United States: Countervailing and Anti-Dumping Measures on Certain
Products from China
ITRN 603 - Adam Diament, Zuleima Hanson, and Ryan Gardiner

China argued that U.S. Public Law 112-99, allowing
for countervailing duties on subsidized imports from
China, in addition to anti-dumping measures
against these same products, were in violation of
several Articles of the GATT 1994 and of the SCM
Agreement . The WTO decided in favor of the
United States, but against the U.S. on the issue of
“double remedies.”

2001 – China joins the WTO as a “non-market
economy”
 WTO members can use other countries to
determine production costs in anti-dumping cases
 Status set to expire on 12 December 2016


In early 1980s USDOC responded to a series
of petitions to impose CVDs on imports from
NME countries saying that under the Tariff
Act provisions on CVD were inapplicable to
countries that the US designates as NME.
This interpretation was affirmed by the
United States Court of Appeals for the
Federal Circuit in 1986 (George Steel Corp. v.
United States)

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Congress tried in several occasions to enact
new legislation that would allow the
application of CVD on NME countries, but
none of these initiatives resulted on the
enactment of a new law.
The U.S. Government Accountability Office
(GAO) issued a report in June 2005 describing
the United States options in this matter:
1. To designate China as market economy and
apply normal market economy methodologies
in anti-dumping investigations of Chinese
products, or
2. for the USDOC to declare, unilaterally, that
it will applying CVDs to imports from NME
(GAO cautioned this could be challenged in
court).

2006 – US Department of commerce begins investigating the
legality of applying countervailing duties (CVD) to coated free
sheet paper (CFS Paper) imports from China and issued and
affirmative CVD determination in Oct. 2007. This decision
unleashed a wave of new countervailing duty petitions
against Chinese products.

Source: offroaders.com
2007 - Titan International
Inc., the United
Steelworkers Union, and
later Bridgestone, argued
to the Department of
Commerce that off-the
road (OTR) tires imported
from China were “causing
material injury to U.S. OTR
tire makers”

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2008 – Commerce directed the enactment of
CVD’s of up to 210 percent on certain OTR tire
imports from China
2011 – After a number of appeals by GPX, which
was forced to file for bankruptcy following the
enactment of new tariffs, a federal US court
ruled that the Department of Commerce did not
have the legal authority to enact CVD’s on NME
and that if USDOC “believe that the law should
be changed, the appropriate approach is to seek
legislative change.”
U.S. Public Law 112-99 (the “GPX Legislation”)

Passed on 12 March 2012, enabling the
Department of Commerce to levy CVD’s on
subsidized imports from non-market
economies
 China responds by requesting consultations with
the U.S. through the WTO on 17 September 2012

The U.S. would not have won the case had it
not been for China’s status as a “non-market
economy”
 Is the U.S. simply using this status as an excuse to
implement protectionist policies?
 What happens in December 2016?

China argued that Section 1 of the PL 112-99
is inconsistent with the requirements of
Article X:1 of the GATT to "publish promptly”
because it was “made effective” as of 20
November 2006, but was not published until
13 March 2012.

China also claimed that Section 1 of the PL
112-99 is inconsistent with Article X:2 of the
GATT 1994 because as a “measure of general
application which effects an advance in a rate
of duty and imposes a new or more
burdensome requirement or restriction on
imports” it should had been enforced after its
official publication on 13 March 2012.

That the US applied Section 1 of PL 112-99
retroactively to events that took place
between 20 November 2006 and 13 March
2012, and such retroactivity is inconsistent
with Article X:3 of the GATT 1994.

That the United States failed to investigate
and avoid double remedies in 26
countervailing duty investigations and
reviews initiated between 20 November 2006
and 13 March 2012. Accordantly, the
resulting countervailing duty measures, and
countervailing duties collected during this
period are inconsistent with Article 10, 19,
and 32 of the Agreement of Subsidies and
Countervailing Measures (SCM).


The United States published PL 112-99 on the
on the same day it was enacted, fulfilling the
transparency called by Article X:1 of the GATT
1994.
X:1 of the GATT does not prohibit a measure
to touch on events that happened prior to its
publication.


GPX legislation was not enforced prior to its
publication. No U.S. entity acted upon this
new law prior to its publication.
Section 1 of the law is not a measure of
general application since it only applies to a
limited and known set of imports and
proceedings covering the period 20
November 2006 to 13 March 2012.
Therefore, it is not inconsistent with Article
X:2 of the GATT 1994.


China’s Protocol Accession to the WTO gives
every WTO member the right to apply CVDs
to imports from China as a NME including the
United States which the United States has
exercised since 2006.
The actions taken by US government
administrative authorities between
November 20, 2006 and 13 March, 2012 were
based on pre-existing CVD law and not on a
future authorization from Congress.

The United States has not changed the way in
which it applies CVD to NME countries. And
the goal of PL 112-99 was to clarify and
confirm the applicability of CVD law to
imports from NME countries and to resolve
the ambiguity created by the 2011 decision by
the US Court of Appeals of the Federal
Circuit.


That the US did not act inconsistently with article X:1
of the GATT 1994 because Section 1 “was made
effective” on 13 March, 2012 and was published on the
same day.
Although the US enforced section 1 prior to its
publications, this is not inconsistent with article X:2 of
the GATT 1994 because Section 1 is a measure of
general application that does not "effect an advance
in a rate of duty or other charge on imports under an
established and uniform practice, or impose a new or
more burdensome requirement, restriction, or
prohibition on imports.”

The United States did not act inconsistently
with Article X:3 of the GATT 1994, because
that provision does not prohibit a member
from taking legislative action in the nature of
Section 1 of PL 112-99
Regarding China’s claim that the US acted
inconsistently with the SCM Agreement by failing
to investigate and avoid double remedies in 26
investigations and reviews, the Panel found that:
 in the Drawn Stainless Steel Sinks case China
did not provide enough evidences to back its
claim,
 And on the other 25 cases that the United States
acted inconsistently with Article 19.3 of the SCM;
therefore, it should bring these investigations
and reviews into conformity with its obligations
under the Agreement.

Reversed the Panel’s interpretation of Article X:2 of the GATT 1994
because the Panel failed to compare the US Tariff Act of 1930 and
the Section 1 of PL-112 to determine if the PL advanced the rate of
duty or imposed new or more burdensome requirements.

Because of the erroneous interpretation of Article X:2, it declared
moot and with not effect the Panel’s findings that the USDOC’s
practice of applying countervailing duties to China between 2006
and 2012 was lawful in the context of the Article X:2. However, the
Appellate Body was not able to make the correct interpretation of
Article X:2.

Recommended that the Dispute Settlement Body request the
United States to bring the investigation and reviews inconsistent
with the SCM agreement into conformity.


New Section (f) of the United States Tariff,
established by Section 1 of the PL 112-99
entitled “an act to apply the countervailing duty
provisions of the US Tariff Act of 1930 to
nonmarket economy countries, and for other
purpose.”
New Section 777A (f) of the United States Tariff
established by Section 2 of the PL 112-99
entitled "Adjustment to Antidumping Duty in
Certain Proceedings Relating to Nonmarket
Economy Countries".



Articles X:1, X:2, X:3 of the GATT of 1994.
Article 10, Article 19, and 32 of the SCM
(Subsidies, Countervailing Measures)
Agreement.
Article 6.2 of the Dispute Settlement
Understanding (DSU).

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

Aluminum Extrusions
Certain Circular Welded
Carbon
Quality Steel Line Pipe
Certain Kitchen Appliance
Shelving and Racks
Certain Magnesia Carbon
Bricks
Certain New Pneumatic
Off-The-Road Tires
Certain Oil Country Tubular
Goods
Certain Potassium
Phosphate Salts
Certain Steel Grating
Certain Tow Behind Lawn
Groomers and Certain
Parts Thereof
 Circular Welded Austenitic
Stainless Pressure Pipe
 Citric Acid and Certain
Citrate Salts
 Lightweight Thermal Paper
 Narrow Woven Ribbons
with Woven Selvedge
 Prestressed Concrete Steel
Wire Strand
 Raw Flexible Magnets
 Sodium Nitrite

21 August 2014 – U.S. informs the WTO that it
planned to implement the recommendations, but
that it would need a “reasonable amount of time”
to do so
 China and the U.S. agreed that the
recommendations would be implemented by 22
July 2015 – which was later extended to 5 August
2015

January 2015 – U.S. Department of Commerce
began investigating whether the “double remedies”
had arisen on the products involved in the WTO
case
 Mid-July through Early-August 2015 – Department
issued its findings and instructed U.S. Customs and
Border Protection to begin collecting the revised
duties


U.S. Department of Commerce’s findings were
only recently released
 China and U.S. seem to have worked out their issues
in this particular case

China’s status as a “non-market economy” had a
major impact on the case, and has a major
impact on global trade
 Is the U.S. simply using this status as an excuse to
implement protectionist policies?
 What happens in December 2016?

The United States should continue to review
its anti-dumping and CVD policies to ensure
they’re not creating unnecessary barriers to
trade
 The U.S. should also look ahead to December
2016 and consider how it would handle a change
in China’s non-market economy status
"DISPUTE SETTLEMENT: DISPUTE DS449." World Trade Organization. Accessed October 1,
2015.
Dalton, Matthew. "Malmstrom: No Automatic Market Economy Status for China in 2016." Real
Time Brussels RSS. December 11, 2014. Accessed October 1, 2015.
"Implementation of Determinations Under Section 129 of the Uruguay Round Agreements
Act." Federal Register 80, no. 157 (2015): 48812-8819. Accessed October 5, 2015.
http://www.gpo.gov/fdsys/pkg/FR-2015-08-14/pdf/2015-20085.pdf.
Moore, Miles. "GPX Challenges Countervailing Duties Law - Rubber & Plastics News." Rubber
& Plastics News. September 3, 2012. Accessed October 1, 2015.
"PUBLIC LAW 112–99." March 13, 2012.
Togni, Pat. "WTO Appellate Body Issues Report In China's Challenge To U.S. Trade Laws." King
& Spalding: Trade & Manufacturing Alert. August 1, 2014. Accessed October 1, 2015.