Abstract
This article traces the history and development of the current non-market economy methodology (NME) under U.S. anti-dumping law and practice as it applies to China and Vietnam and examines the likely change the methodology might undergo in the event that either China or Vietnam were granted market economy treatment. The study reviews early days of U.S. anti-dumping practice, which evolved to address imports from centrally planned economies such as Czechoslovakia and Poland where domestic prices were considered unreliable due to the centrally planned nature of these economies. The Department of Commerce in those early cases weighed different methodologies to calculate normal value for goods originating from these countries and developed a practice where it tended to rely on data from non-state controlled third country “surrogates”. The surrogate country methodology had its limitations, and as Chinese imports made their way to the United States in the 1980s, the Department of Commerce again reworked its methodology to arrive at what is now known as the “factors of production methodology”. The factors of production methodology has led, to what many believe, inflated dumping margins on Chinese and Vietnamese exports. As part of its accession to the WTO, China agreed to be treated as an NME in domestic anti-dumping proceedings but it premised its agreement to such treatment on the understanding that NME treatment would end after 15 years of China’s accession to the WTO, i.e. by December 11, 2016. However, the United States and the European Union continue to apply the NME methodology to Chinese exports even after this date, resulting in a challenge by China at the WTO. Against the backdrop of the battle at the WTO, U.S. anti-dumping law continues to evolve to address unfair trade concerns with the application of new pricing methodologies, such as the “particular market situation” methodology which is being increasingly relied on by the Department of Commerce to reject both costs and domestic prices of exporters from market economy countries. That the methodology is being applied to market economy exports suggests that any success which China may have at the WTO in compelling the United States or the European Union (EU) to end its NME status may well be limited. The article concludes with a look to the future including the evolution of the “particular market situation” methodology and the potential WTO challenges that might arise in response to its continued application.
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Notes
- 1.
China was in accession negotiations first with the GATT and then the WTO from 1986 to 2001. See, Working Party on the Accession of China, Report of the Working Party on the Accession of China, 1, WTO Doc. WT/ACC/CHN/49 (Oct. 1, 2001).
- 2.
Anti-dumping duties seek to address unfair pricing by exporters which hurts or injures an importing country’s domestic industry. In anti-dumping proceedings an investigative authority determines if a merchandise is being “dumped” i.e. whether a foreign firm sells merchandise in an export market at a price lower than the price it charges for a comparable product sold in its domestic market. The price of the merchandise in its home market is called the normal value, while the price in the export market is called the export price. The difference between a company’s export price and the normal value is called the dumping “margin,” which often is expressed as a percentage of the export price. In some instances, normal value may be ascertained by relying on the foreign firm’s price for the merchandise in a third country export market or by computing the firm's cost of producing the merchandise, taking into account the selling, general, and administrative expenses, and profit. Either way, an importing country's investigating authority will rely on an exporters own prices or costs as the basis for a price comparison. This is not the case for exporters from non-market economy countries such as China where a foreign firm’s domestic prices and costs are disregarded in deriving normal value. See, U.S. Dep’t Com., 2015 Anti-dumping Manual – Fair Value Comparisons, 2, https://enforcement.trade.gov/admanual/index.html [hereinafter USDOC Anti-dumping Manual].
- 3.
China accounted for 13 percent of all anti-dumping investigations initiated by the United States between 1995 and 2001, making it the most frequent target of U.S. anti-dumping investigations even though the country was only the fifth largest exporter to the United States, and accounted for only 8 percent of the U.S. market. Further between 1980 and 2004, the average country-wide duty rates applied against China was about 98 percent, ‘over 60 percentage points higher than the average 37 percent all-others duty rate applied to market economy exporters of the same products. See, Ka Weng et. al., US anti-dumping actions against China: the impact of China's entry into the World Trade Organization, 562 Rev. Int’l Pol. Econ, 567 (2010).
- 4.
See, Opening Statement by Ambassador Zhang Xiangchen as a part of the Oral Statement of China at the First Substantive Meeting of the Panel, European Union – Measures Related to Price Comparison Methodologies, WTO Doc. WT/DS516, (Dec. 6, 2017), http://wto2.mofcom.gov.cn/article/chinaviewpoins/201712/20171202684583.shtml.
- 5.
Section 15 (d) of China’s Protocol of Accession reads, “…..In any event, the provisions of subparagraph (a)(ii) shall expire 15 years after the date of accession……”, see, Protocol on the Accession of the People’s Republic of China, art.15(d), WTO Doc. WT/L/432, (Nov. 23, 2001) [hereinafter China’s Protocol of Accession]. It is noteworthy that between 2002 and the end of 2016, the United States had 292 anti-dumping orders in effect, of which 102 were imposed on imports from China. As of 2016 the United States imposed anti-dumping duties on 9.2 percent of imports from China. In comparison, anti-dumping covered only 2.1 percent of U.S. imports from the rest of the world. See, Chad P. Bown, ‘Steel, Aluminum, Lumber, Solar: Trump’s Stealth Trade Protection’, Policy Brief, PetersonInstitute For International Economics, (June 2017), at 3.
- 6.
See, 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 [hereinafter Anti-dumping Agreement]; Marrakesh Agreement Establishing the World Trade Organization, Annex 1A, 1869 U.N.T.S. 201 (1994), art. VI:1 [hereinafter GATT 1994].
- 7.
See, Request for Consultations by China, United States– Measures Related to Price Comparison Methodologies, WTO Doc. WT/DS515/1, (Dec. 12, 2016) [hereinafter US-China NME Consultations]; Request for Consultations by China, European Union – Measures Related to Price Comparison Methodologies, WTO Doc. WT/DS516/1 (Dec. 12, 2016) [hereinafter EU — China NME Consultations].
- 8.
See Third Party Submission of the United States, European Union – Measures Related to Price Comparison Methodologies WTO Doc. WT/DS516/l, (Nov. 21, 2017), https://ustr.gov/sites/default/files/enforcement/DS/US.3d.Pty.Su.pdf.
- 9.
Memorandum from Leah Wils-Owens, to Gary Taverman, China’s Status as a Non-Market Economy (U.S. Dep’t Com., Oct. 26, 2017), https://enforcement.trade.gov/download/prc-nme-status/prc-nme-review-final-103017.pdf. [hereinafter China NME Memorandum] Also see, Certain Aluminum Foil From the People’s Republic of China: Notice of Initiation of Inquiry Into the Status of the People’s Republic of China as a Nonmarket Economy Country Under the Anti-dumping and Countervailing Duty Laws, 82 Fed. Reg. 62, 16162 (U.S. Dep’t Com., Mar. 29, 2017).
- 10.
The provisions on anti-dumping in the Protocol of Accession of Socialist Republic of Vietnam mirror those in China’s Protocol of Accession. See, Protocol of Accession of Socialist Republic of Vietnam, WTO Doc. WT/L/662 (Nov. 15, 2006) [hereinafter Vietnam’s Protocol of Accession].
- 11.
EU — China NME consultations, supra note 7.
- 12.
US — China NME consultations, supra note 7.
- 13.
See Article 255 (a) (i) of Vietnam’s Protocol of Accession which states:
“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 Vietnamese prices or costs for the industry under investigation in determining price comparability.”
Vietnam’s Protocol of Accession, supra note 10, art. 255 (a)(i).
- 14.
See infra section 2.3, for a discussion on the Market Oriented Industry (MOI) test under U.S. Anti-dumping law.
- 15.
See generally United States Census Bureau, U.S. Trade in Goods by Country, https://www.census.gov/foreign-trade/balance/index.html.
- 16.
See, Judith H. Bello et. al., ‘Searching for “Bubbles of Capitalism”: Application of the U.S. Anti-dumping and Countervailing Duty Laws to Reforming Nonmarket Economies’, 25 Geo. Wash. J. Int’l l & econ., 669 (1992). The author notes China’s exports constituted 66.7 percent of all NME exports to the United States in 1984 which jumped to 87.6 percent in 1990 and 89.5 percent in the first half of 1991. This led to a flurry of new AD cases against China. See, Mark E. Manyin, The Vietnam-U.S. Normalization Process, CRS Issue brief for Congress, (Aug. 15, 2003), http://www.usvtc.org/info/reports/CRS-Normalization%20Process%20Aug03.pdf. In the case of Vietnam the entry into force of the Bilateral Trade Agreement (BTA) on December 10, 2001 normalizing trade relations between the United States and Vietnam led to a sharp rise in U.S.-Vietnam trade. Trade between the countries doubled from its 2001 value to over $2.9 billion in 2002. Vietnam captured most of that trade and the trade deficit, which was $632 million in 2001 increased to $1.8 billion in 2002. Vietnam’s exports of catfish increased from over 3 million MT in 1999 to nearly 22 million MT in 2002, capturing almost 20 percent of the U.S. market. This led to the first instance of anti-dumping duties being imposed against Vietnam. See, Notice of Anti-dumping Duty Order: Certain Frozen Fish Fillets from the Socialist Republic of Vietnam, 68 Fed. Reg. 47909 (U.S. Dep’t of Com., Aug. 12, 2003). There was also an increase in imports of Vietnamese shrimp in that period with Vietnam being the fourth-largest foreign supplier of shrimp in 2002. This led to the initiation of the anti-dumping investigation and imposition of duties on shrimp from Vietnam. See, Institution of Anti-dumping Investigations and Scheduling of Preliminary Phase Investigations: Certain Frozen or Canned Warmwater Shrimp and Prawns from Brazil, China, Ecuador, India, Thailand, and Vietnam, 69 Fed. Reg. 1301 (U.S., Int’l. Trade Com., Jan. 8, 2004); Final Determination of Sales at Less Than Fair Value: Certain Frozen and Canned Warmwater Shrimp From the Socialist Republic of Vietnam, 69 Fed. Reg. 71005 (U.S. Dep’t of Com.,Dec. 8, 2004).
- 17.
Anti-dumping Act of 1921, Ch. 14 .§ 201–12, Pub. L. No 67-10, 42 Stat. 9, 11–15. See, Donald L. Cuneo et.al., ‘Roadblock to Trade: The State-Controlled Economy Issue in Anti-dumping Law Administration’, 5(2) Fordham. Int’l l. J. 277, 282 (1982).
- 18.
The Treasury Department used to handle anti-dumping cases before the authority was turned over to the Department of Commerce in the late 1970s.
- 19.
Cuneo et.al., supra note 17, at 282, 284.
- 20.
See, Article VI – Proposals by the Czechoslovakia Delegation, Revision, WTO Doc. W.9/86/Rev.1, (Dec. 21, 1954).
- 21.
Paragraph 2 of Ad Article VI states as follows:
“It is recognized that, in the case of imports from a country which has a complete or substantially complete monopoly of its trade and where all domestic prices are fixed by the State, special difficulties may exist in determining price comparability for the purpose of paragraph 1, and in such cases importing countries may find it necessary to take into account the possibility that a strict comparison with domestic prices in such a country may not always be appropriate.”
GATT 1994, supra note 6, Ad Art. VI, ¶ 2. See also Sub-Group III-A of Review Working Party III to Trade other than Restrictions or Tariffs, Final Report of Sub-Group III-A, GATT Doc. W.9/220 (Feb. 22, 1955); Review Working Party III, Report of Review Working Party III to Trade other than Restrictions or Tariffs, GATT Doc. W.9/220 (Feb 22, 1955), WTO Doc. L/334 (March 3, 1955).
- 22.
Cuneo et. al., supra note 17, at 284.
- 23.
Bicycles from Czechoslovakia: Determination of Sales at Less than Fair Value, 25 Fed. Reg. 6657 (U.S. Dep’t of Com., July 7, 1960).
- 24.
Id.
- 25.
Jalousie-Louvre Sized Sheet Glass from Czechoslovakia: Determination of Sales at Less than Fair Value, 27 Fed. Reg. 8457 (U.S. Treasury Dep’t., Aug. 15, 1962).
- 26.
Id.
- 27.
See Portland Cement from Poland, 28 Fed. Reg. 6660 (U.S. Treasury Dep’t., June 21, 1963) [hereinafter Portland Cement Case], where the U.S. Treasury Department relied on import prices from a Western European country because sales for home consumption in Poland were not made in the ordinary course of trade and Polish exports to third countries were considered to be inadequate.
- 28.
See Fur Felt Hoods, Bodies and Caps from Czechoslovakia: Fair Value Determination, 27 Fed. Reg. 6099 (U.S. Treasury Dep’t., Jun. 22, 1962) where the Treasury Department made a negative determination of dumping despite the use of third country import prices into the United States. The Treasury Department explained its inability to use domestic sales price on account of these sales being inadequate to calculate normal value but it does not explain why it dispensed with the other two alternatives for calculating foreign market value, namely sales to third countries and constructed value and relied instead on import prices from third countries into the United States. See also Window Glass from Czechoslovakia: Determination of Sales at less than Fair Value, 29 Fed. Reg. 8381 (U.S. Treasury Dep’t., Sep. 21, 1964); Shoes from Czechoslovakia: Notice of Tentative Determination, 31 Fed. Reg. 1207 (U.S. Treasury Dep’t. Jan. 20, 1966); Fur Felt Hat Bodies from Czechoslovakia: Notice of Intent to Discontinue Investigation and to Make Determination that No Sales Exist Below Fair Value, 31 Fed. Reg. 15024 (U.S. Treasury Dep’t., Nov. 21, 1966).
- 29.
Cuneo et. al., supra note 17, at 288-290.
- 30.
Id., at 290.
- 31.
Id., at 291. The author notes that cases emerging between 1968 and 1974 presented the Treasury Department with little difficulty as the Department routinely employed uniform language in dumping determinations that the exporting country was a controlled economy. In such cases, price comparisons would be made between the purchase price (export price) and either a home consumption price for that product in a non-state controlled country or the product’s export price from such non-state controlled country to the United States or other countries. The determinations however gave no indication if the Treasury Department had carried out an analysis that the country or sector under examination was state controlled.
- 32.
Id., at 292.
- 33.
Electric Golf Carts from Poland: Determination of Sales at Less Than Fair Value, 40 Fed. Reg. 25497 (U.S. Treasury Dep’t. Jun. 16, 1975). In this case, constructed value of golf carts in Canada initially provided the basis for the normal value. But when the Canadian producer stopped producing golf carts, the Treasury Department no longer had a basis for verifying the foreign market value for the Polish manufacturer by reference to the Canadian market economy manufacturer.
- 34.
See, Electric Golf Carts from Poland: Preliminary Results of Anti-dumping Duty Administrative Review, 56 Fed. Reg. 64239 (Dec. 9, 1991). See also, Bello et. al., supra note 16, at 675.
- 35.
See, Bello et. al., supra note 16, at 675.
- 36.
Id. The U.S. domestic industry resisted this approach stating that if in the first instance prices and costs from controlled economies were unreliable, so were the combination of factors of production, since they were based on unreliable price and cost relationships. Despite U.S. industry objections the regulations were adopted.
- 37.
See, Robert H. Lantz, ‘The Search for Consistency: Treatment of Nonmarket Economies in Transition under United States Anti-dumping and Countervailing Duty Laws’, 10 Am. U. Int’l l. Rev. 1004 (1995). The article describes the passage of the Trade Agreements Act of 1979 which codified the factors of production methodology. At this time, authority for administering the dumping aspects of anti-dumping law was handed over to Department of Commerce from the Treasury Department. Soon, USDOC issued regulations outlining the hierarchy of methods for determining normal value in investigations involving state controlled economies providing that normal value should first be calculated based on home market prices in a surrogate country, then by relying on export prices for the merchandise when shipped from the surrogate, third, where accurate prices were not available, by relying on constructed value of such merchandise in a surrogate country and finally by identifying the factors of production of the NME and valuing the factors on the basis of prices in a surrogate country.
- 38.
See Natural Menthol from the People’s Republic of China: Final Determination of Sales at Less Than Fair Value, 46 Fed. Reg. 24614 (U.S. Dep’t Com., May 1, 1981) [hereinafter Natural Menthol Case].
- 39.
See also, Bello et. al., supra note 16, at 684–685. Congress mandated the USDOC to conduct a study on the market orientation of the PRC economy. In the study the USDOC noted that between 1979 to 1988 China had undertaken many market oriented reforms including a reduction in the scope of central planning, greater integration into the world economy and reforms in enterprise management and ownership. The USDOC also noted that while Congress should modify U.S. anti-dumping law to accommodate a sectoral analysis for centrally planned economies in transition, it was skeptical that such analysis was possible under the law as it was then without further guidance on factors to consider for such analysis.
- 40.
Natural Menthol Case, supra note 38, at 24614. See also, Cuneo et. al., supra note 17, at 297.
- 41.
See also, Cuneo et. al., supra note 17, for a detailed review of submissions made by the PRC menthol producer arguing that state controls on the PRC agriculture sector were minimal. The USDOC observed that while purchase and sales of menthol in the PRC were based on market considerations, land and labor, the major factors of production for menthol were subject to extensive state controls. Incidentally Paraguay, the chosen surrogate country also maintained state controls on menthol such as state set minimum export prices and dual exchange rate system which ironically did not exist in the PRC. See also, Joseph P. Hornyak, Treatment of Dumped Imports from Nonmarket Economy Countries, 15 Md. J. Int’l L. 23, 37–43 (1991), where the author discusses cases from U.S.S.R and Romania which outline the USDOC’s thinking at the time, which reflected a preference for a macroeconomic approach, i.e. evaluating whether an economy was controlled at the national level rather than at the sectoral level.
- 42.
Natural Menthol Case, supra note 39, at 24615.
- 43.
Petroleum Wax Candles from the People’s Republic of China: Final Determination of Sales at Less than Fair Value, 51 Fed. Reg. 25085 (U.S. Dep’t Com., July 10, 1986), at 25086 [hereinafter Petroleum Wax Candles Determination]. The USDOC held that the PRC economy was state controlled based on an analysis of the following factors (i) degree of government ownership of the factors of production (ii) degree of centralized control over allocation of resources or inputs (iii) degree of government control over output and (iv) the relative convertibility of the country’s currency and degree of government control over trade.
- 44.
Id. The USDOC’s initial choice for a surrogate country would have been either of Egypt, India, Indonesia, Morocco Pakistan, Philippines or Thailand. However the USDOC received next to no replies from manufacturers in these countries. Chinese exporters suggested the USDOC use the factors of production methodology. The USDOC agreed and even received information on the PRC producers’ factors of production. But it had to abandon the methodology as information to value the factors from the identified surrogate counties was not available.
- 45.
See, 19 USC § 1677b(c)(1)(B). The Omnibus Trade and Competitiveness Act of 1988 also provided for the first time a definition of a NME country, provided criteria for making the NME determination and further provided that such determination would not be judicially reviewable. See § 1677 (18) (A), (B) and (D). See also, Bello et. al., supra note 17, at 691.
- 46.
Up until then the factors of production methodology was viewed as a means of last resort and used sparingly. In the anti-dumping investigation of Chloropicrin from the PRC the USDOC was unable to locate an appropriate surrogate country and therefore had to resort to the use of the factors of production methodology where PRC factors for raw materials, labor, energy and factory overheads were valued based on data from Indian chemical companies. Japan and France, the only non-state controlled economies apart from the United States that manufactured chloropicrin were considered unsuitable. See Chloropicrin from the People’s Republic of China: Final Determination of Sales at Less than Fair Value, 49 Fed. Reg. 5982 (U.S. Dep’t Com., February 16, 1984).
The change in moving away from the surrogate methodology to the factors of production methodology was also prompted by criticism of the surrogate methodology, including that it led to inflated margins, that it produced arbitrary and unpredictable results against exporters from controlled economies and that it burdened the USDOC with finding suitable surrogates that provided reliable and verifiable data. See, Lantz, supra note 37 at 1004-1007. See also, Bello et. al., supra note 16, at 679–686.
- 47.
See, Oscillating Fans and Ceiling Fans from the People’s Republic of China: Preliminary Determination of Sales at Less than Fair Value, 56 Fed. Reg. 25664 (U.S. Dep’t Com., June 5, 1991) [hereinafter Oscillating Fans Case].
- 48.
Bello et. al., supra note 16, at 692, 693.
- 49.
Chrome Plated Lug Nuts from the People’s Republic of China: Final Determination of Sales at Less Than Fair Value, 56 Fed. Reg. 46153 (U.S. Dep’t Com., Sep. 10, 1991) [hereinafter Lug Nuts Determination].
- 50.
Id., at 46155.
- 51.
Id., at 46156. It is interesting that in the Petroleum Wax Candles Determination supra note 43, the USDOC summarily rejected input costs for paraffin wax on the ground that it was a quota product despite submissions that it was purchased at market prices by the candle producers. Yet a similar fact situation in the Lug Nuts determinations led to a different result.
- 52.
See, Lantz supra note 37, at 1040–1041. Unlike the U.S. anti-dumping laws, U.S. CVD laws had not been traditionally applied to nonmarket economies. This was because the USDOC was of the opinion that there was no adequate way to measure market distortions caused by subsidies in an economy that is not based on market principles. The USDOC’s view was that countervailable subsidies could not conceptually speaking, be found within a nonmarket economy and because all economic activity in NMEs was centrally controlled, there existed no way to practically disaggregate government action in such a way as to identify the exceptional action that was a subsidy. The USDOC’s determination to not initiate CVD cases against NMEs was upheld by the U.S. Court of Appeals for the Federal Circuit which held that subsidies could not be said to apply to NMEs. As a result there were no CVD investigations against NMEs until 1991, i.e. until the Oscillating Fans Case and the Lug Nuts determination. In those cases though the USDOC refused to find that the fan or lug nuts industries were “bubbles of capitalism”, several input prices were held to be market oriented. This provided the opening for petitioners to allege that though the economy as a whole was controlled there was enough market based reforms so that subsidies could indeed be found and quantified for certain products. See, Jane M. Smith, ‘U.S. Trade Remedy Laws and Nonmarket Economies: A Legal Overview’, CRS Report for Congress, (Jan. 31, 2013), at 6,7,8,9. The author also provides a good historical overview on how CVD law came to be applied to NMEs.
- 53.
Sulfanilic Acid from the People’s Republic of China: Final Determination of Sales at Less than Fair Value, 57 Fed. Reg. 9409 (U.S. Dep’t Com., March 18, 1992).
- 54.
See also, K. William Watson, ‘Will Nonmarket Economy Methodology Go Quietly into the Night? U.S. Anti-dumping Policy towards China after 2016’, Policy Analysis, Cato Institute, No. 763, (2014) at 6.
- 55.
See, Lantz, supra note 37, at 1042. See also, Chrome Plated Lug Nuts From the People's Republic of China: Amendment to Final Determination to Sales at Less than Fair Value and Amendment to Anti-dumping Duty Order, 57 Fed. Reg. 15052 (U.S. Dep’t Com., Apr. 24, 1992).
- 56.
See Certain Color Television Receivers from the People’s Republic of China: Final Determination of Sales at Less than Fair Value and Negative Final Determination of Critical Circumstances, 69 Fed. Reg. 20594 (U.S. Dep’t Com., Apr. 16, 2004). In this case respondents accounted for about 79.6 percent of the production which was held to be insufficient to represent the industry.
- 57.
See, Lantz, supra note 37, at 1047. The author discusses the preliminary findings in Certain Helical Spring Lock Washers from China case, where the PRC made substantial effort to prove that the spring lock washer industry operated on market principles but fell short due to the strict MOI criteria.
- 58.
Joseph A. Laroski, Jr., ‘NMES: A Love Story Nonmarket and Market Economy Status Under U.S. Anti-dumping Law’, 30 Law & Pol’y Int’l Bus. 375 (1999). See also, K. William Watson, supra note 54, at 6.
- 59.
See, China Working Party Report, supra note 1, at 1.
- 60.
Ibid., at 29–30. China had expressed concern with anti-dumping measures imposed by various countries including methodologies for price comparison. The Working Party noted China’s concerns and observed that in applying Sect. 15 (a)(ii) of the Accession Protocol, countries that did not have established anti-dumping practice should make best efforts to employ a methodology which is similar to one that takes into account, “the prices or costs in one or more market economy countries that were significant producers of comparable merchandise and that either were at a level of economic development comparable to that of China or were otherwise an appropriate source for the prices or costs to be utilized in light of the nature of the industry under investigation….” The China Working Party report therefore clearly shows that NME methodologies already in use by the USDOC would be permissible within the meaning of Sect. 15 (a)(ii) of China’s Protocol of Accession.
- 61.
See China’s Protocol of Accession, supra note 5, art. 15(a)(ii). Art. 15 (a)(ii) provides:
“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.”
China has claimed that NME treatment should have ended by December 11, 2016 as per Sect. 15(d) which reads:
“….In any event, the provisions of subparagraph (a)(ii) shall expire 15 years after the date of accession……” (emphasis added). See China’s Protocol of Accession, supra note 5, art. 15(d). The United States and European Union disagree with this interpretation resulting in WTO disputes against the two by China. See, US-China NME consultations, supra note 5 and EU — China NME consultations, supra note 7.
- 62.
China’s Protocol of Accession, supra note 5, art. 15(a)(i) states as follows:
“(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:
(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.” See also, Watson, supra note 54, at 7.
- 63.
See, Working Party on the Accession of Vietnam, Report of the Working Party on the Accession of Vietnam, WTO Doc. WT/ACC/VNM/48 (Oct. 27, 2006), art. 255.
- 64.
Section 15(d) of the Chinese Accession Protocol states,
“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)
China’s Protocol of Accession, supra note 5, art. 15(d). It is to be noted Article 255 (d) of the Vietnam’s Protocol of Accession, supra note 10 is substantially similar.
- 65.
See, 19 USC 1677 (18)(A). It states “[T]he term “nonmarket economy country” means any foreign country that the administering authority determines does not operate on market principles of cost or pricing structures, so that sales of merchandise in such country do not reflect the fair value of the merchandise”.
- 66.
19 USC 1677 (18)(B). See also, § 1677 (18)(C) where a determination that a foreign country is a nonmarket economy country remains in effect until revoked. The USDOC can make a NME determination with respect to any foreign country at any time. The evaluation is made on an economy wide level as opposed to at an industry or company level.
- 67.
China NME Memorandum, supra note 9.
- 68.
Certain Aluminum Foil from the People’s Republic of China: Notice of Initiation of Inquiry into the Status of the People’s Republic of China as a Nonmarket Economy Country under the Anti-dumping and Countervailing Duty Laws, 82 Fed. Reg. 16162, (U.S. Dep’t Com., March 29, 2017).
- 69.
China NME Memorandum supra note 9, at 5.
- 70.
Id., at 31.
- 71.
Id., at 51.
- 72.
Id., at 115.
- 73.
Id., at 7.
- 74.
Id., at 7.
- 75.
Memorandum for David Spooner from Shauna Lee-Alaia, Anti-dumping Duty Investigation of Certain Lined Paper Products from the People’s Republic of China (“China”) China’s status as a non-market economy (“NME”), A- 570-901 (Aug. 30, 2006).
- 76.
See, Certain Frozen Fish Fillets from the Socialist Republic of Vietnam: Notice of Final Anti-dumping Duty Determination of Sales at Less Than Fair Value and Affirmative Critical Circumstances, 68 Fed. Reg. 37116 (June 23, 2003). This was the first anti-dumping investigation to be initiated against Vietnam since the signing of the Bilateral Trade Agreement (BTA) between the United States and Vietnam on July 13, 2000, which went into force on December 10, 2001. See, Michael F. Martin, “U.S.-Vietnam Economic and Trade Relations: Issues for the 114th Congress”, Cong. Research. Serv., R41550, (2016).
- 77.
See, Memorandum for Faryar Shirzad from Shauna Lee-Alaia, Anti-dumping Investigation of Certain Frozen Fish Fillets from the Socialist Republic of Vietnam- Determination of Market Economy Status, A-552-801, (Nov. 8, 2002) at 8 [hereinafter Vietnam NME Memorandum]. Vietnam’s NME status has not changed.
- 78.
Id., at 11.
- 79.
Id., at 16.
- 80.
Id., at 22.
- 81.
Id., at 27.
- 82.
Id., at 31.
- 83.
See, Memorandum to Gary Taverman from James Maeder, Certain Frozen Fish Fillets from the Socialist Republic of Vietnam: Decision Memorandum for the Preliminary Results, Preliminary Determination of No Shipments, and Partial Rescission of the 2015–2016 Anti-dumping Duty Administrative Review, A-552-801, (U.S. Dep’t Com., August 31, 2017). See also, Certain Frozen Fish Fillets from the Socialist Republic of Vietnam: Preliminary Results, Preliminary Determination of No Shipments, and Partial Rescission of the Anti-dumping Duty Administrative Review; 2015–2016, 82 Fed. Reg. 42785, (U.S. Dep’t Com., Sep. 12, 2017).
- 84.
19 USC §1677b (c) (1)(B).
- 85.
19 USC §1677b (c) (3).
- 86.
19 USC §1677b (c) (4).
- 87.
U.S. Dep’t Com., Anti-dumping Methodologies in Proceedings Involving Non–Market Economy Countries: Surrogate Country Selection and Separate Rates, 72 Fed. Reg. 13246 (2007).
- 88.
USDOC Anti-dumping Manual, supra note 2, Chapter “Nonmarket Economies”, at 12.
- 89.
19 CFR § 351.408(c) (1) and (2).
- 90.
Lantz, supra note 37, at 1004–1007. See also, Bello et. al., supra note 16, at 679–686.
- 91.
USDOC Anti-dumping Manual, supra note 2, Chapter “Nonmarket Economies”, at 14.
- 92.
19 CFR§ 351.408(c) (1). This reflects the limited application of the “bubbles of capitalism” approach considered by the USDOC in the Lug Nuts determination. See, Lug Nuts Determination, supra note 49.
- 93.
19 CFR §351.408(c) (3).
- 94.
19 CFR §351.408(c) (4).
- 95.
USDOC Anti-dumping Manual, supra note 2, Chapter “Nonmarket Economies”, at 12.
- 96.
A 2006 study by the Government Accountability Office (GAO) found that the average anti-dumping duty rates imposed on Chinese (NME) exporters’ between 1980–2004 have been significantly higher than those imposed on market economy exporters of the same products. Taking all rates into consideration (including those calculated for individual companies, weighted averages of these rates, and country-wide rates applied to China) the average rate applied to Chinese companies in the 25 cases that were examined was about 67 percent—over 20 percentage points higher than the average rate of 44 percent applied to market economy companies. See, U.S. Government Accountability Office Report to Congressional Committees, US–China Trade: Eliminating Non-Market Economy Methodology would Lower Anti-dumping Duties for Some Chinese Companies, (Jan. 2006), at 19 http://www.gao.gov/new.items/d06231.pdf.
- 97.
Lantz, supra note 37, at 1007.
- 98.
Lantz, supra note 37, at 1008. For instance in the anti-dumping investigation concerning Certain Frozen Fish Fillets from Vietnam, where Bangladesh was chosen as a surrogate country for purposes of valuing factors of production, Vietnamese officials and farmers pointed out that the Vietnamese industry had a natural comparative advantage in that they ran fully-integrated businesses. This was in stark contrast to the fish industry in Bangladesh where none of the catfish companies were fully integrated. See, Joshua Startup, “From Catfish To Shrimp: How Vietnam Learned To Navigate The Waters Of “Free Trade” As A Non-Market Economy”, 90 Iowa L. Rev. 1963, 1969 (May, 2005).
- 99.
See, 19 CFR § 351.107 (d) which reads: “Rates in anti-dumping proceedings involving nonmarket economy countries. In an anti-dumping proceeding involving imports from a nonmarket economy country, “rates” may consist of a single dumping margin applicable to all exporters and producers.” (original emphasis).
- 100.
See, Sparklers from the People's Republic of China: Final Determination of Sales at Less Than Fair Value, 56 Fed. Reg. 20588 (U.S. Dep’t Com., May 6, 1991), [hereinafter Sparklers Determination] as modified in Silicon Carbide from the People's Republic of China: Final Determination of Sales at Less Than Fair Value, 59 Fed. Reg. 22585, 22587 (U.S. Dep’t Com., May 2, 1994) [hereinafter Silicon Carbide Determination].
- 101.
See, U.S. Dep’t Com., Department of Commerce’s Separate-Rates Practice and Application of Combination Rates in Anti-dumping Investigations involving Non-Market Economy Countries, Enforcement and Compliance Policy Bulletins, (Apr. 15, 2005) https://enforcement.trade.gov/policy/bull05-1.pdf [hereinafter USDOC Separate Rate Practice Bulletin].
- 102.
See, Sparklers Determination, supra note 100.
- 103.
See, the Silicon Carbide Determination, supra note 100.
- 104.
The separate rate applications for China and Vietnam require detailed information on company structure, affiliations and shareholder information. Responses are due 30 days from the date of initiation of the investigation. See Separate Rate Application and Required Supporting Document for the Socialist Republic of Vietnam, https://enforcement.trade.gov/nme/sep-rate-files/app-20150323/srv-sr-app-20150416.pdf; Separate Rate Application and Required Supporting Document for the People’s Republic of China, https://enforcement.trade.gov/nme/sep-rate-files/app-20150323/prc-sr-app-20150323.pdf.
- 105.
Where mandatory respondents do not co-operate (whether from a NME or market economy country), such respondents receive the adverse facts available rate.
- 106.
See USDOC Separate Rate Practice Bulletin, supra note 101.
- 107.
Where a mandatory NME respondent has received a rate of zero or a de minimis rate, or its rate is based entirely on facts available because it did not cooperate, such company’s rate is excluded when calculating the average rate for the NME non-mandatory respondent that qualifies to receive a separate rate. See USDOC Anti-dumping Manual, supra note 2, Chapter 10 – Nonmarket Economies.
- 108.
Daniel Ikenson, Nonmarket Nonsense: U.S. Anti-dumping Policy toward China, Trade Briefing Paper, CATO INSTITUTE, (Mar. 27, 2005).
- 109.
See, 19 USC §1673b(d) and §1673d(c) (5). See also, Tomer Broude et al, ‘US - Anti-Dumping Measures on Certain Shrimp from Viet Nam: A Stir-Fry of Seafood, Statistics, and Lacunae’, 12(2) World Trade Review 13 (2013).
- 110.
The all-others-rate for non-investigated market economy exporters has been significantly lower. “China and Malaysia were the targets of a recent case involving Color Television Receivers. The countrywide rate for uninvestigated Chinese companies that did not qualify for the Section A rate was 78.45 percent, while the rate for uninvestigated Malaysian firms was 0.75 percent. In a case involving Collated Roofing Nails, Chinese, Korean, and Taiwanese exporters were investigated. The countrywide rate for China was 118.41 percent, while the average all-others rate for Korea and Taiwan was 2.68 percent. In Structural Steel Beams, the countrywide rate for China was 89.17 percent, but the average all-others rate was only 6.14 percent for the exporters in six market economies.” Ikenson, supra note 108, at 7.
- 111.
Id., at 8. “An analysis of final DOC anti-dumping decisions between July 1995 and May 2004 reveals that 439 out of 442 companies representing approximately 50 industries, successfully demonstrated an absence of government control…” .
- 112.
Anti-dumping Agreement, supra note 6, art. 2.1.
- 113.
Anti-dumping Agreement, supra note 6, art. 2.2.
- 114.
China NME Memorandum, supra note 9.
- 115.
See, Certain Oil Country Tubular Goods from the Republic of Korea: Final Results of Anti-dumping Duty Administrative Review; 2014–2015, 82 Fed. Reg. 18105 (U.S. Dep’t Com., April 17, 2017).
- 116.
See, Certain Oil Country Tubular Goods from the Republic of Korea: Preliminary Results of Anti-dumping Duty Administrative Review; 2014–2015, 81 Fed. Reg. 71074 (U.S. Dep’t Com., Oct. 14, 2016). For Nexteel Co. Ltd., the preliminary dumping margin was 8.04%, while for SeAH Steel Corp. it was at 3.80%. In the final determination Nexteel’s margin was adjusted upward to 24.92%, while SeAH’s was adjusted down to 2.76%.
- 117.
See, ‘Lawyers Rip White House For Intervening In Dumping Review’, Law360, https://www.law360.com/articles/905398/lawyers-rip-white-house-for-intervening-in-dumping-review.
- 118.
19 U.S.C. § 1677(15).
- 119.
19 U.S.C. § 1677b(b)(1).
- 120.
19 U.S.C. § 1677b(f)(2).
- 121.
19 U.S.C. § 16177 (15) (C) provides “Situations in which the administering authority determines that the particular market situation prevents a proper comparison with the export price or constructed export price.”.
- 122.
19 U.S.C. § 1677b(e).
- 123.
Memorandum from Ronald Lorentzen to James Maeder, 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, (U.S. Dep’t Com., April 10, 2017), at 40 [hereinafter Korea OCTG Memorandum].
- 124.
Id.
- 125.
Id., at 40, 41.
- 126.
See, 19 CFR §351.523 which contain regulations on upstream subsidies.
- 127.
Korea OCTG Memorandum, supra note 123, at 41.
- 128.
Id. Note that with respect to the second and fourth factor, the USDOC found excess capacity in Chinese hot rolled steel had led to depressed prices in the Korean market. As for electricity while the largest electricity supplier was a government entity, it did not address whether such control led to a distortion in electricity prices.
- 129.
Ibid., at 42.
- 130.
Ibid., at 43.
- 131.
“…Commerce may determine that home market sales are inappropriate as a basis for determining normal value if the particular market situation would not permit a proper comparison. The Agreement does not define “particular market situation,” but such a situation might exist where a single sale in the home market constitutes five percent of sales to the United States or where there is government control over pricing to such an extent that home market prices cannot be considered to be competitively set. It also may be the case that a particular market situation could arise from differing patterns of demand in the United States and in the foreign market. For example, if significant price changes are closely correlated with holidays which occur at different times of the year in the two markets, the prices in the foreign market may not be suitable for comparison to prices to the United States.” (emphasis added)
U.S. Dep’t of Com., The Statement of Administrative Action, https://enforcement.trade.gov/regs/uraa/saa-ad.html.
- 132.
See, Notice of Final Determination of Sales at Less than Fair Value: Fresh Atlantic Salmon from Chile, 63 Fed. Reg 31411 (U.S. Dep’t Com., June 9, 1998) [hereinafter Chile Salmon Investigation].
- 133.
See, Issues and Decision Memorandum for the Final Results of New Shipper Review of the Anti-dumping Duty Order on Certain Frozen Warmwater Shrimp from Ecuador, 71 Fed. Reg. 54977, (U.S. Dep’t Com., Sep. 20, 2006) .
- 134.
See, ‘U.S. 'particular market situation' ruling on Korean steel sparks concern at WTO’, Inside U.S. Trade (May 2, 2017), https://insidetrade.com/daily-news/us-particular-market-situation-ruling-korean-steel-sparks-concern-wto. Note that in the OCTG case the USDOC had already found that both mandatory respondents did not have sufficient home market sales to use as the basis of normal value. One respondent also lacked third country sales, and therefore USDOC used constructed value for this respondent. For the other respondent the USDOC used constructed value, but also used the respondents’ data for its sales to Canada (third country). See, 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, (U.S. Dep’t Com., Apr. 10, 2017), at 17 and 20. See also, Mikyung Yun, ‘The Use of “Particular Market Situation” Provision and its Implications for Regulation of Anti-dumping’, 21(3) J. East Asia Econ. Integration 159 (2017). This article discusses past decisions of the USDOC where it rejected petitioners’ allegations of the existence of a “particular market situation” on account of government control in the product market. The article notes that in Certain Durum Wheat and Hard Red Spring Wheat from Canada, though the Canadian Wheat Board was a government entity that had a monopoly over the buying and selling of wheat in the domestic market, USDOC did not consider the evidence on record to show that the Board’s control was so extensive that prices were not competitively set. This even when there was a parallel CVD investigation which found the existence of subsidies. It notes another case, Certain Cold Rolled and Corrosion Resistant Carbon Steel Flat Products from Korea, where the USDOC rejected allegations that Korean steel prices were unreliable due to the presence of the government control. The petitioners cited flat steel prices as indication of government influence over prices. The USDOC rejected these arguments on grounds that the evidence was not convincing enough. Past practice of the USDOC indicates it had set a high standard for the type of evidence of government control it would consider adequate before perfunctorily rejecting domestic sales prices.
- 135.
Memorandum from James Maeder to Gary Taverman, Issues and Decision Memorandum for the Final Affirmative Determination in the Anti-dumping Duty Investigation of Steel Concrete Reinforcing Bar from Taiwan, (U.S. Dep’t Com., Jul. 20, 2017), at 7.
- 136.
Id., at 10.
- 137.
Id., at 7,8,9.
- 138.
Certain Softwood Lumber Products From Canada: Final Affirmative Countervailing Duty Determination, and Final Negative Determination of Critical Circumstances, 82 Fed. Reg. 51806 (U.S. Dep’t Com., Nov. 8, 2017).
- 139.
Id. The USDOC also held that given its negative particular market determination regarding the bioenergy programs, the allegations regarding electricity and stumpage were moot.
- 140.
See Decision Memorandum for Preliminary Results of the 2014–2016 Anti-dumping Duty Administrative Review of Certain Steel Nails from the Republic of Korea, (U.S. Dep’t Com., Jul. 31 2017) at 14, 15. Normal value for most sales by mandatory respondents was derived from their respective home market sales. However the USDOC found that the mandatory respondents had more than 20 percent of their home sales at prices at less than cost of production. For these below-cost sales, normal value was based on the constructed value method.
- 141.
Memorandum from James Maeder to Gary Taverman, Decision Memorandum for the Final Results of the 2014–2016 Administrative Review of the Anti-dumping Duty Order on Certain Steel Nails from the Republic of Korea, (U.S. Dep’t Com., Jan. 19, 2018) at 7–13.
- 142.
Biodiesel from Argentina: Preliminary Affirmative Determination of Sales at Less Than Fair Value, Preliminary Affirmative Determination of Critical Circumstances, in Part, 82 Fed. Reg. 50391 (U.S. Dep’t Com., Oct. 31, 2017) .
- 143.
Biodiesel from Indonesia: Preliminary Affirmative Determination of Sales at Less Than Fair Value, 82 Fed. Reg. 50379 (U.S. Dep’t Com., Oct. 31, 2017) .
- 144.
See, Argentina Biodiesel at 18 and Indonesia Biodiesel at 17, infra n. 142 and 143.
- 145.
Memorandum from James Maeder to Gary Taverman, Decision Memorandum for the Preliminary Determination in the Less-Than-Fair-Value Investigation of Biodiesel from Argentina, (U.S. Dep’t Com., Oct. 19, 2017) at 19 [hereinafter Argentina Biodiesel].
- 146.
Memorandum from James Maeder to Gary Taverman, Decision Memorandum for the Preliminary Determination in the Less-Than-Fair-Value Investigation of Biodiesel from Indonesia, (U.S. Dep’t Com., Oct. 19, 2017) at 18 [hereinafter Indonesia Biodiesel].
- 147.
Argentina Biodiesel, supra note 145, at 24; Indonesia Biodiesel, supra note 146, at 23.
- 148.
The DOC stated, “…prior to the TPEA, Sect. 773(a)(1)(B)(ii)(III) of the Act provided that the Department would rely on a third-country market if “the administering authority does not determine that the particular market situation in such other country prevents a proper comparison with the export price or constructed export price.” (emphasis added). The TPEA removed reference to “in such other country” from this provision. Therefore, we find that if the Department has determined that a PMS exists in the home market, it is not required to examine third-country market sales, and may instead rely on CV.” See, Argentina Biodiesel, supra note 146, at 23 and Indonesia Biodiesel, supra note 146, at 22.
See also, 19 CFR § 351.404(f) which establishes a preference for calculation of normal value by way of sales to third country as opposed to constructed value if information is available and verifiable. See also 19 CFR 351.404(c) which establishes sales in a third country as the preferred basis to calculate normal value where there are insufficient sales of the foreign like product in the exporting country and thus the market is not viable. In August of 2016 the USDOC issued a proposed rule modifying this hierarchy for purposes of normal value calculation. It states,
“This modification would invert the preexisting order of preference that, where the exporting country does not constitute a viable market, the Department normally calculates normal value based on sales in a viable third country. The Department proposes this modification in light of certain advantages of constructed value over third country sales, such as availability of cost of production information and comparability to U.S. prices.”
See U.S. Dep’t Com., Modification of Regulations Regarding basis for Normal Value, 81 Fed.Reg. 58419 (Aug. 25, 2016).
- 149.
Indonesia Biodiesel, supra note 146, at 23. Double remedies or double counting of subsidization refers to a situation where a product is subject to both anti-dumping and countervailing duties and there is no adjustment to the dumping margin to account for the decrease in price of the product on account of subsidization. GATT Article VI:5, which states that an imported product may not be “subject to both anti-dumping and countervailing duties to compensate for the same situation of dumping or export subsidization” essentially recognizes the problem of double remedies but in the context of export subsidization. This may be because while domestic subsidies presumably lower the price of the subject merchandise both in the home and the export markets, export subsidies, by contrast, benefit only exported merchandise by lowering the export price for the product and consequently increasing the dumping margin. Therefore imposing both an export-subsidy CVD and an anti-dumping duty, calculated with no adjustment for that CVD, would impose a double remedy specifically prohibited by Article VI:5. Domestic subsidies are assumed not to affect dumping margins, because they lower prices in both the export market and the domestic market of the exporting country equally. The Tariff Act 1930 (19 USC 1677(c) (1)(C)) addresses this issue by requiring that export price (and constructed export price) be adjusted by increasing it by the amount of an export subsidy found on the product in a CVD investigation. While the adjustment on the export side to account for export subsidization described may address double remedies in AD/CVD investigations involving goods of market economy countries, it does not address double remedies in AD/CVD investigations involving NME countries. This is because in the case of NME exporters, normal value is calculated on the basis of surrogate country data as opposed to the exporters own domestic prices, which are considered distorted due to government intervention and subsidization. Thus domestic price which incorporates the element of domestic subsidization is rejected for a third country non-distorted price. Yet when a parallel CVD investigation on the same product finds domestic subsidization and authorities do not adjust the normal value derived from surrogate country methodology to account for the subsidization, it can lead to double counting of the subsidization on the product or double remedies. See, Jane M. Smith, supra note 52, at 12, 13. China challenged the U.S. practice of imposing AD/CVD duties on products from NME countries at the WTO and was successful. The Appellate Body in denouncing that double remedies were permissible held that offsetting the same subsidization twice by the simultaneous imposition of anti-dumping duties based on NME methodology and countervailing duties is inconsistent with Article 19.3 of the SCM Agreement, which requires that, when a CVD is imposed on a product, it be levied “in the appropriate amount in each case.” See, Appellate Body Report, United States — Definitive Anti-Dumping and Countervailing Duties on Certain Products from China, ¶¶ 582, 583, WTO Doc. WT/DS379/AB/R (adopted Mar. 11, 2011). The United States amended the Tariff Act 1930 in response to the WTO case and provided that in the case of NME exporters where the normal value is derived from surrogate country costs and a CVD investigation finds countervailable subsidies, in such cases the dumping margin will be reduced to account for the countervailable subsidy. See, 19 USC 1677f-1(f)(C).
- 150.
Indonesia Biodiesel, supra note 146, at 23.
- 151.
19 USC 1677(c) (1)(C).
- 152.
19 USC 1677f-1(f)(C).
- 153.
Appellate Body Report, European Union — Anti-Dumping Measures on Biodiesel from Argentina, WTO Doc. WT/DS473/AB/R (adopted Oct. 6, 2016) [hereinafter EU — Biodiesel from Argentina (AB Report)].
- 154.
Article 2.2.1.1 of the Anti-dumping Agreement states:
2.2.1.1 For the purpose of paragraph 2, costs shall normally be calculated on the basis of records kept by the exporter or producer under investigation, provided that such records are in accordance with the generally accepted accounting principles of the exporting country and reasonably reflect the costs associated with the production and sale of the product under consideration. Authorities shall consider all available evidence on the proper allocation of costs, including that which is made available by the exporter or producer in the course of the investigation provided that such allocations have been historically utilized by the exporter or producer, in particular in relation to establishing appropriate amortization and depreciation periods and allowances for capital expenditures and other development costs. Unless already reflected in the cost allocations under this sub-paragraph, costs shall be adjusted appropriately for those non-recurring items of cost which benefit future and/or current production, or for circumstances in which costs during the period of investigation are affected by start-up operations. (emphasis added)
Anti-dumping Agreement, supra note 6, art. 2.2.1.1.
- 155.
Council Regulation 1225/2009, art. 2(5) 2009 O.J (L343/51) (EC).
- 156.
EU — Biodiesel from Argentina (AB Report), supra note 153, ¶ 6.35.
- 157.
Id., ¶¶ 6.18, 6.46.
- 158.
Id., ¶ 6.37.
- 159.
Id., ¶¶ 6.30, 6.37 and 6.39.
- 160.
Panel Report, European Union — Anti-Dumping Measures on Biodiesel from Indonesia, WTO Doc. WT/DS480/6 (adopted Feb., 28, 2018).
- 161.
The EU rejected Indonesian exporters’ input costs of crude palm oil because of an export tax on the same which the EU claimed made the oil available to domestic biodiesel producers at prices significantly lower than international prices. Id., ¶ 7.14.
- 162.
Id., ¶ 7.26. The Panel pointed out that it is well established that adopted panel and Appellate Body reports create legitimate expectations, and that the same legal issues should be resolved in the same way in subsequent cases, absent cogent reasons for finding differently.
- 163.
Id., ¶¶ 7.27, 7.28.
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Joshi, M. (2018). Shifting Sands: The Evolution and Future Course of U.S. Anti-dumping Law and Practice Against China and Vietnam. 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_8
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