Categorized | China

China Requests Consultation On 22 U.S. Countervailing Duty Orders

Share on FacebookTweet about this on TwitterShare on Google+Share on LinkedInShare on RedditDigg thisShare on StumbleUponBuffer this pagePin on PinterestShare on TumblrEmail this to someone

Reposted from the King and Spalding newsletter: Trade & Manufacturing Alert

*********

China Requests Consultation On 22 U.S. Countervailing Duty Orders

Lee Smith | July 2012 |Trade & Mfg Alert

On May 25, 2012. China requested consultations at the World Trade Organization (“WTO”) relating to 22 countervailing duty (“CVD”) investigations conducted by the United States. The challenged CVD cases are the investigations that were initiated by the United States other than the four already subject to WTO dispute settlement in United States – Definitive Anti-Dumping and Countervailing Duties on Certain Products from China (DS379). The products at issue in these investigations cover numerous industries, including paper, steel, and solar cells.

China’s request focuses primarily to the issue of the provision of manufacturing inputs for “less than adequate remuneration.” In all 22 cases, petitioners alleged that China provided inputs such as raw materials, land, and electricity for “less that adequate remuneration,” i.e., below a market benchmark price. These subsidy programs accounted for a large portion of each Chinese exporter’s total subsidy rate. In order to make a finding of unfair subsidization, the WTO requires that (1) a government or a “public body” make a financial contribution; (2) the provision of the input is specific to an industry or group of industries; and (3) the provision of the input provides a benefit when compared to a market benchmark. In past CVD cases, the U.S. Department of Commerce (“Commerce”) has found the company providing an input to be provided by a “public body” if the company is majority-owned by the Government of China. China challenged this approach in DS379. In that dispute, the WTO Appellate Body found that the majority-government-ownership standard was insufficient and that the United States must investigate whether the public bodies are “vested with governmental authority.” This finding is likely the basis for China’s new appeal.

Other aspects of the 22 CVD cases also are being challenged. China is challenging the sufficiency of the evidence used to make certain determinations, the use of out-of-country market benchmarks to value goods or services, and the use of “facts available” when the Government of China or the respondent in the investigation did not fully cooperate with Commerce’s information requests. China also is challenging whether restraints on the exportation of input materials could give rise to an illegal subsidy.

Under WTO procedures, China and the United States have 60 days to consult. Assuming that consultations do not resolve the dispute, China may then request the establishment of a panel to hear its claims before a dispute settlement panel.

2 Responses to “China Requests Consultation On 22 U.S. Countervailing Duty Orders”

  1. Bruce Bishop says:

    Why are we applying band-aids to bullet wounds? How long are we going to creep around China playing these useless games?

    China is warning us that, if we get serious about tariffs, they are going to come unwrapped. If that were to happen, Obama would pee down both legs and assume a fetal position.

    We will all be dead before China decides to “play fair.” Let’s give it up!

    “Balanced Trade,” as recommended by Warren Buffett in 2003, would close China out of the loop. We would simply stop buying their stuff and would have to start making it here again. That would create millions of new, high-paying manufacturing jobs and restore The American Dream. The additional tax revenue would help to balance our federal budget. Also, each manufacturing job results in 2.9 additional jobs in other sectors.

    http://en.wikipedia.org/wiki/Balanced_trade

  2. Tom T says:

    “In that dispute, the WTO Appellate Body found that the majority-government-ownership standard was insufficient and that the United States must investigate whether the public bodies are “vested with governmental authority.” This finding is likely the basis for China’s new appeal.”

    Wow! The WTO is Orwellian in its logic and should be dismantled. It is an enemy of democracy.

    In another from the article: “China also is challenging whether restraints on the exportation of input materials could give rise to an illegal subsidy.”

    It seems the WTO has about as much sense as our U.S. Trade Representative. The U.S. has to make China leave the WTO because it doesn’t follow its rules and questions basic assumptions that are the basis of the World Trade Organization.

    It looks like the WTO has been taken over by the oligarchs!

    Tom T.

Trackbacks/Pingbacks


Friends Don’t Let Friends Buy Imports

Sign up to receive periodic updates

Frequency