TEAM #7
VICKY RAHAMTALL
MAURICIO RAMIREZ
JULIA STRAKER
1
Pending U.S.-China Cases
U.S. v. China (Antidumping on Auto Parts) (Pending #440)
U.S. v. China (Export Restrictions Rare Earths) (Pending #431)
U.S. v. China (Subsidies and Wind Power) ( Pending # 419)
China v. U.S. (CVD on Products from China) (Pending # 437)
U.S. v. China
2
Main WTO Issue: Antidumping on Auto Parts
Pending #440
History & Context
 Sept 2009: Obama imposes safeguard measures against Chinese tire imports
 Shortly after, China announces investigations of imports of American made
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cars & SUVs
May 2011: China finds that American automobiles had been sold at less than
value
December 2011: China imposes anti-dumping/countervailing duties on U.S.
produced automobiles
Products affected: American automobiles with engine capacity of 2.5 liters +.
Last year, the U.S. exported more than $3 billion of these automobiles to China
Prior Proceedings
3
 July 5, 2012: U.S. requests consultations with
China for imposing countervailing and antidumping duties
 September 17, 2012: U.S. requests establishment of
a panel
 September 28, 2012: DSB deferred establishment
of a panel
 October 23, 2012: Panel is established
Business & Political Context
4
For the U.S., there are political expectations to
confront unfair Chinese trade practices. Moreover,
the U.S. auto industry is greatly protected by
unions and lobbies, further pressuring the U.S.
take action against China given the industry at
stake. Combating these duties is also viewed as
protecting jobs and growing the economy.
Chinese Law Contested
5
 Regulations of the PRC on Countervailing Measures
 Articles 11, 13, 16, 17
WTO Agreements Cited
6
 Anti-Dumping Agreement

Articles 1, 3.1, 3.2, 3.4, 3.5, 4.1, 5.3, 5.4, 6.2, 6.5.1, 6.8 (including
Annex II, paragraph 1), 6.9, 12.2, and 12.2.2

Determination of injury caused is based on positive, objective evidence that
examines volume and impact of dumped imports (evidence subject to
investigation / parties able to defend their interests).
 Subsidies & Countervailing Measures Agreement

Articles 10, 11.3, 11.4, 12.4.1, 12.7, 12.8, 15.1, 15.2, 15.4, 15.5, 16.1 22.3,
and 22.5

CV duties must be in accordance with GATT article VI; evidence subject to
investigation; all parties are provided with requested information/essential
facts (also reiterates anti-dumping articles cited).
 GATT 1994

Article VI

Defines the purpose of CV & AD duties and the legal obligations of the
contracting parties to impose such duties transparently, fairly, and
with proper evidence.
Positions of the Parties
7
Complainant: U.S.
 Insufficient evidence
 Failed to objectively examine
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evidence
Unsupported findings of injury to
China’s economy
Failure to disclose ‘essential facts’
Failure to provide adequate
explanation of findings
Improper execution of
investigative procedures
Failure to require non-confidential
summaries of Chinese company
submissions
Respondent: China
 American automobiles sold at less
than fair value
 Automobiles benefitted from
subsidies
 WTO rules permit imposition of
duties if found to be
dumped/subsidized and causes
injury to domestic economy
National & International Interests
8
 United States Interests: The U.S. believes the duties
imposed are a retaliatory effort to block U.S. exports in
light of the safeguard measure the U.S. imposed against
Chinese tire imports in 2009. By challenging the CV & AD
duties, the U.S. is able to better protect the auto industry,
especially given the huge presence of unions and lobbies.
This protects jobs and helps grow the economy.
 Chinese Interests: The Chinese claim that the dumping of
American automobiles has caused injury to their domestic
manufacturers. Therefore, this will help protect their auto
industry.
Proposed Resolution
9
If the evidence collected by Chinese authorities is
found to be insufficient in proving American-made
automobiles were sold at a less than fair value and
caused injury to the domestic economy, then the
Chinese should remove the CV & AD duties in a
timely manner in accordance with their international
obligations.
U.S. v. China
10
Main WTO Issue: Export restrictions on Rare Earths
Pending #431
History & Context
 The Chinese imposed export restraints, including export duties,
export quotas, minimum export price requirements and export
licensing requirements, on 17 rare earth minerals as well as
tungsten and molybdenum. These rare earths are indispensible
components needed to produce modern technologies for the
defense, electronics and renewable-energy industries. China
produces about 97% of the of rare earth minerals.
Prior Proceedings
11
 March 13, 2012: U.S. requested consultations on
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China’s actions
Subsequently, EU, Japan and Canada joined the
consultations
June 27, 2012: U.S. requested the establishment of a
panel
July 23, 2012: Single panel was created
September 24, 2012: Director General composed the
panel
Business & Political Context
12
China produces 97% of the world output of rare earth
minerals that are critical components to producing
advanced technologies. This equates to significant
economic and political control over the technology
industry and more. For example, in 2010 China cut
off exports of rare earths to Japan due to an
unrelated diplomatic spat when the Japanese
detained a Chinese fishing boat captain. For critical
components that are costly both financially and
environmentally, it is important for the U.S. to
ensure the fair trade of these goods through
mechanisms such as the WTO.
Contested Chinese Law
13
 Foreign Trade Law of the PRC and the Regulation of
the PRC on the Administration of the Import and
Export of Goods
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
Articles 35 & 16
Rare earths are listed as catalogue item no. 21 as an acceptable
commodity to enact export restrictions
WTO Agreements Cited
14
 GATT 1994
 Art. VII, VIII, X, XI, XI:1, X:3(a)

The price of goods are based on fictitious values; fees and charges
should not represent indirect protection, need to simplify export
documentation requirements; information should be published
promptly; elimination of quantitative restrictions
 Protocol of Accession:
 Part I, para. 1.2, Part I, para. 5.1, Part I, para. 11.3, Part I, para.
5.2, Part I, para. 8.2, Part I, para. 7.2

China should: Apply all laws in uniform, impartial and reasonable
manner; progressively liberalize availability/scope of trade;
eliminate and not introduce, re-introduce or apply non-tariff
measures not justified under WTO rules; eliminate all taxes and
charges applied to exports unless under Annex 6.
Positions of the Parties
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Complainant: U.S.
 China imposed unfair export
restraints: duties, quotas, pricing
requirements, procedures and
document requirements
 These harmful policies artificially
increase prices for rare earths
internationally while lowering
prices in China
 Creates advantages for Chinese
producers
 Creates pressure for international
producers to move their
operations, technologies and jobs
to China
Respondent: China
 Export restraints were
implemented in order to prevent
environmental damages that result
from mining the minerals
National & International Interests
16
 Chinese Interests: Export restrictions on rare earths could
potentially allow China to capture a large portion of the
market by selling advanced technologies at substantially
lower prices than the international community is able to;
this could also enable China to control general price-points
on the technology because international firms would not be
competitive. Finally, this could draw substantial FDI
 U.S./International Interests: If the export restrictions were
eliminated, firms could produce the advanced technologies
at a lower cost; in return, consumers could purchase
technology at lower prices.
Proposed Resolution
17
If Chinese export practices are found to be inconsistent
with WTO regulations, China should be responsible
for meeting their international trade obligations in
accordance with their WTO commitments. China
and the complainant should agree to a specific
amount of time in which the Chinese have to bring
their rare earth trade practices in line with
international obligations.
U.S. v. China
18
Subsidies and Wind Power
Main WTO Issue: Import Substitution Subsidies
Pending # 419
History & Context
China provides grants, funds and awards to Chinese wind power
equipment manufacturers if they use domestic parts and
components rather than imported goods. Program grants range
from $6.7 million and $22.5 million and Chinese companies are
eligible for multiple awards. USTR estimates that China has
given several hundred million dollars to Chinese manufacturers
of wind turbines and components for wind turbines since 2008.
Prior Proceedings
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 December 22, 2010: U.S. requested consultations
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with China
January 12, 2011: EU requested to join consultations
January 17, 2011: Japan requested to join
consultations
February 16, 2011: U.S. held consultations with
China
June, 2011: Following consultations, China formally
revoked the legal measure that created the Special
Fund for Wind Power Manufacturing program
Business & Political Context
20
The imposition of Chinese import substitution
subsidies curbs the export potential for foreign
manufacturers of wind power components, including
the U.S. The USTR received multiple petitions from
unions citing the burdens and restrictions on
commerce as a result of the Chinese protectionist
policies.
Contested Chinese Law
21
 Renewable Energy Law of the People’s Republic of
China - Appendix No. 476

(Legal measure enabling Special Fund for Wind Power
Manufacturing)
WTO Agreements Cited
22
 GATT 1994

Art. XVI:1

If a subsidy or price support is implemented that increases exports/reduces
imports, they responsible for estimating the effects and notifying contracting
parties. If any contracting parties’ interests are seriously threatened, the party
granting the subsidy should discuss with other parties the possibility of
limiting the subsidy.
 Subsidies and Countervailing Measures Agreement

Art. 3, 25.1, 25.2, 25.3, 25.4

Subsidies provided for the use of domestic over imported goods is
prohibited; all information regarding imposed subsidies should be
made available to all parties to evaluate the effects of said subsidy.
 Protocol of Accession:

Part I, para. 1.2

The WTO Agreement to which China accedes shall be the WTO Agreement as
rectified, amended or otherwise modified by such legal instruments as may
have entered into force before the date of accession.
Positions of Parties
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Complainant: U.S.
Respondent: China
 Import substitution subsidies acts
 Need to subsidize green technology
as a barrier to U.S. exports to
China in the green technology
industry
 Failed to make available necessary
translations of measures &
generally lacks the necessary
transparency to monitor subsidies
sector as it is an investment to
improve the environment and
accelerate technology advancement
of wind equipment manufacturing
sector and promote wind power
development in China
National & International Interests
24
 Chinese Interests: Claims that the subsidies were
intended to increase R&D in the wind energy sector
and that this should be a non-issue.
 U.S./International Interests: Chinese subsidies
effectively thwart U.S. green technology exports to
China. The eradication of such subsidies could allow
U.S. and international firms in the green technology
sector to share the same competitive playing field as
Chinese firms. Finally, with increased exports to
China, the U.S. could create more jobs and grow the
economy.
Resolution of Trade Issue
25
Following consultations with the United States,
China formally revoked the legal measure that
created the Special Fund for Wind Power
Manufacturing program in June 2011.
USTR issued the following Statement:
“The United States is pleased that China has shut down this subsidy program.
Subsidies requiring the use of local content are particularly harmful and are
expressly prohibited under WTO rules. This outcome helps ensure fairness
for American clean technology innovators and workers. We challenged
these subsidies so that American manufacturers can produce wind turbine
components here in the United States and sell them in China. That
supports well-paying jobs here at home.”
China v. U.S.
26
Countervailing Duty Measures on Certain Products from
China
Main WTO Issue: Countervailing duties and Subsidies
Pending #437
History & Context
The WTO previously ruled against a similar set of anti-dumping
and countervailing duties imposed by the U.S. on certain
products from China (DS379). The Chinese have said that after
the issuance of the Appellate Body report for this previous
dispute, the U.S. did not fully comply with the DSB rulings and
recommendations; nor did the U.S. modify its conduct in the
subsequent trade remedy investigations. The Chinese requested
subsequent consultations for CV duties on a wide range of
products from China.
Chinese Products Affected by CV Duties
27
 Thermal paper
 Seamless pipe
 Pressure pipe
 Print graphics
 Line pipe
 Drill pipe
 Citric acid
 Aluminum extrusions
 Lawn groomers
 Wood flooring
 Kitchen shelving
 Steel wheels
 Oil country tubular goods
 Steel wire
 Wire strand
 Steel cylinders
 Steel grating
 Solar panels
 Wire decking
 Wind towers
 Magnesia bricks
 Steel sinks
Prior Proceedings
28
 May 25, 2012: China requested consultations with the United States
concerning the imposition of countervailing duty measures by the United
States on certain products from China.
 August 20: 2012: China requested the establishment of a panel.
 August 31, 2012: the DSB deferred the establishment of a panel.
 September 28, 2012: DSB established a panel (Australia, Brazil, Canada,
the European Union, India, Japan, Korea, Norway, the Russian Federation,
Turkey and Viet Nam and Saudi Arabia reserved their third party rights)
 November 14, 2012: China requested the Director-General to determine the
composition of the panel.
 November 26, 2012: The Director-General composed the panel.
Business & Political Context
29
The United States asserts that the CV duties are
imposed against the Chinese products counteract
Chinese government subsidies. Lobbies and unions
may also play a role in this protectionist effort given
the industries affected by these products (i.e. the
steel industry).
Contested U.S. Law
30
 U.S. Public Law 112-99: “An act to apply the
countervailing duty provisions of the Tariff Act of
1930 to nonmarket economy countries, and for other
purposes”

In a statement, the US said that it conducted the proceedings
transparently and with all the procedural safeguards provided for
under the WTO Agreement.
WTO Agreements Cited
31
 GATT 1994:

Article VI
 SCM Agreement:

Articles 1.1, 2, 11.1, 11.2, 11.3, 12.7 and 14(d)
 Protocol of Accession of China:

Article 15

China challenges various aspects of certain identified countervailing
duty investigations, including their opening, conduct and the
preliminary and final determinations that led to the imposition of
countervailing duties. China also challenges the “rebuttable
presumption” allegedly established and applied by the US Department
of Commerce that majority government ownership is sufficient to
treat an enterprise as a “public body”.
Positions of Parties
Complainant: China
 China believes that the
countervailing duties imposed
by the U.S. are inconsistent
with their obligations to the
WTO.
 The WTO has already ruled
against the United States in
2011 for a similar set of
measures (DS379)
32
Respondent: U.S.
 The WTO Agreements permit
members to levy a
countervailing duty in order to
offset injury caused by
subsidies bestowed by another
Member on the manufacture,
production, or export of goods.
 With respect to the CV duty
proceedings at issue in this
dispute, the US said that it
conducted the proceedings
transparently and with all the
procedural safeguards provided
for under the WTO Agreement.
National & International Interests
33
 U.S. interests: Countervailing duties on these
products are necessary to offset the injury caused by
China's government subsidies.
 Chinese/international interests: Chinese exports are
hurt by the CV duties; therefore, it is in Chinese
interests to have these duties removed.
Proposed Resolution
34
If the countervailing duties are found to be
inconsistent with WTO regulations, the U.S. should
be responsible for meeting their international trade
obligations in accordance with their WTO
commitments. The U.S. and China should agree to a
specific amount of time in which the U.S. will into
bring the matter at issue into full compliance with
the DSB recommendations and rulings and their
international obligations.