October 29, 2007
Department of Commerce seeks comments on granting market-economy treatment to certain Chinese respondents in antidumping suits
On October 25, the US Department of Commerce issued a notice requesting public comment on
whether it should consider granting market-economy treatment to individual respondents in antidumping proceedings involving the People's Republic of China ("China"), the conditions under which individual firms should be granted market-economy treatment, and how such treatment might affect our antidumping calculation for such qualifying respondents.
This is a very interesting development. As trade buffs know, Commerce has long declined as a matter of policy to apply countervailing duties to non-market economies on the grounds that the amount of a countervailable subsidy in such an economy is impossible to determine. (Trade buffs may also think I'm oversimplifying here; sorry!) Recently, however, Commerce did find that Chinese exports had received a countervailable subsidy. (See Countervailing Duty Investigation of Coated Free Sheet ("CFS") Paper from the People's Republic of China - Whether the Analytical Elements of the Georgetown Steel Opinion are Applicable to China's Present-day Economy (March 29, 2007) (on file in the CRU on the record of case number C-570-907); Coated Free Sheet Paper from the People's Republic of China: Amended Preliminary
Affirmative Countervailing Duty Determination, 72 FR 17484 (April 9, 2007).) This position is less a reversal of previous policy than a recognition that China's economy is sufficiently market-governed in at least some areas to warrant revisiting the policy's application to China.
This new thinking has now gone the logical next step, toward consideration of the possibility that some elements of China's economy are sufficiently market-governed that they should not be subject to NME treatment in antidumping proceedings. Since NME treatment is, for respondents, essentially the equivalent of losing before the contest has begun, that Commerce will consider this possibility is good news for Chinese exporters and American importers.