Legal Issues and Regulation

CVD Law Cannot Apply to Non-Market Economies Including China, According to the Court of Appeals for the Federal Circuit

A recent ruling by the Court of Appeals for the Federal Circuit (CAFC) in GPX Int'l Tire Corp. v. United States has confirmed that the U.S. Department of Commerce (DOC) may not impose both antidumping and countervailing duties on imports of goods from countries which the US treats as nonmarket economies (NME), and calls into question the future of certain trade actions.  Moreover, the ruling, which takes practical effect on February 2, 2012, may lead to the reimbursement of countervailing duties already paid by exporters from certain NMEs.

The CAFC’s ruling essentially affirms – although on different grounds - a decision from the lower U.S. Court of International Trade (CIT) that the current methodology applied by the DOC in terms of countervailing and antidumping duties on Chinese imports is invalid, due to the fact that "double counting" would arise.  WTO agreements allow for the imposition of anti-dumping duties to remedy a situation where sales in export markets are at prices below valuation within the country of origin, with attendant material injury to domestic industry occurring in the country into which such goods are imported.  Additionally, the WTO agreements permit for the imposition of countervailing duties where subsidies in export countries allow exporters to sell at a price so low as to cause harm to domestic manufacturers in the importing countries.

Further Information to this subject can be found under "Legislative and Regulatory Update".