TWN Info Service on WTO and Trade Issues (July17/02)
4 July 2017
Third World Network
China lowers MC11 ambition on AD-CVD, US still opposed
Published in SUNS #8492 dated 30 June 2017
Geneva, 29 Jun (D. Ravi Kanth) -- China faces an acid test for bringing about a
modest outcome of improvements in trade remedies at the World Trade Organization's
eleventh ministerial meeting in Buenos Aires in December as the United States
remains dead opposed to any changes in the anti-dumping provisions as well as
negotiated deliverables in the Argentinean capital.
In its latest proposal "on enhancing transparency and strengthening due
process in anti-dumping and countervailing proceedings" circulated on 26
June, China has signalled its intention for a modest deliverable at Buenos
Aires.
At a time when all efforts are focused on a comprehensive brand new agreement
on fisheries subsidies in the Doha rules negotiations, particularly for
prohibiting certain categories of fisheries subsidies that contribute to
overfishing and depletion of fisheries stocks, China's proposal on trade
remedies seems pretty truncated and inconsequential.
Yet, the Chinese proposal could face fierce opposition from the United States
which does not want any negotiated outcomes at the WTO's eleventh ministerial
meeting in Buenos Aires.
China says "transparency and due process in AD and CVD proceedings are
vital for interested parties on both sides to effectively defend their rights
and interests and for investigating authorities to make fair and impartial
determinations."
Given the considerable volume of work done on transparency and due process in
previous Doha rules negotiations since 2011, China says that it is time to
consider improvements in AD provisions.
The improvements in transparency and due process include further clarifications
in (a) "petitioner's standing" in Article 5.4 of the Anti-Dumping
Agreement (ADA), (b) "notice before initiation" in Article 5.5 and
6.13 of ADA, (c) "access to information" (ADA Articles 6.4, Articles
6.5.1), (d) "disclosure" (ADA Article 6.9), and (e) transparency and
due process in CVD proceeding.
China has listed the proposed amendments to the Anti-Dumping Agreement in
Article 5 on "initiation and subsequent investigation."
In Article 5 of the ADA, China wants that "no investigation shall be
initiated when domestic producers expressly supporting the application account
for less than 25% of total production of the like product produced by the
domestic industry."
China has elaborated the proposed amendment to Article 5 as follows:
5.4 An investigation shall not be initiated pursuant to paragraph 1 unless the
authorities have determined, on the basis of an examination of the degree of
support for, or opposition to, the application expressed by domestic producers
of the like product, that the application has been made by or on behalf of the
domestic industry. The application shall be considered to have been made
"by or on behalf of the domestic industry" if it is supported by
those domestic producers whose collective output constitutes more than 50% of
the total production of the like product produced by that portion of the
domestic industry expressing either support for or opposition to the
application. However, no investigation shall be initiated when domestic
producers expressly supporting the application account for less than 25% of
total production of the like product produced by the domestic industry. For the
purpose of this paragraph, the term "domestic industry" shall be
interpreted as referring to the domestic producers as a whole of the like
product, subject to the application of Article 4.1(i) and 4.1(ii)."
As regards evidence in Article 6, China says "as soon as an investigation
has been initiated, the authorities shall provide the full text of the written
application received under paragraph 1 of Article 5 to the known exporters and
shall make it available, upon request, to other interested parties involved.
Due regard shall be paid to the requirement for the protection of confidential
information, as provided for in paragraph 5."
Further, "the authorities shall, before a final determination is made,
provide all interested parties with a written report of the essential facts
under consideration which they intend will form the basis for the decision
whether to apply definitive measures. Interested parties shall have 20 days to
respond to this report and the authorities shall address such responses in
their final determination."
China also proposed amendments to "initiation and subsequent
investigation" in Article 11 of the Agreement on Subsidies and
Countervailing Measures." It has suggested the following amendment in
Article 11.2:
"An application under paragraph 1 shall include sufficient evidence of the
existence of (a) a subsidy and, if possible, its amount, (b) injury within the
meaning of Article VI of GATT 1994 as interpreted by this Agreement, and (c) a
causal link between the subsidized imports and the alleged injury. Simple
assertion, unsubstantiated by relevant evidence, cannot be considered
sufficient to meet the requirements of this paragraph. The application shall
contain such information as is reasonably available to the applicant on the
following:
(iii) evidence with regard to the existence of elements including financial
contribution, benefit and specificity of the subsidy in question."
These improvements in China's latest proposal seem to be a considerably scaled
down version as compared to China's earlier proposal circulated on April 24,
trade negotiators said.
China's last proposal had called for improvements on five "doable"
issues so to finalize an outcome at the World Trade Organization's eleventh
ministerial meeting in Buenos Aires in December.
The five issues identified by China include (i) enhancing transparency and
strengthening due process, (ii) preventing anti-dumping measures from becoming
"permanent", (iii) preventing AD measures from
"over-reaching", (iv) special consideration and treatment of small
and medium enterprises, and (v) transplanting similar provisions from the
Agreement on Anti-dumping (ADA) to the Agreement on Subsidies and Countervailing
Measures (ASCM).
China had also linked progress in trade remedies to an ambitious outcome in the
fisheries subsidies on grounds that it needs a "balanced" result in
the Doha rules negotiations.
But, at an informal open-ended meeting convened by the Chair for Doha rules
negotiations Ambassador Wayne McCook of Jamaica on 31 May, the US rejected
China's proposal, saying there was no basis for discussing the improvements
based on the Doha agenda on grounds that some members had not accepted the
continuation of Doha negotiations at the WTO's tenth ministerial conference in
Nairobi in December 2015.
The US also said it will not take part in any further discussions on issues
raised by China in its proposal for improving provisions governing trade
remedies.
The US position was not shared by members, particularly the friends of the
anti-dumping group led by Japan.
Some members had also ruled out any linkage between an outcome on fisheries
subsidies to improvements in rules governing trade remedies.
The US Trade Representative Ambassador Robert Lighthizer has said in his
prepared remarks recently that "looking ahead to December, we are pursuing
(a) successful ministerial in Buenos Aires this December that reinvigorates the
WTO [with the previous Uruguay Round Agreements]. We do not advocate a meeting
that seeks major deliverables or significant negotiated outcomes."
Further, according to a news report in the Financial Times, Ambassador
Lighthizer had also warned the WTO Director-General Roberto Azevedo that any
decision to label China "a market economy" would have
"cataclysmic" consequences for the body.
He told the US Senate Finance Committee that the US was eager to see changes in
the WTO's dispute resolution system.
According to the news report in the Financial Times, Ambassador Lighthizer
singled out a dispute brought last December by China against the European Union
whether it should be deemed a market economy as the "most serious
litigation that we have at the WTO right now."
Against this backdrop, it remains moot whether China will press ahead with its
proposal on improvements in the Anti-Dumping Agreement or remain silent when
push comes to shove, said a trade negotiator who asked not to be quoted. +
