Development of Chinese Trade Remedy System Presented by: Han Yong Deputy Director Antidumping Division No.2 BOFT, MOFTEC

Pre-WTO Situation b Study and Research started from Mid- 1980s b Chinese exports suffered a lot from AD, CVD and SG of other countries since 1979 b Due to rapid development of Chinese foreign trade, realizing the importance and necessity to establish its own trade remedy system

Pre-WTO Situation (Cont.) b Significant efforts put into and preliminary paid back in 1994 b Foreign Trade Law of PRC promulgated and entered in force on July 1, 1994 b Providing legal basis for establishment of Trade Remedy System of China b Articles 29, 30 & 31 stipulate AD, CVD & SG

Pre-WTO Situation (Cont.) b Article 32 stipulates Govt.’s authority and obligation of investigation b March 25, 1997, Antidumping and Anti- subsidy Regulation of PRC promulgated b Providing concrete rules for Chinese AD, CVD practices b Based upon this regulation, 1st AD case-- Newsprint-- initiated on Dec. 10, 1997

Pre-WTO Situation (Cont.) b 11 more AD cases afterwards, including Stainless steel, PS, etc. b No Anti-subsidy case and SG case before China’s accession to WTO

Post-WTO Situation b 4 years practices and experience b Problems and some pitfalls of Chinese Trade Remedy System b 1. Regulations too general b 2. Lack of transparency b 3. Too much discretion in investigation b 4. Some provisions inconsistent with WTO rules, etc.

Post-WTO Situation (Cont.) b Efforts put to revise and perfect TRS of China b In Dec. 2001, 3 new regulations--AD, AS & SG-- promulgated and becoming effective 1/1/2002 b Old Regulation split into AD and AS b SG Regulation newly formulated

Post-WTO Situation (Cont.) b Significance of 3 Regulations: b 1. Greatly enriching the content of TRS of China b 2. Providing more concrete and practicable rules for implementation b 3. Providing solid base for continuous development of TRS of China

Post-WTO Situation (Cont.) b 7 Newly initiated AD cases, including Coated art paper, PVS, Cold rolled steel products b 1st SG investigation on some Steel products b According to 3 Regu., MOFTEC formulated 16 rules for their implementation

Summary b Starting at a high level b Development and achievement widely seen b More efforts needed in future b Keep consistent with “Transparency and Due Process” b Combined with Chinese characteristics b Further improve the TRS by legislation and practices

Comparison Between Old and New AD Regulations b General Comments on Old Regulation: b 1. In general, reflecting the principle and content of WTO/AD agreement b 2. Giving Chinese Investigating authority a basic guidance b 3. Having some problems in implementation

Comparison Between Old and New AD Regulations (Cont.) b Modification focusing mainly on: b 1. Specificity & Practicability b 2. Unclearness b 3. Compatibility with WTO/AD Agreement b 4. Transparency and Due Process

b Delete “to protect relevant domestic industry”, instead concentrate on “maintaining foreign trade order and fair competition”. b No difference between the 2 on the scope of application Part I Purpose of Legislation & Scope of Application

Part II Determinations of Dumping and Injury b 1. Clarify division of power & obligations of investigating authorities b (1) MOFTEC b (2) SETC; & MOA if agricultural products b (3) The Customs: no longer involved in investigation

Part II Determinations of Dumping and Injury b 2. Dumping and Dumping Margin b (1) adding in 3 methodologies of calculation of DM b (2) introducing concepts of “all comparable factors when comparing” and “in the ordinary course of trade” b (3) considering country of origin

Part II Determinations of Dumping and Injury b 3. Injury and Injury Degree b (1)adding in “determination of threat of material injury”, “conditions of cumulative assessment”, “definition of Negligible”, “scope of injury assessment”, etc. b (2) Revising some articles as “how to evaluate the injury” and “consider other factors other than dumping.”

Part II Determinations of Dumping and Injury b 4. Other substantive article: b (1)New: “definition of Industry in an area”, “definition of like product.” b (2) modify the definition of domestic industry

Part III Investigation Procedure b 1. Submission of application b (1) Adding in “Applicant Qualification”--50% and 25% test b (2) Specifying the content of application b (3) Clarifying evidence required in the application

Part III Investigation Procedure b 2. Initiation of Investigation b (1) Adding in “60 days” for decision to be made b (2) Adding in “Notification of exporting countries before initiation” b (3) clarifying the definition of “interested parties”

Part III Investigation Procedure b 3. Investigation b (1) Adding in 2 more ways of investigation-- ”Hearings” & “On-the-spot verification” b (2) Adding in “treatment of confidential information” b (3) Add in “obligation of investigating authority in confidentiality”

Part III Investigation Procedure b 4. Determinations b (1) Adding in “Causality determination”; Besides 2 determinations b (2) Adding in MOFTEC’s “disclosure” obligations b (3) Modifying the usage of “BIA”

Part III Investigation Procedure b 5. Termination of Investigation b (1) Adding in circumstances of “non- existence of causality” & “Non-necessity of continuation of investigation” b Clarifying “de minimums”--2% b Clarifying determination of the whole procedure as well as individual country

Part IV Anti-dumping Measures b 1. Clarifying 3 AD measures: Provisional AD Measure; AD duty & Price Undertaking b (1) Adding in 1 more form of Provisional-- Letter of Guarantee b (2) Provisional can’t apply within 60 days after initiation

Part IV Anti-dumping Measures (Cont.) b 2. Price Undertaking b (1) Adding in new articles as “Suggestion of PU”, “PU’ impact on Investigation and determination”, “Timing for MOFTEC to accept PU”, “Continuation of Investigation” b (2) Revising the “consequence of violation of Undertaking”--BIA & Retrospective Levying

Part IV Anti-dumping Measures (Cont.) b 3. Levying AD duty b (1) Adding in “Timing of Levying”, “Methodology of Levying”, “Retrospectively levying for period of PAD applied” b (2) Revising and specifying articles

Part IV Anti-dumping Measures (Cont.) b 4.AD measure Application b (1) Clarifying that Issues concerning Duty or Levying Duty, Decision made by Customs Tariff Commission of State Council; Publicized by MOFTEC b (2) Other issue, decision made by MOFTEC

Part V Review b New Articles stipulate New-shipper Review, Sunset Review, Impact of Review procedure on AD measure application b Specifying, besides review on AD duty, review on the need of PU b Adding in some provisions for Interim Review

Part VI Other Articles b 1. Adding in “Judicial Review”, aiming at maintaining rights and interests of relevant interested parties b 2. Specifying the content and requirement of the Notice

Part VII Formulation of Rules Subordinate to the AD Regulation b 11 Implementation Rules made by MOFTEC in first half of 2002 b Concerning: Initiation, Hearing, On-the-spot Verification, Sampling, Questionnaire, Disclosure, Access to Non-confidential Information, Price Undertaking, New- shipper Review, Interim Review and Refund of AD Duty

Part VII Formulation of Rules Subordinate to the AD Regulation b Aim to increase the practicability and transparency, and keep consistent with WTO rules and obligation b Further Improvement and efforts

Development of Chinese Trade Remedy System Questions?

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