China and AntiDumping War against China

1
China and Anti-Dumping War against China

• Jason Z. Yin
• Seton Hall University
• August 2-3, 2003
• Ann Arbor, Michigan

2
The Anti-dumping War in WTO

• YEAR CASES FILED
• 1995 157
• 1996 224
• 1997 243
• 1998 255
• 1999 355
• 2000 288
• 2001 362
• 2002 276
• Total 2,160

3
The Anti-dumping War in WTO

• CASES FILED
• YEAR CASES FILED AGAINST CHINA
• 1995 157 20
• 1996 224 43
• 1997 243 33
• 1998 255 28
• 1999 355 41
• 2000 288 43
• 2001 362 53
• 2002 276 47
• Total 2,160 308

4
The Anti-dumping War in WTO

• CASES FILED CASES FILED
• YEAR CASES FILED AGAINST CHINA BY CHINA
• 1995 157 20 NA
• 1996 224 43 NA
• 1997 243 33 NA
• 1998 255 28 NA
• 1999 355 41 NA
• 2000 288 43 6
• 2001 362 53 9
• 2002 276 47 11
• Total 2,160 308 26

5
Cases filed against China by the Big Eight

• Reporting Party Total Against China
• U.S. 292 42
• E.U. 267 40
• Australia 155 14
• Canada 107 12
• India 331 62
• Argentina 180 39
• S. Africa 160 15
• Brazil 105 12
• Subtotal of 8 1597 238

6
Basis for Anti-Dumping Determination

• NME --- Non-Market Economy methodology
• HM --- Home Market value
• TM --- specified Third country Market value
• CV --- Constructed Value of the factors from a
  specified country
• COP --- Cost Of Production analysis
• FA --- Facts Available
• NA --- Not Available

7
Basis of AD Determination against China For
1995-2001

• U.S. E.U.
• NME 25 0
• HM 0 0
• TM 0 4
• CV 0 0
• COP 0 0
• FA 2 0
• NA 33 4
• Total 60 8

8
CHINA BITES THE BULLETS

• In its entry negotiation, China accepted
  discriminatory treatments in two important areas
• Allow U.S. and other WTO members to apply
  transitional product specific safeguard for 12
  years
• All U.S. and other WTO members to use non-market
  economy (NME) methodology in dumping cases for 15
  years.

9
How does NME methodology discriminate against
China

• The labor costs used in AD cases are much higher
  than the actual labor costs those prevailing in
  China
• WTO rules do not define market economy
  conditions. Each member has broad discretion in
  setting the conditions in antidumping cases
  against China
• No judicial review to defend China when its trade
  partners use NME methodology.

10
China is vulnerable in AD war

• AD war creates serious distortion on
  international trade and fair competition
• It has been used as a non-tariff barrier and it
  encourage rent-seeking behavior by importing
  competing firms
• Chinese firms lack of international trade
  experiences and financial capabilities to protect
  themselves
• Many products have been blocked in the global
  markets
• The AD measures and threatening to take
  retaliatory measures may lead the exporting firms
  to change products or seek new markets

11
Chinas Anti-Dumping Actions

• Anti-dumping and anti-dumping law and regulations
  of 1997
• Structure
• MOFTEC initiate dumping investigation and report
  findings
• SETC investigate industrial injury
• Initiate AD investigations
• Respond to foreign AD investigations

12
POLICY SUGGESTIONS

• Realize the intrinsic problem embodied in WTO AD
  agreements and be prepared for both eventualities
• Active use of AD for both defense and offense
• Govt assistance in AD actions
• Being active in the AD club and form its
  strategic alliances
• Active participation in the Reform of AD
  agreement

13
QUESTIONS?