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US trade probes 'double whammy' for Chinese firms
2007-08-24
China Daily
The United States is violating World Trade Organization (WTO) rules by conducting both anti-dumping and countervailing investigations against Chinese products, Vice-Commerce Minister Gao Hucheng said yesterday.
He was referring to a recent policy shift that reversed 23 years of US trade practice by treating China - which is classified as a non-market economy - the same way other US trading partners are treated in disputes involving government subsidies.
US companies have always been allowed to file anti-dumping cases, seeking penalty tariffs on the grounds that Chinese products were being sold in the United States below cost.
But since March, they have also been able to seek more penalty tariffs - known as countervailing duties - claiming improper government subsidies on everything from loans from State-owned Chinese banks to direct government support.
Since November, the US has launched dual investigations against five types of Chinese imports - glossy paper, pipes and tubes, welded steel pipes, laminated woven sacks and off-the-road tires.
"What the Chinese government opposes the most is the fact that the US... not only breached its precedents but also abandoned its usual practice of the past 23 years," Gao told a news briefing.
"Investigations and measures undertaken by the United States will lead to double taxation," Gao said, adding such measures run counter to the WTO rules.
He explained that the United States uses the costs of a surrogate country in deciding whether Chinese products are sold in the US market at unfairly low price, as China is not regarded as a full market economy.
So in case certain Chinese products are deemed to be subsidized by the government, the exporters will already be punished by the anti-dumping duties. The duties now overlap with possible countervailing duties.
"This will directly impact $860 million worth of China's exports, more than 500 enterprises and 70,000 jobs in the country," he said.
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