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  • OTVI.USA
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American Shipper

Bush administration imposes anti-subsidy law on China

Bush administration imposes anti-subsidy law on China

The Bush administration announced a preliminary decision on Friday to apply U.S. anti-subsidy law on imports of coated free sheet paper from China.

   Imports of this commodity will now be assessed countervailing duties ranging from 10.9 percent to 20.35 percent, the Commerce Department said in a release.

   This decision alters a 23-year old bipartisan policy of not applying the countervailing duty law to non-market economy countries.

   “Just as China has evolved, so has the range of our tools to make sure Americans are treated fairly,” said Commerce Secretary Carlos M. Gutierrez in a statement Friday. “By acting on the petition filed last October, the United States today is demonstrating it continued commitment to leveling the playing field for American manufacturers, workers, and farmers.”

   The petition was filed by U.S. glossy paper manufacturer NewsPage Corp. of Dayton, Ohio. NewsPage’s petition marks the first time since 1991 that a U.S. company formally requested the Commerce Department to countervail a non-market economy, such as China. In its petition, NewsPage alleged that several Chinese companies were recipients of subsidies such as tax breaks, debt forgiveness and low-cost loans.

   From 2005 to 2006, the Commerce Department noted that imports of coated free sheet paper products from China increased 177 percent in volume, and were valued at $224 million in 2006.

   In 1984, the Commerce Department adopted a policy of not applying the U.S. countervailing duty law to non-market economies. The department reasoned that subsidies had no measurable economic impact in the 1980s Soviet-style economies that were under consideration at the time. This policy was upheld by the Court of Appeals for the Federal Circuit in the 1986 Georgetown Steel case. Since then, the antidumping law has been frequently used to address unfair trade practices.

   Last Thursday, the Court for International Trade reaffirmed the Commerce Department’s position that the “Georgetown Steel” decision was not a bar to applying the countervailing duty law to non-market economies, but instead was a recognition of the department’s broad discretion in this area.

   “The Bush administration will continue to vigorously enforce U.S. trade law with respect to China,” said Gutierrez, echoing the White House’s increased trade frustration with China. “Since 2001, we have issued 31 antidumping orders against China, compared to the 24 orders put into place between 1993 and 2000.”

   The Bush administration continues to pressure China to implement aspects of its World Trade Organization obligations. Also during the past two years, the administration has threatened to raise the level of controls for certain U.S. exports to China.