Commerce Proposes 14 AD/CV Changes Focused on China, Other NMEs
Commerce Secretary Locke has announced 14 proposed changes to antidumping and countervailing duty practices, which are focused on non-market economies (including China), in support of the President’s National Export Initiative (NEI).
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Beginning this fall, the Commerce Department will seek input on and introduce these proposed changes in practice, in many cases through a public notice and comment procedure in the Federal Register, and will give stakeholders a full opportunity to comment.
(Commerce notes that cases against non-market economies comprise roughly one-third of the International Trade Administration’s AD/CV caseload.)
ITA Surveyed Current Practices to Determine How to Strengthen Them
Locke had directed the ITA to survey current trade remedy practices, including those for NMEs, in order to determine how Commerce could improve the effectiveness of its existing enforcement tools through administrative and regulatory changes.
Based on this review, Commerce has developed a list of 14 proposals to strengthen the administration of U.S. AD and CV duty laws, some that may be achieved through administrative action and some that may involve regulatory change, as follows.
7 Proposals May Involve Regulatory Change
Commerce states that the following seven proposals may involve regulatory change:
Companies may no longer be excluded. Commerce proposes elimination of the practice of allowing individual companies to seek exclusion from an AD or CV duty order based on their ability to show zero dumping margins or subsidy rates for three (AD) or five (CV) consecutive years. The new proposal would allow for companies to be removed from the process only upon the normal country-wide expiration of those duties.
Cash only beginning at prelim determination.Commerce is considering requiring importers to post cash deposits rather than bonds for imports that fall within the scope of an AD/CV duty investigation starting with the issuance of the preliminary determination (rather than following the imposition of an AD/CV duty order).
Tightened deadlines.Commerce proposes tightening the deadlines for submitting new factual information in AD/CV duty cases.
Strengthened certification process.Commerce also proposes strengthening the certification process for the submission of factual information.
New NME wage rate methodology.Commerce is considering adoption of a new methodology for valuing wage (labor) rates in NME cases by using surrogate wage rates that fully capture all labor costs (including benefits and taxes paid to workers by their employers) in the NME country.
Tightened NME rules on price inputs.Commerce also considers tightening the rules in NME cases for determining when the price of production inputs purchased from market economy countries will be substituted for its standard valuation for such inputs.
Strengthened accountability.Strengthening the accountability of attorneys and non-attorneys practicing before Commerce is also proposed.
7 Proposals May be Achieved Through Administrative Action
Commerce states that the following seven proposals may be able to be implemented administratively:
Use of export, VAT taxes (AD rate increase).Commerce is reconsidering its NME AD methodology to account for export taxes or value added taxes (VAT) included in the U.S. price that are not rebated upon export, just as in cases involving market economy countries. Where such taxes are present, this proposed change would result in an increase in AD margins.
Strengthened treatment of NME resellers. Commerce proposes strengthening the treatment of resellers and other non-reviewed parties in NME cases to ensure that such parties pay the full amount of AD duties.
Random respondent sampling.Commerce is considering expanded use of random sampling to select companies as individual respondents in AD investigations and reviews rather than choosing the largest exporters.
Strengthened company-specific rate practice. Commerce proposes strengthening its current practice regarding the issuance of company-specific AD rates in NME cases.
Clarified NME import prices. Commerce proposes to clarify its current NME practice for using import prices for valuing a production factor, to include all applicable freight and handling costs.
Required NME production inputs.Commerce also proposes to require companies to report production inputs for all products produced at each of their facilities -- not just those facilities that produced merchandise destined for the U.S. -- for use in its NME dumping calculations.
Clarification of CV SOEs.Commerce seeks to clarify its current CV duty practice to reiterate that it considers state-owned enterprises (SOEs) as constituting a “specific” group when they are alleged to be receiving countervailable subsidies from the government.
(See ITT’s Online Archives or 06/25/10 news, 10062534, for BP summary of Locke’s testimony before the Senate Finance Committee on U.S.-China trade issues and the NEI.
See ITT’s Online Archives or 02/05/10 news, 10020520, for BP summary of Commerce’s announcement of and details on the NEI.
See ITT’s Online Archives or 05/27/10 news, 10052761, for BP summary of the ITA’s request for comments on export competition for its NEI strategy.)
(Press release dated 08/26/10)