GAO: Commerce’s hands tied in applying CVD to China

GAO: Commerce’s hands tied in applying CVD to China    A congressional watchdog agency pointed out in a report released Friday that the U.S. Commerce Department faces both practical and legal barriers to assessing countervailing duties against Chinese imports.
   The Government Accountability Office (GAO) blames a 1984 federal appeals court decision that affirmed the Commerce Department lacks authority to apply countervailing duties against imports from non-market or state-run economies, such as China.
   The GAO report said the Commerce Department could possibly seek to reclassify China as a market economy or individual Chinese industries as “market oriented” to apply countervailing duties.
   In addition, the GAO report said the Commerce Department could challenge the court decision, but the results are uncertain. The World Trade Organization rules also do not explicitly preclude either alternative.
   “Commerce would face challenges, regardless of the alternative adopted,” the GAO report said. “Chinese subsidies remain difficult to identify and measure.
   “Employing third-country information or ‘fact available’ may help, but would not eliminate the difficulties,” the report added. “Commerce lacks clear authority to fully implement China’s WTO commitment on use of third-country information in CVD cases.”
   The GAO report also concluded that it’s “unclear” whether applying countervailing duties would provide much relief that U.S. producers already obtain from antidumping duties. Countervailing duties tend to be lower than antidumping duty assessments.
   “Regardless of China’s status, some duties might need to be reduced to avoid double counting of subsidies,” the GAO report said. “Commerce lacks clear authority to make such corrections when domestic subsidies are involved.”