China and Anti-Dumping War against China: China and Anti-Dumping War against China Jason Z. Yin Seton Hall University August 2-3, 2003 Ann Arbor, Michigan


The Anti-dumping War in WTO: 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


The Anti-dumping War in WTO: 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


The Anti-dumping War in WTO: 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


Cases filed against China by the “Big Eight”: 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


Basis for Anti-Dumping Determination: 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


Basis of AD Determination against China For 1995-2001: 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


CHINA: BITES THE BULLETS: 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.


How does NME methodology discriminate against China: 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.


China is vulnerable in AD war: 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


China’s Anti-Dumping Actions: China’s 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


POLICY SUGGESTIONS: 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 Gov’t assistance in AD actions Being active in the AD club and form its strategic alliances Active participation in the Reform of AD agreement


QUESTIONS?: QUESTIONS?