The World Trade Organization Appellate Body finds against prior U.S. CV duties on China.
The World Trade Organization Appellate Body (AB) on Tuesday released a report upholding a previous WTO determination that certain U.S. Commerce Department countervailing duties on goods from China violated WTO rules.
Specifically, the AB decision aligned with a March 2018 WTO compliance panel finding that the U.S. Commerce Department failed to explain in several CV proceedings how Chinese government intervention in the market resulted in domestic prices for certain inputs deviating from a market-determined price and that Commerce failed to consider price data on the record.
“An investigator’s determination of how prices in markets are in fact distorted as a result of government intervention must be based on positive evidence,” states a summary of the AB decision.
Following a WTO dispute initiated by China in May 2016 to determine whether the U.S. was complying with an earlier WTO ruling regarding U.S. CV duties imposed on certain imports, Commerce revised the duty determinations in 12 of 17 relevant CV investigations on China.
The AB also upheld a compliance panel finding that evidence used by Commerce in several CV cases wasn’t specific enough to establish that China was providing unfair subsidies to industries.
The AB report, however, upholds a WTO compliance panel finding that Commerce’s determinations of what constitutes a “public body” align with WTO rules.
“Today’s appellate report recognizes that the United States has proved that China uses state-owned enterprises (SOEs) to subsidize and distort its economy,” the Office of the U.S. Trade Representative said in a statement.
USTR continued, “Nonetheless, the majority in the report says that the United States must use distorted Chinese prices to measure subsidies, unless the U.S. provides even more analysis than the hundreds of pages in these investigations. This conclusion ignores the findings of the World Bank, OECD working papers, economic surveys and other objective evidence, all cited by the United States.”
USTR added that the U.S. is “determined to take all necessary steps” to ensure a level playing field so China and its SOEs stop injuring U.S. workers and businesses.