Antidumping rates to decline if U.S. declares China a market economy

Antidumping rates to decline if U.S. declares China a market economy    A U.S. congressional watchdog agency said antidumping rates on Chinese imports will likely decrease if the Commerce Department declares China to be a market economy.
   Because non-market prices are unreliable, Commerce uses price information from “surrogate” countries, such as India, to calculate the value of the imported products in these cases, limiting eligibility for individual rates to companies that show their export activities are subject to government control.
   “Companies that do not meet the criteria or do not participate in Commerce investigations receive ‘country-wide’ rates,” the Government Accountability Office said in a report released this week.
   Commerce’s non-market economy antidumping rates for Chinese goods are generally more than 20 percent higher than those applied to imports from market economies.
   “This is because average China country-wide rates were over 60 points higher than comparable market economy rates,” the GAO report said. “Individual China company rates were similar to those assigned to market economy companies, on average.”
   Commerce could end the use of surrogate price information and country-wide rates if it accepts China as a market economy.
   “These changes would have a mixed impact,” the GAO report said. “Duties would likely decline for Chinese companies not assigned individual rates. Individual company rates would likely diverge, with those that do not cooperate with Commerce receiving rates that are substantially higher than those that do cooperate.
   “In any case, it appears that the actual trade impact of the NME (non-market economy) methodology will decline as the portion of total export trade conducted by Chinese companies assigned individual rate increases and as the country-wide rates that largely account for the comparatively high average rates applied to China decline in importance,” the GAO report said.
   Due to increased concerns about China’s trade practices, Congress’ conference report on fiscal 2004 appropriations requested that the GAO review efforts by federal agencies responsible for ensuring free and fair trade with that country.