TWN Info Service on WTO and Trade Issues (Jun17/02)
5 June 2017
Third World Network
US rejects Chinese proposal on trade remedy measures
Published in SUNS #8474 dated 2 June 2017
Geneva, 1 Jun (Kanaga Raja) - A proposal by China for advancing the
negotiations aimed at further clarifying and strengthening the rules on
anti-dumping (AD) and countervailing (CV) measures was rejected outright by the
United States at an informal meeting of the WTO Negotiating Group on Rules on
According to trade officials, at the informal open-ended meeting of the Rules
Group, chaired by Ambassador Wayne McCook of Jamaica, the US argued that there
was no basis for re-engaging on the "rules" negotiations, and said
that it would not take part in any further discussions on the items highlighted
in China's proposal.
[The improvements, sought by China in the Anti-Dumping Agreement and the
Agreement on Subsidies and Countervailing Measures, are elements that the US
had opposed in the Rules negotiations. Significantly, China has not sought the
elimination of the "zeroing" methodology, used by the US and which
has been repeatedly struck down by the Appellate Body in disputes involving the
US use of this methodology in anti-dumping investigations. See SUNS #8450 dated
26 April 2017.]
According to the Chinese proposal (TN/RL/GEN/185), rules are the foundation for
upholding and safeguarding the open and non-discriminatory multilateral trading
system in the world.
"Recognizing the lingering and serious challenges the multilateral trading
system is faced with, such as the global economic slowdown, rising
protectionism and the rapidly changing international marketplace, China sees
the merit of continuing to seek balanced results of the Rules Negotiations to
the furtherance of the rules-based multilateral trading system."
According to China, the Rules negotiations on anti-dumping and subsides and
countervailing measures are key subjects in the Rules negotiations and one of
the essential components of the Doha Development Agenda (DDA).
As mandated by the Ministerial Declaration of the Doha Ministerial Conference,
the Rules negotiations on anti- dumping and subsides and countervailing
measures are aimed at clarifying and improving disciplines under the
Anti-Dumping Agreement (ADA) and the Agreement on Subsidies and Countervailing
Measures (ASCM) while preserving the basic concepts, principles and
effectiveness of these Agreements and their instruments and objectives, and
taking into account the needs of developing and least-developed participants.
China said in reviewing the increased application of AD and CVD instruments by
Members, it is concerned that "it is even more important now than
ever" to further clarify and strengthen the AD and CVD rules.
According to the Chinese proposal, over the last two decades, the application
of AD and CVD measures has no longer been limited to the traditional users.
While a number of rules remain unclear or ambiguous, AD and CVD are often
misused in many cases.
"Disparate application of the same rules has given rise to increased trade
disputes under the WTO Dispute Settlement Mechanism in recent years. Moreover,
overused AD and CVD measures for policy considerations and their distortionary
effects on international trade as well as the internal markets of the
investigating Members to the harm of all Members involved and their downstream
industries/consumers has no longer been an exceptional phenomenon."
It recalled that in the negotiations on anti-dumping, the Negotiating Group on
Rules has been discussing in detail proposals on such issues as determinations
of injury/causation, the lesser duty rule, public interest, transparency and
due process, interim reviews, sunset, duty assessment, circumvention, the use
of facts available, limited examination and all others rates, dispute settlement,
the definition of dumped imports, affiliated parties, product under
consideration, and the initiation and completion of investigations.
In respect of subsidies and countervailing measures, proposals for amendments
to the ASCM have been submitted on a number of issues, including the definition
of a subsidy, specificity, prohibited subsidies, serious prejudice, export
credits and guarantees, and the allocation of benefit.
The Chinese proposal also noted that based on the consolidated text of 2011
(TN/RL/W/254), "there is a growing convergence among Members regarding the
Meanwhile, there are also a number of bracketed issues on which members have
divergent views, it said.
It further noticed that the Appellate Body and panels have clarified important
issues in quite a few cases, which would give clear guidance and reference to
the Rules Negotiations.
Given the present state of play in the negotiations, it would be feasible to
promote the Rules negotiations by seeking to identify and prioritize important
and "do-able" issues as the starting points for further discussions,
and putting them forward in a balanced and efficient way, said China.
China proposed the following aspects for further discussion and negotiation:
(1) Enhancing transparency and strengthening due process; (2) Preventing AD
measures from becoming "permanent"; (3) Preventing AD measures from
"overreaching"; (4) Special consideration and treatment of SMEs
[small and medium-sized enterprises]; (5) Transplanting similar provisions from
ADA to ASCM.
Speaking at the informal meeting, China said it recognized the difficulties
encountered in the Rules negotiations in the past but that great efforts were
made to advance the talks as reflected in the consolidated text issued by the
then-chair of the Rules negotiations in April 2011. This past effort can serve
as the basis for future negotiations.
China said that many of the ideas for discussion in its own proposal
"stand on the shoulders" of the consolidated text.
In reference to its proposed aspects for further discussion and negotiation,
China suggested that members could start with these easier issues and then
progressively expand the scope of the discussions to the more difficult issues.
It was open to any comments and suggestions.
According to trade officials, the US spoke first, maintaining that there is no
common basis from which the Negotiating Group on Rules can constructively
engage on trade remedies.
The US said that it will not engage in talks on any of the items China has
proposed as starting points for further discussion.
The US also said that the consolidated text of April 2011 did not represent any
convergence or consensus among the membership at the time and even less so now.
It maintained that in the intervening years the divergences have grown even
greater, with WTO dispute rulings on trade remedy actions moving members even
farther apart. The increasing use of trade remedy measures was the result of
increasing "injurious" trade taking place worldwide.
The US argued that the Chinese proposal ignores the root cause of the problem,
which in the US view was increased dumping and subsidization of trade. The
proposal also seeks to restrain legitimate remedial tools.
At a time when dumped and subsidized trade has reached new levels of intensity,
now was precisely the wrong moment for members to consider new limits on the
use of legitimate remedies, the US said.
As for Doha mandate, the US argued that members could not agree to reaffirm the
Doha mandates at their last ministerial conference (in Nairobi) in 2015.
Doha was totally obsolete and disconnected from the current reality, the US
According to trade officials, Japan, Russia, Hong Kong-China, Turkey, Norway,
Singapore, Switzerland, Chinese Taipei, Peru, Thailand and Indonesia expressed
support for some or most aspects of China's proposal.
Japan, speaking on behalf of most members of the Friends of Anti-Dumping
Negotiations (FANs) group, said that new and clear disciplines for trade remedy
measures were needed now more than before.
[Members of FANs include Brazil, Chile, Colombia, Costa Rica, Hong Kong-China,
Israel, Japan, Korea, Mexico, Norway, Singapore, Switzerland, Chinese Taipei,
Thailand and Turkey.]
According to Japan, Members need to take a realistic approach built on past
According to trade officials, Japan and the FANs underlined that no linkages
should be made between trade remedies and other issues being negotiated in the
Rules Group (notably fisheries subsidies).
Other members of the FANs group including Norway, Turkey, Switzerland,
Singapore, and Thailand said that there were elements of the Chinese proposal
where consensus was more likely to be reached, such as transparency and due
These issues should be the focus of discussions in the run-up to the WTO
ministerial conference in Buenos Aires this December, they said.
Korea, a member of the FANs, expressed concern about the increasingly arbitrary
application of trade remedy measures and that disciplines needed to be
It however recognized the post-Nairobi reality, namely that negotiations can
only take place if the counter-party is prepared to negotiate.
While welcoming the initiative by China, Korea pointed out that members failed
to reach an agreement on transparency and due process in Nairobi even though
these issues were also recognized at the time as being the closest to reaching
The situation today is the same, if not worse, Korea said, adding that
differences on the other issues, such as disciplines on "sunset"
reviews for existing AD measures, are even greater than in the past.
According to trade officials, the European Union voiced agreement with China
that the issues of transparency and due process were important areas.
At least equally important is considering improving existing disciplines on the
granting of subsidies, it said.
Despite existing obligations under the ASCM to notify subsidies to the WTO, the
level of compliance is low and has deteriorated in recent years, the EU
In this context, the EU informed the informal meeting that it has submitted a
new proposal to the Rules Group on improving subsidy notification disciplines
With respect to the specific aspects in China's proposal, the EU voiced
concerns over the proposal to limit the duration of all AD measures to a
maximum of 10 years and for members to refrain from initiating anti-
circumvention investigations in cases where exporters are suspected of skirting
According to the EU, circumvention is an increasing phenomena undermining
legitimate trade remedy measures.
According to trade officials, Australia said that what was causing trade
distortions was subsidies, and not the countervailing measures.
It also said that the issues of transparency and due process were already being
addressed in the various WTO trade remedy committees (AD, CV and safeguards).
Addressing the problems of compliance with existing transparency obligations
would enhance what China is seeking in its proposal, Australia argued.
Canada pointed out that there was little time and little willingness among
members to agree on disciplines by Buenos Aires.
While it expressed support for the general objective of advancing the rules
negotiations, Canada said that it had concerns with specific aspects of the
Chinese proposal, such as the idea of members refraining from initiating
Trade remedies are a fair and justified answer to injury caused by unfair
trade, Canada maintained.
According to trade officials, Russia said it was high time that members
contributed to more predictable rules of trade.
It welcomed the Chinese proposal, saying that many of the ideas put forward by
China can be discussed, at the least. Transparency and due process were two
areas where members could leverage past achievements.
Russia expressed hope that all the rules negotiation "tracks" would
be given equal treatment and addressed in the same constructive manner for
outcomes in Buenos Aires.
According to trade officials, South Africa called for the preservation of
policy space for members with regards to their practices.
It underlined that measures to address injurious trade should not be questioned
as long as they are in line with WTO obligations.
According to South Africa, the consolidated text of 2011 does not represent a
consensus outcome and substantial differences exist between members on the
issues contained therein.
According to trade officials, India said that its officials in capital were
still considering the Chinese proposal.
It however expressed concerns that some of the ideas outlined in the Chinese
proposal could impose additional burdens on investigative authorities.
Brazil said that a realistic approach was needed in terms of what could be
achieved in Buenos Aires.
Both Brazil and Argentina cited the work in the Rules Group on fisheries
subsidies, where intensive efforts were underway to develop new disciplines for
the sector, and the importance attached to the issue by many WTO members.
Argentina said that the UN's Sustainable Development Goal 14.6, which calls for
a global deal to eliminate subsidies that contribute to illegal, unreported and
unregulated fishing by 2020, does not link the issue of fisheries subsidies
with any other issue under discussion at the WTO.
According to trade officials, a number of delegations highlighted concerns
about linking progress on trade remedies to progress in other areas, in
particular fisheries subsidies.