File #2343: "2018_Book_Non-marketEconomiesInTheGlobal.pdf"
Text
1|Foreword|5
1|Acknowledgements|8
1|Contents|12
1|Editors and Contributors|14
1|Abbreviations|19
1|List of Cases|22
2|WTO Panel and Appellate Body Reports|22
2|GATT Panel Reports|26
2|Anti-dumping Investigations|26
2|US Cases|39
2|Indian Cases|40
2|International Cases|40
2|Miscellaneous|40
1|1 Introduction: Non-market Economies in the Global Trading System—The Special Case of China|42
2|Abstract|42
2|1 Introduction|42
2|2 Non-market Economies Under the GATT|43
2|3 The Special Case of China|44
2|4 The Mysteries of Section 15 of China’s Accession Protocol|46
2|5 The Broader Issues Relating to China’s Market Economy Status|48
2|6 The Structure of the Book|51
1|2 China’s Long March to Market Economy Status: An Analysis of China’s WTO Protocol of Accession and Member Practices|53
2|Abstract|53
2|1 Introduction|54
2|2 State-Controlled Economies, Dumping and NME Status|57
2|3 China’s Protocol of Accession: Continuing Use of Surrogate Country Prices|61
3|3.1 Surrogate Country Treatment and Sunset Clause|63
3|3.2 The Significance of the Chapeau of Section 15|67
3|3.3 An Imperfect Text and the Use of the Negotiating History of Section 15|69
3|3.4 Surrogate Country Methodologies and China’s NME Status|74
2|4 Treatment of China in Domestic Anti-dumping Investigations|75
3|4.1 China as an NME: United States Practice|75
3|4.2 China as an NME: Practice of the European Union|81
3|4.3 China as an NME: Indian Practice|86
3|4.4 China as a Market Economy: Australian Practice and the Use of the ‘Particular Market Situation’|89
4|4.4.1 Use of the ‘Particular Market Situation’ in Australian Anti-dumping Proceedings|90
3|4.5 China as a Market Economy: Practice of Brazil|94
3|4.6 Treatment of China in Anti-dumping Investigations: Canadian Practice|98
2|5 Out of Country Prices: The Implications of EU—Biodiesel|100
2|6 Conclusion|103
1|3 How China Did not Transform into a Market Economy|105
2|Abstract|105
2|1 Introduction|106
2|2 China’s Past as a Centrally-Planned Economy|107
2|3 Multilateral Trade Rules and Centrally-Planned Economies|108
2|4 China’s Abandonment of the CPE Regime|112
2|5 Distortions in the Prices of the “Factors of Production”|115
3|5.1 Distinction Between “Factors of Production” and Raw Materials|115
3|5.2 Distortions in the Price of Capital|116
4|5.2.1 Distortions in the Cost of Raising Capital Through Loans|116
4|5.2.2 Distortions in the Cost of Raising Capital Through Bonds|117
4|5.2.3 Distortions in the Cost of Raising Capital Through Equity|118
3|5.3 Distortions in the Price of Labor|119
3|5.4 Distortions in the Price of Land|120
2|6 Distortions in the Prices of Raw Materials|120
3|6.1 Export Taxation|121
3|6.2 Null or Partial Rebating of the VAT on Exports|123
2|7 Distortions in the Price of Energy|124
2|8 Distinction Between the Cost Distortions Generated by the Non-market Economy Regime and Subsidization|125
2|9 Allowing SOEs in Key Upstream Markets to Operate Without an Effective Budget Constraint|127
2|10 Ensuring “Orderly Markets”|128
2|11 Promoting the Growth of Specific Industries Through Planning|130
3|11.1 The Planning Eco-System|130
3|11.2 The Catalogues|131
3|11.3 The Steel Policy|132
3|11.4 Made in China 2025|133
3|11.5 Forced Mergers|134
2|12 Summary and Conclusion|135
2|Annex I|136
1|4 The Termination of the Grandfather Clause in China’s Accession Protocol and the Normal Value Construction After Fifteen Years of Accession|138
2|Abstract|138
2|1 Section 15 of the Protocol Allows Surrogate Country Methodology as an Exception and an Enabling Clause with a Proviso|139
2|2 The Grandfather Clause in GATT History: The Existing GATT-Inconsistent Domestic Legislations Were Grandfathered for 15 Years After China’s Accession|143
2|3 China’s Accession Protocol Section 15(a) and (d) Allow Application of Domestic Law Market Economy Criteria and Thus Constitute a Grandfather Clause in Anti-dumping|147
2|4 Understanding Why the WTO Does not Have a Market Economy Rule, i.e., the Function of the Anti-dumping and the SCM Agreement Can Accommodate Various Economies with SOEs and Subsidies|149
2|5 Negotiating History Shows that Surrogate Country Methodology as a Grandfather Clause Shall Be Terminated After 15 Years of Accession Under Protocol Section 15(a) and (d)|153
2|6 Whether the Protocol, the AD Agreement, and GATT Article VI Provide Any Legal Basis for Continuing Surrogate Country Methodology on Chinese Imports|156
2|7 The EU’s New Regulation and Why the AD Agreement and GATT 1994 Do not Authorize the Use of Surrogate Country Methodology|157
2|8 Coherent Interpretation of Article 2.2.1.1 and the Resolution of State-Owned Enterprise Issue|164
2|9 Conclusion|168
1|5 Double Remedy: Beyond the Non-market Economy Status|170
2|Abstract|170
2|1 Introduction|170
2|2 Double Remedy and NMEs|173
2|3 Double Remedy in the Light of Appellate Body Decision in US—AD and CVD Case|177
2|4 The EU’s Approach to Double Remedy Problem|180
2|5 Double Remedies on the Horizon|185
2|6 Conclusion|191
1|6 External Benchmark Choices in Anti-dumping and Countervailing Duty Proceedings: A Battle of ‘Proxies’?|193
2|Abstract|193
2|1 Introduction|194
2|2 Use of an External Benchmark in Countervailing Duty Investigations|197
3|2.1 US—Softwood Lumber IV|197
3|2.2 US—Carbon Steel (India)|201
3|2.3 US—Countervailing Measures (China)|204
3|2.4 The EU’s Countervailing Duty on Ductile Cast Iron Pipes and Tubes from India|207
2|3 Use of an External Benchmark in Anti-dumping Investigations|208
3|3.1 EU—Biodiesel (Argentina)|209
4|3.1.1 Article 2.2 of the Anti-dumping Agreement and Article VI:1(b)(ii) of the General Agreement on Tariffs and Trade (1994)|210
4|3.1.2 Article 2.2.1.1 of the Anti-dumping Agreement|211
4|3.1.2.1|212
4|3.1.2.2|213
3|3.2 The Expiry of Section 15(a)(ii) of the Accession Protocol|214
3|3.3 Dual Pricing|220
2|4 Conclusion|222
1|7 The Issue of ‘Particular Market Situation’ Under WTO Anti-dumping Law|223
2|Abstract|223
2|1 Introduction|223
2|2 Interpreting PMS and the Appellate Body Report in EU—Biodiesel|225
3|2.1 A Standard Approach to PMS|225
3|2.2 The Implications of EU—Biodiesel for the Interpretation of PMS|228
2|3 The Application of the PMS Method in Australia, the US, and the EU: Recent Developments|231
3|3.1 Australia|231
3|3.2 The US|234
3|3.3 The EU|236
2|4 Conclusion|238
1|8 Shifting Sands: The Evolution and Future Course of U.S. Anti-dumping Law and Practice Against China and Vietnam|239
2|Abstract|239
2|1 Introduction|240
2|2 Section I|244
3|2.1 Early Days of U.S. Anti-dumping Practice Against Controlled Economies|244
3|2.2 Tinkering with the Anti-dumping Toolbox|245
3|2.3 China Under the Lens: Re-Tooling for Economies in Transition|248
2|3 Section II|252
3|3.1 Negotiated Bargain: Anti-dumping Provisions in China and Vietnam’s Protocol of Accession|252
3|3.2 Factors of Production Methodology|256
3|3.3 Separate Rate Test|258
2|4 Section III|261
3|4.1 China’s Status After December 11, 2016 in U.S. Anti-dumping Investigations|261
3|4.2 The Peculiar Case of the Particular Market Situation Methodology|262
4|4.2.1 Oil Country Tubular Goods: DOC’s First Test Case Under an Expanded Statute|262
4|4.2.2 From OCTG to Biodiesel: Evolving Application of the Particular Market Situation Methodology|266
2|5 Conclusion|270
2|Acknowledgements|273
1|9 Treatment of China in EU Anti-dumping Investigations Post-December 2017: Plus ça change, plus c’est la même chose|274
2|Abstract|274
2|1 Introduction|275
2|2 Legal Framework for the Treatment of Chinese Exporting Producers in Anti-dumping Investigations Until December 19, 2017|277
2|3 The MET Debate in the EU and Its Outcome|281
2|4 The New Legal Framework for the EU’s Approach Towards China in Anti-dumping Investigations|284
3|4.1 Assessment of Significant Distortions|285
4|4.1.1 Identifying Significant Distortions|285
4|4.1.2 Triggering the New Methodology|286
3|4.2 The New Methodology Addressing Significant Distortions|287
3|4.3 Other Changes Linked to the Significant Distortions Rules|287
2|5 Preliminary Assessment of the Significant Distortions Rules|288
3|5.1 Extreme Ambiguity and Broad Scope|288
3|5.2 Re-Introduction of the MET Criteria|289
3|5.3 Country-Wide Approach|291
3|5.4 Establishment of Undistorted Costs|292
3|5.5 China Will Likely Be the Main Target|293
2|6 Conclusion|294
1|10 Treatment of Non-market Economies in Anti-dumping Proceedings: The Mexican Approach|295
2|Abstract|295
2|1 Introduction|295
2|2 Legal and Institutional Frameworks: Handling of Anti-dumping Procedures in Mexico|300
2|3 Anti-dumping Investigations: Methodologies Used for Non-market Economies|302
2|4 The Use of Surrogacy Method Against Chinese Imports|306
2|5 Changes Post 12 December 2016: The Increase in Burden of Proof on Petitioners|310
2|6 Concluding Remarks|315
2|Acknowledgements|316
1|11 ‘Rebuttable Presumption’ to ‘Refutable Assumption’: An Assessment of Market Economy Treatment by the Indian Designated Authority from 1995 till 2018|317
2|Abstract|317
2|1 Introduction|317
2|2 Indian Legislative Framework|320
2|3 Approach of the Designated Authority|323
3|3.1 Assessment of Market Economy Status|324
3|3.2 Determination of Normal Value for Firms from NMEs|332
2|4 Assessment by the Designated Authority After 11 December 2016|334
2|5 Conclusion|337
1|12 Conclusion|339
2|Abstract|339
1|Annexure|343
1|China’s Protocol of Accession to the WTO, 2001|343
1|Australia|344
1|Brazil|345
1|Canada|346
1|European Union|348
1|India|351
1|Mexico|352
1|South Africa|353
1|Turkey|353
1|United States of America|353
1|Index|355
1|Acknowledgements|8
1|Contents|12
1|Editors and Contributors|14
1|Abbreviations|19
1|List of Cases|22
2|WTO Panel and Appellate Body Reports|22
2|GATT Panel Reports|26
2|Anti-dumping Investigations|26
2|US Cases|39
2|Indian Cases|40
2|International Cases|40
2|Miscellaneous|40
1|1 Introduction: Non-market Economies in the Global Trading System—The Special Case of China|42
2|Abstract|42
2|1 Introduction|42
2|2 Non-market Economies Under the GATT|43
2|3 The Special Case of China|44
2|4 The Mysteries of Section 15 of China’s Accession Protocol|46
2|5 The Broader Issues Relating to China’s Market Economy Status|48
2|6 The Structure of the Book|51
1|2 China’s Long March to Market Economy Status: An Analysis of China’s WTO Protocol of Accession and Member Practices|53
2|Abstract|53
2|1 Introduction|54
2|2 State-Controlled Economies, Dumping and NME Status|57
2|3 China’s Protocol of Accession: Continuing Use of Surrogate Country Prices|61
3|3.1 Surrogate Country Treatment and Sunset Clause|63
3|3.2 The Significance of the Chapeau of Section 15|67
3|3.3 An Imperfect Text and the Use of the Negotiating History of Section 15|69
3|3.4 Surrogate Country Methodologies and China’s NME Status|74
2|4 Treatment of China in Domestic Anti-dumping Investigations|75
3|4.1 China as an NME: United States Practice|75
3|4.2 China as an NME: Practice of the European Union|81
3|4.3 China as an NME: Indian Practice|86
3|4.4 China as a Market Economy: Australian Practice and the Use of the ‘Particular Market Situation’|89
4|4.4.1 Use of the ‘Particular Market Situation’ in Australian Anti-dumping Proceedings|90
3|4.5 China as a Market Economy: Practice of Brazil|94
3|4.6 Treatment of China in Anti-dumping Investigations: Canadian Practice|98
2|5 Out of Country Prices: The Implications of EU—Biodiesel|100
2|6 Conclusion|103
1|3 How China Did not Transform into a Market Economy|105
2|Abstract|105
2|1 Introduction|106
2|2 China’s Past as a Centrally-Planned Economy|107
2|3 Multilateral Trade Rules and Centrally-Planned Economies|108
2|4 China’s Abandonment of the CPE Regime|112
2|5 Distortions in the Prices of the “Factors of Production”|115
3|5.1 Distinction Between “Factors of Production” and Raw Materials|115
3|5.2 Distortions in the Price of Capital|116
4|5.2.1 Distortions in the Cost of Raising Capital Through Loans|116
4|5.2.2 Distortions in the Cost of Raising Capital Through Bonds|117
4|5.2.3 Distortions in the Cost of Raising Capital Through Equity|118
3|5.3 Distortions in the Price of Labor|119
3|5.4 Distortions in the Price of Land|120
2|6 Distortions in the Prices of Raw Materials|120
3|6.1 Export Taxation|121
3|6.2 Null or Partial Rebating of the VAT on Exports|123
2|7 Distortions in the Price of Energy|124
2|8 Distinction Between the Cost Distortions Generated by the Non-market Economy Regime and Subsidization|125
2|9 Allowing SOEs in Key Upstream Markets to Operate Without an Effective Budget Constraint|127
2|10 Ensuring “Orderly Markets”|128
2|11 Promoting the Growth of Specific Industries Through Planning|130
3|11.1 The Planning Eco-System|130
3|11.2 The Catalogues|131
3|11.3 The Steel Policy|132
3|11.4 Made in China 2025|133
3|11.5 Forced Mergers|134
2|12 Summary and Conclusion|135
2|Annex I|136
1|4 The Termination of the Grandfather Clause in China’s Accession Protocol and the Normal Value Construction After Fifteen Years of Accession|138
2|Abstract|138
2|1 Section 15 of the Protocol Allows Surrogate Country Methodology as an Exception and an Enabling Clause with a Proviso|139
2|2 The Grandfather Clause in GATT History: The Existing GATT-Inconsistent Domestic Legislations Were Grandfathered for 15 Years After China’s Accession|143
2|3 China’s Accession Protocol Section 15(a) and (d) Allow Application of Domestic Law Market Economy Criteria and Thus Constitute a Grandfather Clause in Anti-dumping|147
2|4 Understanding Why the WTO Does not Have a Market Economy Rule, i.e., the Function of the Anti-dumping and the SCM Agreement Can Accommodate Various Economies with SOEs and Subsidies|149
2|5 Negotiating History Shows that Surrogate Country Methodology as a Grandfather Clause Shall Be Terminated After 15 Years of Accession Under Protocol Section 15(a) and (d)|153
2|6 Whether the Protocol, the AD Agreement, and GATT Article VI Provide Any Legal Basis for Continuing Surrogate Country Methodology on Chinese Imports|156
2|7 The EU’s New Regulation and Why the AD Agreement and GATT 1994 Do not Authorize the Use of Surrogate Country Methodology|157
2|8 Coherent Interpretation of Article 2.2.1.1 and the Resolution of State-Owned Enterprise Issue|164
2|9 Conclusion|168
1|5 Double Remedy: Beyond the Non-market Economy Status|170
2|Abstract|170
2|1 Introduction|170
2|2 Double Remedy and NMEs|173
2|3 Double Remedy in the Light of Appellate Body Decision in US—AD and CVD Case|177
2|4 The EU’s Approach to Double Remedy Problem|180
2|5 Double Remedies on the Horizon|185
2|6 Conclusion|191
1|6 External Benchmark Choices in Anti-dumping and Countervailing Duty Proceedings: A Battle of ‘Proxies’?|193
2|Abstract|193
2|1 Introduction|194
2|2 Use of an External Benchmark in Countervailing Duty Investigations|197
3|2.1 US—Softwood Lumber IV|197
3|2.2 US—Carbon Steel (India)|201
3|2.3 US—Countervailing Measures (China)|204
3|2.4 The EU’s Countervailing Duty on Ductile Cast Iron Pipes and Tubes from India|207
2|3 Use of an External Benchmark in Anti-dumping Investigations|208
3|3.1 EU—Biodiesel (Argentina)|209
4|3.1.1 Article 2.2 of the Anti-dumping Agreement and Article VI:1(b)(ii) of the General Agreement on Tariffs and Trade (1994)|210
4|3.1.2 Article 2.2.1.1 of the Anti-dumping Agreement|211
4|3.1.2.1|212
4|3.1.2.2|213
3|3.2 The Expiry of Section 15(a)(ii) of the Accession Protocol|214
3|3.3 Dual Pricing|220
2|4 Conclusion|222
1|7 The Issue of ‘Particular Market Situation’ Under WTO Anti-dumping Law|223
2|Abstract|223
2|1 Introduction|223
2|2 Interpreting PMS and the Appellate Body Report in EU—Biodiesel|225
3|2.1 A Standard Approach to PMS|225
3|2.2 The Implications of EU—Biodiesel for the Interpretation of PMS|228
2|3 The Application of the PMS Method in Australia, the US, and the EU: Recent Developments|231
3|3.1 Australia|231
3|3.2 The US|234
3|3.3 The EU|236
2|4 Conclusion|238
1|8 Shifting Sands: The Evolution and Future Course of U.S. Anti-dumping Law and Practice Against China and Vietnam|239
2|Abstract|239
2|1 Introduction|240
2|2 Section I|244
3|2.1 Early Days of U.S. Anti-dumping Practice Against Controlled Economies|244
3|2.2 Tinkering with the Anti-dumping Toolbox|245
3|2.3 China Under the Lens: Re-Tooling for Economies in Transition|248
2|3 Section II|252
3|3.1 Negotiated Bargain: Anti-dumping Provisions in China and Vietnam’s Protocol of Accession|252
3|3.2 Factors of Production Methodology|256
3|3.3 Separate Rate Test|258
2|4 Section III|261
3|4.1 China’s Status After December 11, 2016 in U.S. Anti-dumping Investigations|261
3|4.2 The Peculiar Case of the Particular Market Situation Methodology|262
4|4.2.1 Oil Country Tubular Goods: DOC’s First Test Case Under an Expanded Statute|262
4|4.2.2 From OCTG to Biodiesel: Evolving Application of the Particular Market Situation Methodology|266
2|5 Conclusion|270
2|Acknowledgements|273
1|9 Treatment of China in EU Anti-dumping Investigations Post-December 2017: Plus ça change, plus c’est la même chose|274
2|Abstract|274
2|1 Introduction|275
2|2 Legal Framework for the Treatment of Chinese Exporting Producers in Anti-dumping Investigations Until December 19, 2017|277
2|3 The MET Debate in the EU and Its Outcome|281
2|4 The New Legal Framework for the EU’s Approach Towards China in Anti-dumping Investigations|284
3|4.1 Assessment of Significant Distortions|285
4|4.1.1 Identifying Significant Distortions|285
4|4.1.2 Triggering the New Methodology|286
3|4.2 The New Methodology Addressing Significant Distortions|287
3|4.3 Other Changes Linked to the Significant Distortions Rules|287
2|5 Preliminary Assessment of the Significant Distortions Rules|288
3|5.1 Extreme Ambiguity and Broad Scope|288
3|5.2 Re-Introduction of the MET Criteria|289
3|5.3 Country-Wide Approach|291
3|5.4 Establishment of Undistorted Costs|292
3|5.5 China Will Likely Be the Main Target|293
2|6 Conclusion|294
1|10 Treatment of Non-market Economies in Anti-dumping Proceedings: The Mexican Approach|295
2|Abstract|295
2|1 Introduction|295
2|2 Legal and Institutional Frameworks: Handling of Anti-dumping Procedures in Mexico|300
2|3 Anti-dumping Investigations: Methodologies Used for Non-market Economies|302
2|4 The Use of Surrogacy Method Against Chinese Imports|306
2|5 Changes Post 12 December 2016: The Increase in Burden of Proof on Petitioners|310
2|6 Concluding Remarks|315
2|Acknowledgements|316
1|11 ‘Rebuttable Presumption’ to ‘Refutable Assumption’: An Assessment of Market Economy Treatment by the Indian Designated Authority from 1995 till 2018|317
2|Abstract|317
2|1 Introduction|317
2|2 Indian Legislative Framework|320
2|3 Approach of the Designated Authority|323
3|3.1 Assessment of Market Economy Status|324
3|3.2 Determination of Normal Value for Firms from NMEs|332
2|4 Assessment by the Designated Authority After 11 December 2016|334
2|5 Conclusion|337
1|12 Conclusion|339
2|Abstract|339
1|Annexure|343
1|China’s Protocol of Accession to the WTO, 2001|343
1|Australia|344
1|Brazil|345
1|Canada|346
1|European Union|348
1|India|351
1|Mexico|352
1|South Africa|353
1|Turkey|353
1|United States of America|353
1|Index|355