determination of the normal value with reference to the price paid by a third country with a market economy to India of a like product. If such a third country is selected, the Designated Authority has to inform the exporters of the selection and grant them a reasonable period to offer their comments. It is only if this procedure is not possible that the Designated Authority can act on any other ‘reasonable basis’. In other words, the Designated Authority must exhaust the first method before moving to the alternative procedure.

Shenyang Matsushita S. Battery Co. Ltd. v Exide Industries Ltd., 2005 (181) E.L.T. 320 (S.C.), 7 (2005) (India).

See Anti-dumping investigation concerning imports of “Castings for Wind Operated Electricity Generators, whether or not machined, in raw, finished or sub-assembled form, or as a part of a sub-assembly, or as a part of an equipment/component meant for wind-operated electricity generators”, originating in or exported from China PR, ¶ 64 (Ministry of Com. & Indus., Jul. 28, 2017) (final finding); Anti-dumping investigation concerning imports of “Hot-Rolled flat products of alloy or non-alloy steel” originating in or exported from China PR, ¶ 35 (Ministry of Com. & Indus., Apr. 10, 2017) (final finding); Anti-dumping investigation concerning imports of “O-Acid” originating in or exported from China PR, ¶ 32 (Ministry of Com. & Indus., Dec. 19, 2017) (final findings); Anti-dumping duty investigation on the imports of “Ofloxacin” originating in or exported from China PR ¶ 22 (Ministry of Com. & Indus., Dec. 22, 2017) (final findings); Sunset review (SSR) investigation of the anti-dumping duties imposed on the imports of “Saccharin” from China PR ¶ 27 (Ministry of Com. & Indus., Dec. 30, 2017) (final finding); Anti-dumping duty investigation on the imports of “Sulphonated Naphthalene Formaldehyde” originating in or exported from China PR ¶ 27 (Ministry of Com. & Indus., Dec. 30, 2017) (final finding); Anti-dumping duty investigation on the imports of “Sulphonated Naphthalene Formaldehyde” originating in or exported from China PR ¶¶ 26–27 ((Ministry of Com. & Indus., Dec. 30, 2017) (final finding); Anti-dumping investigation concerning imports of “Methyl Ethyl Ketone” or MEK, originating in or exported from China PR, Japan, South Africa and Taiwan ¶ 31 (Ministry of Com. & Indus., Feb. 18, 2018) (final finding).

See Anti-Dumping Investigations concerning imports of “Cast Aluminium Alloy Wheels or Alloy Road Wheels used in Motor Vehicles”, whether or not attached with their accessories, of a size in diameters ranging from 12 inches to 24 inches, originating in or exported from China PR, Korea RP and Thailand ¶¶50–54 (Ministry of Com. & Indus., Jul. 9, 2014) (final finding); Anti-dumping investigation concerning imports of “USB Flash Drives”, originating in or exported from China PR, Taiwan and Republic of Korea ¶ 96 (Ministry of Com. & Indus., Dec. 19, 2014) (final finding); Anti-Dumping investigation concerning imports of “Glazed/Unglazed Porcelain/Vitrified tiles in polished or unpolished finish with less than 3% water absorption”, originating in or exported from China PR ¶¶ 114, 115 (Ministry of Com. & Indus., Apr. 8, 2014) (final finding); Anti-dumping investigation concerning imports of “Toluene Di- Isocyanate (TDI)” originating in or exported from China PR, Japan and Korea RP ¶ 42 (Ministry of Com. & Indus., Dec. 13, 2017) (final findings); Anti-dumping investigation concerning imports of “Polyester Staple Fibre” from China PR, Indonesia, Malaysia and Thailand ¶ 45 (Ministry of Com. & Indus., Jan. 25, 2018) (final finding).

Anti-Dumping Investigations concerning imports of “Carbon Black used in rubber applications” originating in or exported from Australia, China PR, Iran, Malaysia, Russia and Thailand, F. No.14/21/2008-DGAD (Ministry of Com. & Indus., Dec. 24, 2009) (final finding).

Id., ¶ 60.

Antidumping investigation involving import of “Bus and Truck Radial Tyres”, originating in or exported from China PR and Thailand, F. No.14/17/2008-DGAD, (Ministry of Com. & Indus., Jan. 1, 2010) (final finding) [hereinafter Radial Tyres Investigation].

SDH Equipment Investigation, supra note 38.

Radial Tyres Investigation, supra note 51, ¶ 51.

SDH Equipment Investigation, supra note 38, ¶ 94.

Id., ¶ 106.

Anti-dumping duty investigation on the imports of “Ceramic Roller” originating in or exported from China, F. No. 14/47/2016-DGAD, (Ministry of Com. & Indus., Mar. 26, 2018) (final finding) [hereinafter Ceramic Roller Investigation].

Id., ¶ 22.

Id., ¶ 23.

Id., ¶ 26.

Id., ¶ 27.

Anti-dumping investigation concerning imports of “Phosphorus Pentoxide” originating in or exported from China, F. No. 14/47/2016 – DGAD, (Ministry of Com. & Indus., Mar. 5, 2018) (final finding) [hereinafter Phosphorus Investigation].

Anti-dumping investigation concerning imports of ‘Glassware’ originating in or exported from People’s Republic of China and Indonesia, F. No. 14/45/2016 – DGAD, (Ministry of Com. & Indus., Mar. 5, 2018) (final finding).

Id., ¶ ¶ 60, 61.

Phosporus Investigation, supra note 61, ¶ 32.

Anti-dumping investigation concerning imports of “Methyl Ethyl Ketone” originating in or exported from China PR, Japan, South Africa and Taiwan, F. No. 14/26/2016-DGAD, ¶ 30, (Ministry of Com. & Indus., Feb. 1, 2018) (final finding).

Appellate Body Report, European Union — Anti-Dumping Measures on Biodiesel from Argentina, WTO Doc. WT/DS473/AB/R (adopted Oct. 26, 2016).

Panel Report, European Union — Anti-Dumping Measures on Biodiesel from Indonesia, WTO Doc. WT/DS480/R (adopted Feb. 28, 2018).

Glassware Investigation, supra note 62, ¶ 61.

Title: ‘Rebuttable Presumption’ to ‘Refutable Assumption’: An Assessment of Market Economy Treatment by the Indian Designated Authority from 1995 till 2018
Authors: Sanjay Notani
Parthsarathi Jha
Rishab Raturi
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_11