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WTO Upholds U.S. Law Imposing CV Duties on Imports from NME Countries

Monday, March 31, 2014
Sandler, Travis & Rosenberg Trade Report

A World Trade Organization dispute settlement panel issued March 27 what the Office of the U.S. Trade Representative called “a mixed result” in a challenge brought by China against a U.S. trade remedy law and 25 related determinations issued by the Department of Commerce. The law at issue confirmed DOC’s ability to impose countervailing duties against imports from non-market economy countries and was enacted in March 2012 in response to a contrary ruling by the Court of Appeals for the Federal Circuit in GPX Int’l Tire Corp. v. U.S.

The panel rejected China’s allegations that the so-called GPX law violated WTO rules on transparency, administration and judicial review. On the other hand, the panel agreed with China that the U.S. breached WTO rules in 25 CV duty proceedings initiated prior to the enactment of the GPX law by failing to investigate whether the concurrent application of antidumping duties determined using an NME methodology and CV duties on the same products may have resulted in an overlap of remedies (i.e., double counting). USTR points out, however, that DOC has been required to conduct such investigations for all proceedings initiated after March 13, 2012, the date the GPX law was enacted.

In related news, the CAFC ruled last week that the GPX law did not violate the Ex Post Facto Clause of the U.S. Constitution by allowing CV duties to be imposed on NME goods retroactive to Nov. 20, 2006, but restricting a prohibition on double counting to CV proceedings initiated on or after March 13, 2012. Like the Court of International Trade in a similar case, the CAFC said that the Ex Post Facto Clause only prohibits the imposition of retrospective penal legislation, whereas U.S. courts have consistently held trade remedy laws like the GPX law to be remedial.

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