GAO: Eliminating Nonmarket Economy Methodology Would Lower Antidumping Duties for Some Chinese Companies
The Government Accountability Office (GAO) has issued a report entitled "Eliminating Nonmarket Economy Methodology Would Lower Antidumping Duties for Some Chinese Companies." The report, which is the fourth and final report on China import relief mechanisms, explain the special nonmarket economy (NME) methodology that the U.S. employs to calculate antidumping duties on products from China and other NME countries, analyze the application of antidumping duties to China over the last 25 years, compares the duty rates applied to Chinese products with the duty rates applied to products from market economy countries and explain the circumstances in which the U.S. would stop using its NME methodology to calculate antidumping duties on Chinese products.
The GAO found that on 25 occasions the Commerce Department applied duties to the same product from both China and one or more market economy. The antidumping duties imposed on Chinese products were over 20 percentage points higher than those applied to market economies because average China country-wide rates were over 60 points higher than comparable market economy rates. However, individual China company-specific rates were similar to those assigned to market economy companies.
The report concludes that the Commerce Department's application of the NME methodology has produced AD duties on Chinese products that are substantially higher than those applied to the same products from market economy countries. Changing ChinaÂs NME statusÂand thus eliminating the application of this methodologyÂwould have a variety of consequences. For example, the GAO notes that duty rates applied to companies that do not receive individual rates would likely decline and Chinese companies that cooperate in Commerce investigations may also receive comparatively low rates. However, the impact of these lower antidumping margins on overall China averages may be offset by application of high antidumping rates to individual Chinese companies that do not cooperate in antidumping investigations (i.e., receive adverse facts available). The report can be found at the following link: www.gao.gov/new.items/d06231.pdf.
In addition, GAO has prepared an e-supplement which contains a database of U.S. antidumping cases against China and selected other countries from January 1, 1980, through December 31, 2004. The e-supplement can be found here.
Labels: Antidumping
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