Tax-News.com: China Attacks US Over Trade Dispute Methodology

21 February 2013

During his regular press conference in Beijing on February 20, Shen Danyang, the spokesman for the Ministry of Commerce (MOC), used the measures being threatened against its exports of frozen warm-water shrimp to continue China?s complaint about the United States? imposition of both anti-dumping (ADs) and countervailing duties (CVDs) on its products.

Shen, when asked by a reporter about the anti-subsidy investigations by the US Department of Commerce (Commerce) into the shrimp imports, the first such investigation against Chinese agricultural products, reiterated that the imposition by the US of anti-subsidy CVDs against a non-market economy (NME), such as China, is in violation of World Trade Organization (WTO) rules.

He also confirmed that the Chinese Government ?attaches great importance to the country?s agricultural sector, and to trade remedy investigations involving its products, and hoped that the US will treat the case carefully, avoiding a negative impact on bilateral economic and trade relations and cooperation in agriculture. China is determined to maintain domestic production of warm water shrimp and its exporters' legitimate rights and interests.?

Last month, Commerce announced that it had initiated investigations that could lead to the imposition of CVDs on nearly USD4.3bn of frozen warm-water shrimp imports from China, Ecuador, India, Indonesia, Malaysia, Thailand and Vietnam, after determining that the Coalition of Gulf Shrimp Industries had provided sufficient information. US ADs have already been imposed on such shrimp imports from Brazil, China, India, Thailand and Vietnam.

This month, the United States International Trade Commission (USITC) determined that there is indeed a reasonable indication that the US industry is being materially injured by the imports that are allegedly subsidized. As a result of the USITC?s affirmative determinations, Commerce will now continue to conduct its investigations on imports of these products, with its preliminary CVD determinations due on or about March 25, 2013.

However, in its on-going disputes with the US, China has already established, in December last year, a WTO Dispute Settlement Body to examine its complaint that US AD and CVD measures being applied simultaneously to some 30 products, or USD7.2bn of its exports to the US, are inconsistent with WTO rules.

China had previously requested consultations on the US imposition, since 2006, of both countervailing duties (CVDs) and anti-dumping duties (ADs) at the same time on 30 of its products which it is said to subsidize - worth some USD7.2bn of its annual exports into the US market.

In March 2011, the WTO Appellate Body had found that the imposition by the US of double remedies, that is the offsetting of the same subsidization twice by the concurrent imposition of ADs and CVDs, and, indeed, the application of CVDs, against an NME, such as China, was inconsistent with WTO obligations.

In fact, the US Court of Appeals also decided that the US Congress had determined in the past that government payments cannot be characterized as ?subsidies? in an NME, and therefore, as had originally been held in the Trade Court in October 2010, CVDs should not apply to NME countries.

It had been expected that the Court of Appeal's decision could have forced Commerce to terminate the existing CVD orders against products from China, but, in March 2012, the passage of retroactive US legislation, the Tariff Act (GPX Act), overturned that decision and tried to preserve the validity of the existing CVDs against NME countries.

The MOF has pointed out that the passing of the GPX Act by the US has not resolved the issues involved, leading to the setting up of the Dispute Settlement Body. It has indicated, on the contrary, that the passage of legislation in Congress to counteract a previous court decision and try to legitimize the imposition of CVDs on NMEs, cannot be in line with WTO rules and should be rectified.

The MOC sees itself as fighting a long list of actions taken against China at the WTO, and has already highlighted what it sees as a tendency towards global trade protectionism, led by the US.

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Source: http://feedproxy.google.com/~r/tax-news/~3/mbjSDZE-rJI/China_Attacks_US_Over_Trade_Dispute_Methodology____59843.html

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