Are US anti-dumping policies against China all caused by "non-market"?

Nowadays, whenever it comes to trade policy, it is almost inevitable to immediately mention a country-China. Since China joined the World Trade Organization in December 2001, the US-China trade volume reached US $ 231 billion in 2004, with a growth rate of 91% —more than six times the growth rate of the US ’s trade with other countries in the world. The countless producers and consumers in the two countries, as well as investors from all over the world who have become relatives of these two economies through booming trade relations and supply chains, have benefited from the US-China trade "love relationship." Recognizing this reality, the Bush administration has shown considerable skill in handling trade relations between the two countries, and has not condoned any trade protectionism against the import of Chinese products. However, contrary to the extensive restraint adopted in the face of anti-China trade protection pressure, the Bush administration adopted a "reasonable and aggressive" combative attitude on the issue of anti-dumping against China.

Although the White House rarely intervenes directly or prevents the collection of anti-dumping tariffs—as is the case with tariffs in some security protection cases—in fact, his attitude has a significant influence on the policy orientation of the Ministry of Commerce. Therefore, the Bush administration should seriously examine its anti-dumping policy against China, especially the absurd "non-market economy methodology" being considered by the Ministry of Commerce and a series of rule changes suspected of targeting China. An honest review and assessment will lead to the conclusion that the current US anti-dumping policy is undermining the good foundation of the US-China trade relationship, and the government ’s commendable substantial efforts to maintain this relationship will be lost.

The US-China trade relationship has rapidly developed into one of the most important trade relations in the world. After China joined the World Trade Organization in December 2001, the bilateral trade between the United States and China increased by 91% in 2004, and the trade volume reached US $ 231 billion—six times the growth rate of the United States ’trade with the rest of the world. Behind these figures are hundreds of millions of international investments, tens of thousands of joint venture production projects and technology sharing cooperation, complex multinational supply chains, and benefit producers, consumers and investors in the two countries and other countries A large number of vibrant trade relations.

At the same time, the continuous development of trade relations between the two countries has also promoted the achievement of important geopolitical goals. The harmonious trade relationship between the United States and China has enhanced the economic and strategic interests of both countries. The Bush administration seems to recognize this reality, so he handles this trade relationship in an orderly manner like an experienced flight attendant. He gave him guidance in the final stage of China's accession to the WTO, making China eventually become a member of the WTO; he relied on his sufficient financial resources to reject the call for restrictions on imports of Chinese products for accusing China of manipulating currency and exploiting labor; in In three security protection cases against China, he believed that it was contrary to the economic interests of the United States and vetoed the US International Trade Commission ’s tariff levy; he did not require the WTO to conduct formal arbitration, and successfully negotiated and resolved the US and Chinese semiconductors. The issue of differential tax treatment for producers. In terms of US-China trade relations, the Bush administration basically adopts a positive and far-sighted strategy, but there are some exceptions that are particularly noticeable, the most important of which is the government ’s position in the anti-dumping policy against China. In contrast to the extensive restraint adopted in the face of anti-China trade protection pressure, the Bush administration has adopted a blatantly combative attitude on the issue of anti-dumping against China.

The U.S. Department of Commerce, which has formulated anti-dumping laws, seems to regard blocking Chinese product imports as a measure of its political achievements. In the section on trade achievements on his website, it is quite "a sense of accomplishment" that declares that The number of anti-dumping orders (21 cases) is close to the sum of the previous government ’s eight years (25 cases), and said that “The Ministry of Commerce has begun investigating TV sets, furniture, and shrimp imported from China. The largest anti-dumping case, with a case value of more than $ 1.5 billion. "Since January 2001, the first month after the Bush administration took over the White House, 32 anti-dumping investigations against China have been launched. The country-India (12 cases) is tripled, that is, there is a new anti-dumping investigation against China every 45 days.

Although the White House rarely intervenes or prevents the imposition of anti-dumping duties—as he did in those security protection cases—in fact, his attitude has a significant influence on the policy orientation of the Ministry of Commerce. Therefore, the Bush administration should seriously examine its anti-dumping policy against China, especially the absurd "non-market economy methodology" being considered by the Ministry of Commerce and a series of rule changes suspected of targeting China. An honest review and assessment will lead to the conclusion that the current US anti-dumping policy is undermining the good foundation of the US-China trade relationship, and the government ’s commendable substantial efforts to maintain this relationship will be lost.

The Achilles heel of anti-dumping

The US anti-dumping law is the most controversial content of US trade policy. Those who support it believe that it is a necessary tool to put an end to unfair trade and "maintain fair competition", but in fact, the law we enforce cannot distinguish between fair trade and unfair trade. The result is that completely normal and undisputed international trade and the U.S. and foreign companies involved may be unfairly punished for this routine law.

Under this law, price discrimination or sales at a price lower than the cost of the product-usually its pricing strategy is completely reasonable and legal, in line with the principle of profit maximization-is considered to be evidence of unfair competitive advantage. However, this law does not provide an operational principle that can distinguish between price differences under unfair competition and those under legal pricing strategies. The lack of rigorous analysis will almost certainly result in harm to innocent people, so the authorities should be precise when applying anti-dumping laws to avoid or at least minimize "misinjury".

Scholars of the Carter Institute have already demonstrated in detail how to separate anti-dumping laws and management methods in theory. This study also found that in a large number of forensic procedures, the government authorities actually carried out the prejudice that they hoped to find evidence of dumping. Carter ’s scholars put forward a series of reform proposals aimed at reducing the gap between anti-dumping theory and reality, eliminating methodological prejudice, and minimizing collateral damage that is unacceptable to any impartial vision. In their view, there is nothing better than the so-called "non-market economy methodology" to prove how inexact the existing anti-dumping policy is. It is a blatant disregard of legal proceedings.

Non-market economy methodology

The Ministry of Commerce has applied "non-market economy methodology" to the determination of anti-dumping cases in several countries, and so far, China has been the biggest victim of this methodology. Generally, the premise of the "non-market economy methodology" is that in a highly concentrated planned economy, because there is no market force to intervene in the supply and demand relationship, its pricing is unreliable, and their product prices cannot reflect the real supply and demand relationship, so it is not sufficient. This judges whether they have price discrimination or sales below cost.

Although China ’s market-oriented reforms over the past twenty-five years have attracted worldwide attention, China ’s WTO accession protocol allows WTO members to use some kind of anti-dumping methodology, if the Chinese producers under investigation cannot clearly indicate In its industry, the manufacturing, production and sales of its products are already well equipped with market economy conditions, so anti-dumping should not be based on Chinese prices or Chinese costs as a strict basis for comparison. "This allows WTO member states to The terms that China considers to be non-market economy countries are valid for 2016. But member states can still treat the entire China or a single industry as a market economy at any time before this deadline.

Although the Ministry of Commerce has formal standards and procedures for identifying Chinese industry as "market-oriented industry," they have never done so, even in some cases where there is clear evidence that China has moved towards a market economy. The determination of certain industries as "market-oriented" or the promotion of certain countries from a non-market economy to a market economy status is entirely at the discretion of the Ministry of Commerce and does not require changes to any laws or judicial review. Therefore, the Bush administration can use its discretion at any time to upgrade China from a non-market economy to a market economy status, just as he did to Russia and Kazakhstan in 2002 and Lithuania and Estonia in 2003.

Arbitrariness of discretion

The outcome of the non-market economy case depends on a series of subjective decisions: subjectively choose the country and price for comparison. In the procedure of the case, the parties involved considered the alternatives in favor of themselves as evidence from the results: the plaintiff required to choose the producer with the lowest production efficiency and the highest import price, while the defendant advocated to choose the producer with the highest production efficiency. And the lowest import price.

At the same time, the investigation procedure used by the Ministry of Commerce to judge disputes in anti-dumping cases seems ridiculous. In the recently high-profile “China Wooden Bedroom Furniture Anti-Dumping Case”, the Ministry of Commerce ordered China ’s mandatory respondent companies to report “60 to 100 production factors out of more than 500 production factors used for price evaluation of special companies” . The way to evaluate these production factors is: compare the purchase price of China with the price imported from the market economy country; compare the purchase price of China with the price imported from India, unless the Ministry of Commerce finds that the information is unreliable or unavailable . One of these methods is obtained from Indian data, but in fact, the most important ingredient in furniture production, wood, is not applicable to Indian furniture factories, because its wood obviously needs to be imported, therefore, Russian timber import prices have been added to this evaluation system.

As the final judgment of this furniture case, the Ministry of Commerce issued a 373-page "Memorandum of Questions and Decisions", which summarized most of the disputes of relevant stakeholders, explained the position of the Ministry of Commerce against all parties, and analyzed the composition of this with a lot of space 1. Judgment of alternative prices for various factors, such as mirrors, glass, screws, handles, hinges, hooks, straps, foam boards, sawdust boards, cardboard, packaging materials, sales expenses, and profits.

In the memorandum, the Ministry of Commerce stated: "This survey conducted a price evaluation of a large number of complex production factors based on the relevant subjects in the" International Tariff Schedule ", involving the import prices of hundreds of products necessary to produce the target product. . The fact that we used such extensive information in this survey is of substantial significance because we are convinced that this information is sufficient to accurately calculate the limits of anti-dumping determination. "

The problem is that attachment to "precision" has never been the standard of "non-market economy methodology." In this furniture case, most of the production factors used to compare Chinese products

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