Cato Institute Examines Nonmarket Economy Antidumping Methodology

The Cato Institute's Center for Trade Policy Studies has recently published a trade briefing paper entitled "Nonmarket Nonsense: U.S. Antidumping Policy toward China". The briefing paper calls for the Bush Administration to take a "hard look" at its antidumping policy toward China, particularly the Commerce Department's nonmarket economy (NME) methodology, as well as some rules changes that the Commerce Department is considering.

The briefing paper notes that the outcome in NME cases is dictated by a series of subjective decisions, including the selection of the surrogate country and the selection of surrogate values. Specific examples from the recent Chinese Wooden Bedroom Furniture case are provided to show why the NME methodology needs to be reassessed. In addition, the briefing paper discusses DOC's proposed changes to its policies that could make it more difficult for Chinese and other NME exporters to obtain the Section A rate.

The trade briefing paper can be found at the following link: www.freetrade.org/pubs/briefs/tbp-022es.html.