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China Market Economy Status Inquiry Gets Extra Week for Comments

Tuesday, May 02, 2017
Sandler, Travis & Rosenberg Trade Report

The International Trade Administration has extended from May 3 to May 10 the deadline for comments and information on whether it should continue to treat China as a non-market economy in antidumping duty proceedings.

China’s protocol of accession to the World Trade Organization allowed WTO members to use calculations in AD proceedings that are not based on the actual costs of Chinese producers if the producers cannot demonstrate that market economy conditions prevail in their industry. The U.S. has used this provision to automatically assign NME status to goods imported from China, which typically results in higher AD duties than would otherwise be the case.

When this provision expired Dec. 11, 2016, China asserted that WTO members would have to stop using NME-type methodologies altogether with respect to Chinese goods as of that date. The U.S. and others, however, believe they may continue to use such methodologies as long as the petitioners clearly show that market economy conditions do not prevail in the industry at issue.

The ITA is therefore conducting, as part of a new AD duty investigation of aluminum foil from China, an inquiry into whether it should continue to treat China as an NME. Comments and information are specifically requested on the following factors the ITA is statutorily required to consider in making a market/non-market economy determination.

- the degree of convertibility of the Chinese yuan
- the degree to which wage rates in China are determined by free bargaining between labor and management
- the extent to which China permits joint ventures or other investments by foreign firms
- the extent of government ownership or control over the means of production
- the extent of government control over the allocation of resources as well as price and output decisions of producers
- any other factors the DOC considers appropriate

A final determination is expected before the ITA’s preliminary dumping determination in the aluminum foil case.

For more information, or for assistance preparing submissions to the DOC, please contact Mark Ludwikowski at (202) 730-4967, Kristen Smith at (202) 730-4965, or David Craven at (312) 279-2844.

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