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WTO rules against US 'double remedy'

Publication Date : 28-03-2014

 

The World Trade Organisation on Thursday released the report of a panel that backed China's challenge of countervailing and anti-dumping measures taken by the United States against certain products from China.

However, the WTO didn't support China's claim that a US measure known as the GPX Act was inconsistent with WTO rules.

More than 20 types of Chinese exports, ranging from photovoltaic cells for the solar industry to pipes used in wells in the oil and natural gas industries, were involved in the investigations or reviews launched by the US between Nov 20, 2006, and March 13, 2012.

"China welcomes the WTO's support of our claims. We urge the US to correct its misuse of trade remedy measures and guarantee a level playing field for Chinese enterprises," said Shen Danyang, spokesman of the Ministry of Commerce.

He said China regretted that the international trade body found the GPX Act did not breach the WTO rules.

The act, an amendment to a 1930 trade law, authorises the Commerce Department to initiate countervailing measures on nonmarket economy countries and retroactively ratify the legitimacy of previous probes.

"The ruling is a great victory for us in challenging the US misuse of trade remedy measures, even though the WTO ruling didn't fully support our claims. The US has to correct its unfair duties on Chinese exports," said Yang Guohua, deputy director-general of the department of treaties and laws at the Ministry of Commerce.

Chinese exports of more than $7.2 billion could ultimately be affected, according to the Ministry of Commerce in Beijing.

The panel report agreed with China on the US' failure to identify and avoid the double remedies in the investigations or reviews, and it found the US actions were inconsistent with WTO rules.

Double remedies arise when both anti-dumping and countervailing duties are being applied on a product, if the subsidies being targeted by the latter duties are also responsible in part for the dumping.

The report rejected China's claim regarding the GPX Act and held that act did not enhance the duties or added import burdens.

Zuo Haicong, dean of the Law School of Nankai University in Tianjin, said that the favorable part of the ruling had been expected because of a similar ruling in March 2011.

The WTO's Appellate Body ultimately backed China three years ago, saying that the US could not simultaneously impose both countervailing duties and anti-dumping duties without having assessed whether the extra duties amounted to double remedies.

"The win is significant because the WTO clearly said 'no' to the US measure involving double remedies, which could increase the duties on Chinese exports," Zuo said.

"The GPX Act is unreasonable. But it's hard for the WTO to invalidate a US domestic law and it thus reached a compromise that the act didn't burden other economies," he added.

Both sides have 60 days to appeal after the distribution of the report, under WTO rules.

On Sept 17, 2012, China requested consultations with the US concerning the countervailing and anti-dumping measures involved in the new ruling.

At a meeting on Dec 17, 2012, the WTO Dispute Settlement Body established a panel to look into the case.

"The US may not appeal because there's little hope of changing the panel's ruling. Also, China will probably not appeal. It's not easy to challenge US domestic laws and, in the future, China will focus more on the implementation of the laws and ensure that US moves are consistent with the WTO rules," Zuo said.

The world's top two economies have been caught up in frequent trade disputes recently. The WTO on Wednesday ruled against China on export restrictions on rare earths following complaints from the US, the European Union and Japan.

US Trade Representative Michael Froman welcomed the WTO's ruling, which "means American companies and workers throughout our manufacturing economy will be able to compete fairly".

On Wednesday, ReneSola Ltd, a leading brand and technology provider of solar photovoltaic products in Zhejiang province, said that it has been selected as one of the respondents in the US Department of Commerce's anti-dumping investigation on certain crystalline silicon photovoltaic products from China.

 

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