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The Issue of ‘Particular Market Situation’ Under WTO Anti-dumping Law

Abstract

The expiry of the so-called NME Methodology under China’s WTO Accession Protocol has led to the search for potential alternatives to continue to treat China as an NME in anti-dumping actions, and the growing importance of the concept of ‘particular market situation’ (“PMS”) under the WTO Anti-Dumping Agreement. This chapter discusses how the PMS method should be interpreted and applied and the implications of the Appellate Body’s recent decisions in the EUBiodiesel dispute for the issue of PMS. The chapter then offers a brief overview of Australia’s application of the PMS method in anti-dumping actions, and the latest development of anti-dumping laws and practices in the US and the EU in this connection.

Keywords

  • Particular market situation
  • EU—Biodiesel
  • Proper comparison
  • Anti-dumping agreement

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Notes

  1. 1.

    Protocol on the Accession of the People’s Republic of China, WTO Doc. WT/L/432 (Nov. 23, 2001). Many other publications have also discussed the interpretative issues of Sect. 15, see, e.g., Edwin Vermulst, Juhi Dion Sud & Simon Evenett, Normal Value in Anti-Dumping Proceedings against China Post-2016: Are Some Animals Less Equal Than Others? 11(5) Global Trade & Customs J., 212, 228 (2016); Jorge Miranda, Interpreting Paragraph 15 of China’s Protocol of Accession, 9(3) Global Trade & Customs J., 94, 103 (2014); Stewart, T.P., Fennell, W.A, Bell, S.M. & Birch, N.J., The Special Case of China: Why the Use of a Special Methodology Remains Applicable to China after 2016, 9(6) Global Trade & Customs J., 272, 279 (2014); David Kleimann, The Vulnerability of EU Anti-Dumping Measures against China after December 11, 2016 1–10 (EU University Institute, Working Paper No. RSCAS 2016/37, July 2016); Andrei Suse, Old Wine in A New Bottle: The EU’s Response to the Expiry of Sect. 15(A)(II) of China’s WTO Protocol of Accession 1-31 (Leuven Centre for Global Governance Studies, Working Paper No. 186, May 2017).

  2. 2.

    Weihuan Zhou and Andrew Percival, Debunking the Myth of 'Particular Market Situation' in WTO Anti-dumping Law, 19(4) J. Int’l Econ. L., 863, 868 (2016).

  3. 3.

    Appellate Body Report, ChinaMeasures Affecting Trading Rights and Distribution Services for Certain Publications and Audiovisual Entertainment Products, ¶ 219, WTO Doc. WT/DS363/AB/R (adopted Jan. 19, 2010).

  4. 4.

    GATT Panel, ECImposition of Anti-Dumping Duties on Imports of Cotton Yarn from Brazil, ¶ 478, GATT Doc. ADP/137 (adopted Jul. 4, 1995).

  5. 5.

    Appellate Body Report, European UnionAnti-Dumping Measures on Biodiesel from Argentina, ¶ 6.25, WTO Doc. WT/DS473/AB/R (adopted Oct. 26, 2016) [hereinafter EUBiodiesel (AB Report)].

  6. 6.

    Appellate Body Report, United StatesFinal Countervailing Duty Determination with Respect to Certain Softwood Lumber from Canada, ¶ 140, WTO Doc. WT/DS257/AB/R, (adopted Feb. 17, 2004). Also see Sherzod Shadikhodjaev, How to Pass a Pass-Through Test: the Case of Input Subsidies, 15(2) J. Int’l Econ. L., 621, 646 (2012).

  7. 7.

    Thomas Prusa and Edwin Vermulst, United StatesDefinitive Anti-Dumping and Countervailing Duties on Certain Products from China: Passing the Buck on Pass-Through, 12(2) World Trade Rev., 197, 234 (2013).

  8. 8.

    For a detailed analysis of the Appellate Body report, see Weihuan Zhou, Appellate Body Report on EUBiodiesel: The Future of China’s State Capitalism under the WTO Anti-Dumping Agreement, World Trade Rev., 1–25 FirstView (2018).

  9. 9.

    Panel Report, European UnionAnti-Dumping Measures on Biodiesel from Argentina, WTO Doc. WT/DS473/R, ¶ 2.2-2.3, 7.179-7.184 (adopted Oct. 26, 2016); EUBiodiesel (AB Report), supra note 5, ¶ 5.1, 5.10.

  10. 10.

    Council Implementing Regulation (EU) No. 1194/2013 of 19 November 2013, imposing a definitive anti-dumping duty and collecting definitively the provisional duty imposed on imports of biodiesel originating in Argentina and Indonesia, 2013 O.J (L315), ¶ 30.

  11. 11.

    Id., ¶ 34.

  12. 12.

    EUBiodiesel (AB Report), supra note 5, ¶ 6.16.

  13. 13.

    Id., ¶ 6.30.

  14. 14.

    Id., ¶ 6.35–6.37, 6.39.

  15. 15.

    Id., ¶ 6.41.

  16. 16.

    Id., ¶ 6.55.

  17. 17.

    Id., ¶ 6.22.

  18. 18.

    Id., ¶ 6.24.

  19. 19.

    Appellate Body Report, United StatesAnti-Dumping Measures on Certain Hot-Rolled Steel Products from Japan, ¶ 140–143, WTO Doc. WT/DS184/AB/R (adopted Aug. 23, 2001). See also Stéphanie Noël and Weihuan Zhou, Replacing the Non-Market Economy Methodology: Is the European Union’s Alternative Approach Justified Under the World Trade Organization Anti-Dumping Agreement?, 11(11/12) Global Trade & Customs J., 559, 563–565 (2016).

  20. 20.

    Panel Report, United StatesAnti-Dumping Measures on Certain Oil Country Tubular Goods from Korea, ¶ 7.184, WTO Doc. WT/DS488/R (adopted Jan. 12, 2018).

  21. 21.

    Id., ¶ 7.194, 7.197.

  22. 22.

    Id., ¶ 7.198-7.200.

  23. 23.

    Weihuan Zhou, Australia’s Anti-Dumping and Countervailing Law and Practice: An Analysis of Current Issues Incompatible with Free Trade with China, 49(6) Jwt., 975–1010 (2015).

  24. 24.

    Memorandum of Understanding between the Department of Foreign Affairs and the Trade of Australia and the Ministry of Commerce of the People’s Republic of China on the Recognition of China’s Full Market Economy Status and the Commencement of Negotiation of a Free Trade Agreement between Australia and the People’s Republic of China (Apr. 18, 2005), https://dfat.gov.au/trade/agreements/chafta/Documents/mou_aust-china_fta.pdf.

  25. 25.

    See, e.g., Austl. Customs & Border Protection Serv., Certain Hollow Structural Sections Exported from the people’s Republic of China, the Public of Korea, Malaysia, Taiwan and the Kingdom of Thailand, Report to the Minister No. 177, 118–148 (Jun. 7, 2012) [hereinafter HSS Decision]; Anti-Dumping Commission, Alleged Dumping of Certain Crystalline Silicon Photo voltaic Modules or Panels Exported from the People’s Republic of China, Report No. 239, 88–89 (Oct. 6, 2015) (Austl.) [hereinafter Crystalline Silicon Decision]; Austl. Customs & Border Protection Serv., Aluminium Road Wheels Exported from the People’s Republic of China, Report to the Minister No. 181, 36–37 (Jun. 12, 2012) [hereinafter Aluminium Road Wheels Decision].

  26. 26.

    See, e.g., HSS Decision, supra note 25, at 43–62, 257-274; Aluminium Road Wheels Decision, supra note 25, at 36–44; Austl. Customs & Border Protection Serv., Dumping of Zinc Coated (Galvanised) Steel and Aluminium Zinc Coated Steel Exported from the People’s Republic of China, the Republic of Korea, and Taiwan, Report to the Minister No. 190, 60-63 (Apr. 30, 2013); Anti-Dumping Commission, Alleged Dumping of Deep Drawn Stainless Steel Sinks Exported from the People’s Republic of China, and Alleged Subsidisation of Deep Drawn Stainless Steel Sinks Exported from the People’s Republic of China, Report No. 238, 41–43 (Feb. 15, 2015).

  27. 27.

    Anti-Dumping Commission, A4 Copy Paper from Brazil, China, Indonesia and Thailand, EPR 341, (Austl.), www.adcommission.gov.au/cases/Pages/CurrentCases/EPR-341.aspx.

  28. 28.

    Anti-Dumping Commission, White Uncoated A4 Copy (Cut Sheet) Paper Exported from The Federal Republic of Brazil, the People’s Republic of China, the Republic of Indonesia and the Kingdom of Thailand: Application for the publication of dumping and/or countervailing duty notices, 44–49 (Feb., 2016) (Austl.), http://www.adcommission.gov.au/cases/EPR%20301%20%20350/EPR%20341%20-%20archived%2018%20October%202017/001%20-%20APPLICATION%20A4%20Copy%20Paper%20-%20Public%20File.pdf.

  29. 29.

    Id., ¶¶ 52–54.

  30. 30.

    Anti-Dumping Commission, Alleged Dumping of A4 Copy Paper Exported from the Federative Republic of Brazil, the People’s Republic of China, the Republic of Indonesia and the Kingdom of Thailand, 50–51 (March 17, 2017) (Austl.), http://adcommission.gov.au/cases/EPR%20301%20%20350/EPR%20341/221%20-%20Report%20-%20Final%20Report%20-%20REP%20341.pdf [hereinafter A4 Copy Paper Decision].

  31. 31.

    Id., ¶ 167.

  32. 32.

    Id., ¶ 168.

  33. 33.

    Id., ¶¶ 170–172.

  34. 34.

    Id., ¶¶ 173–174.

  35. 35.

    Id., ¶ 230.

  36. 36.

    Id., ¶ 230.

  37. 37.

    Id., ¶ 153.

  38. 38.

    Matthew R. Nicely and Brian Gatta, U.S. Trade Preferences Extension Act (TPEA) of 2015Could Lead to Increased Use of “Particular Market Situation” in Calculating Normal Value in Anti-Dumping Cases, 11(5) Global Trade & Customs J. 238, 243 (2016).

  39. 39.

    Id., ¶ 243.

  40. 40.

    Issues and Decision Memorandum for the Final Results of the 2014-2015 Administrative Review of the Anti-dumping Duty Order on Certain Oil Country Tubular Goods from the Republic of Korea, 40-41 (U.S. Dep’t Com., Apr. 10, 2017), http://enforcement.trade.gov/frn/summary/korea-south/2017-07684-1.pdf.

  41. 41.

    Id., ¶ 40.

  42. 42.

    Id., ¶¶ 40–41.

  43. 43.

    Id., ¶ 41.

  44. 44.

    Id., ¶ 42.

  45. 45.

    Id., ¶ 43. The USDOC observed that “where a particular market situation affects the cost of production for the foreign like product, such as through distortions in the cost of inputs, for example, it is reasonable to conclude that such a situation may prevent a proper comparison with the export price or constructed value.” .

  46. 46.

    Stéphanie & Zhou, supra note 19. For an overview of the relevant EU regulations on NMEs, see Suse, supra note 1, at 7–8.

  47. 47.

    Regulation on Protection against Dumped Imports from Countries not Members of the European Union, Eur. Parl. Doc. 2016/1036 (Jun. 8, 2016); Regulation on Protection against Subsidised Imports from Countries not Members of the European Union, Eur. Parl. Doc. (EU) 2016/1037 (Jun. 8, 2016); Regulation of the European Parliament and of the Council , Eur. Parl. Doc. PE-CONS 50/17 (Nov. 23, 2017).

  48. 48.

    Suse, supra note 1, at 19–20.

  49. 49.

    European Council Press Release IP231/17, Anti-Dumping Methodology: Council Agrees Negotiating Position (May 3, 2017).

  50. 50.

    European Commission, Joint Press Conference by Jyrki Katainen, Vice-President of the EC, and Cecilia Malmström, Member of the EC, on the Treatment of China in Anti-Dumping Investigations (Jul. 20, 2016), https://ec.europa.eu/avservices/video/player.cfm?ref=I124960.

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Zhou, W. (2018). The Issue of ‘Particular Market Situation’ Under WTO Anti-dumping Law. In: Nedumpara, J., Zhou, W. (eds) Non-market Economies in the Global Trading System. Springer, Singapore. https://doi.org/10.1007/978-981-13-1331-8_7

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