Transcript United States - Global Trade Relations

China — Anti-Dumping and
Countervailing Duties on Certain
Automobiles from the United States
WTO DISPUTE SETTLEMENT: DISPUTE DS440
By: Joanna Zaffaroni & Dilan Wickrema
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Background
• In 2011 Ministry of Commerce of the People's
Republic of China (MOFCOM) published
Notice No. 20 and Notice No. 84
• Imposed anti dumping and countervailing
measures on certain automobiles from the
United States
– Engine displacements equal to or greater than
2500 cubic centimeters, or 2.5 liters
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Mostly sedans and
sport-utility vehicle:
-Chrysler 200
-Chrysler 300
-Dodge Charger
-Ford Fusion
-Ford Escape
-Chevy Impala
Autos with V8
engines
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Timeline
• July 5, 2012: the United States requested
consultations with China imposing anti-dumping
and countervailing duties on certain automobiles
from the United States.
• September 17, 2012: the United States requested
the establishment of a panel.
• September 28, 2012: the DSB deferred the
establishment of a panel.
• 23 October 2012: the DSB established a panel.
(Mr. José Graça Lima, Members: Mr. Donald
Greenfield, Mr. Arie Reich)
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Timeline, concluded
• February 1, 2013: the United States requested
the Director-General to determine the
composition of the panel.
• February 11, 2013: the Director-General
composed the panel.
• September 25, 2013: the Chair of the panel
informed the DSB that its expects to issue its final
report to the parties by March 2014.
• May 23, 2014: the panel report was circulated to
Members.
• June 18 2014: the DSB adopted the panel report.
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Business Context
• Sales of US made cars have grown in the last 5
years, due to the strengthening of the US auto
industry and a stronger dollar.
• Auto parts are already produced in China
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China’s Position
and Political Context
• The Trade dispute started in 2009 with WTO Dispute
DS399. China complained that the US placed a 35
percent tariff on Chinese tires, but WTO ruled in favor
of the US in 2011.
• MOFCOM led an investigation in May 2011 and found
that US automakers (GM, Chrysler Group) received
government subsidies only to “dump” vehicles on the
Chinese market.
• That same year, China imposed CVD and AD duties on
US made automobiles.
– Tariffs didn’t slow or hurt US auto exports.
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US Position
• The US felt that China’s December 2011
decision to impose anti-dumping (AD) and
countervailing (CVD) duties on Americanmade cars and SUVs was unjustified.
• The anti-dumping duties ranged from 2.0 to
21.5 percent, while the countervailing duties
were between 6.2 and 12.9 percent.
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US Position
• GM and Chrysler faced some of the harshest duties among the
companies named in MOFCOM's investigation. The ministry
assigned GM an 8.9 percent dumping margin and countervailing
duties at 12.9 percent. Chrysler's dumping margin was 8.8
percent, and it had a 6.2 percent countervailing duty rate.
• The Chinese ministry applied an all-others dumping margin of
21.5 percent to Ford Motor Co., but Ford did not face
countervailing duties.
• In all, the duties covered more than $3 billion in exports, or some
92,000 vehicles, according to the USTR in 2012.
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WTO Panel Findings & Decision
United States
• Rejected the US claim that MOFCOM's definition of the domestic
industry in the investigations at issue was inconsistent with Article
4.1 Anti-Dumping Agreement and Article 16.1 of the SCM
Agreement.
• Rejected the US claims that MOFCOM's public notices failed to
disclose the essential facts and findings and conclusions reached
on all issues of fact and law considered material by MOFCOM in
relation to the determination of the residual duty rates.
• Found that the US failed to establish that China acted
inconsistently with Articles 6.9, 12.2, 12.2.2 of the Anti-Dumping
Agreement, and Articles 12.8, 22.3 and 22.5 of the SCM
Agreement.
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WTO Panel Findings & Decision
China
• MOFCOM erred in its determination of the residual anti-dumping and countervailing
duty rates for unknown exporters of the subject product. Panel concluded that these
residual duty rates did not conform to the requirements of Article 6.8 and Annex II of
the Anti-Dumping Agreement, and Article 12.7 of the SCM Agreement.
• MOFCOM erred in failing to provide interested parties with adequate nonconfidential summaries of certain confidential information in the petition, contrary to
the requirements of Article 6.5.1 of the Anti-Dumping Agreement and Article 12.4.1 of
the SCM Agreement.
• MOFCOM failed to disclose to US respondents the essential facts which formed the
basis of its decision to impose definitive anti-dumping duties, as required under Article
6.9 of the Anti-Dumping Agreement.
• China acted inconsistently with the general obligation set forth in Article 1 of the
Anti-Dumping Agreement and Article 10 of the SCM Agreement to conduct
investigations consistently with the provisions of these Agreements.
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WTO Provisions Cited
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Specific Provisions
ADA Art. 6.5.1/ASCM Art. 12.4.1
(evidence – confidential information)
• The authorities shall require interested parties providing
confidential information to furnish non-confidential
summaries thereof. These summaries shall be in sufficient
detail to permit a reasonable understanding of the substance
of the information submitted in confidence. In exceptional
circumstances, such parties may indicate that such
information is not susceptible of summary. In such
exceptional circumstances, a statement of the reasons why
summarization is not possible must be provided.
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Specific Provisions
ADA Art. 6.9 (evidence – essential facts)
• The authorities shall, before a final determination is
made, inform all interested parties of the essential
facts under consideration which form the basis for
the decision whether to apply definitive
measures. Such disclosure should take place in
sufficient time for the parties to defend their
interests.
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Specific Provisions
ADA Art. 6.8 and Annex II para. 1/ASCM Art. 12.7
(evidence – facts available)
ADA Art. 6.9/ASCM Art. 12.8 (evidence – essential
facts) and ADA Arts. 12.2
12.2.2/ASCM Arts. 22.3 and 22.5 (evidence – findings
and conclusions on material issues of fact and law)
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Specific Provisions
ADA Art. 3.1/ASCM Art. 15.1 (injury
determination – positive evidence and
objective examination)
ADA Art. 4.1/ASCM Art. 16.1 (definition of
domestic industry)
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Specific Provisions
ADA Art. 3.2/ASCM Art. 15.2 (injury
determination – price effects)
ADA Art. 3.5/ASCM Art. 15.5 (injury
determination – causation)
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Implementation of the Panel's
Decision
“The message is clear: China must follow the rules,
just like other WTO Members. [The U.S.] will keep
pressing for China to change its trade remedies
practices that unfairly restrict U.S. exports.”
-USTR Rep. Michael Froman
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The Dispute In The Context of The
Global Trading System
The United States and China have committed to:
• Strengthening the multilateral development
financing system
• Strengthening their cooperation in the IMF
• Releasing release economic data following the IMF’s
Special Data Dissemination Standards (China)
• Continuing to discuss mechanisms to facilitate
renminbi trading and clearing in the United States.
• Affirming the positive role that Select Reverse Trade
Missions play
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Questions?
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