China Tire wins U.S. anti-subsidy or is over-interpreted

A decision from the United States Federal Circuit Court of Appeals for the United States of America may cause a huge change in the "anti-subsidy" era of US trade with China.

On December 19th, local time, the United States Federal Circuit Court of Appeals issued a judgment on “GPX International Tire Company and Hebei Xingmao Tyre Co., Ltd. v. United States Government Case” (hereinafter referred to as the “Engineering Tire Lawsuit Case”): In non-market economy conditions Government financial assistance cannot be considered a subsidy, and countervailing laws do not apply to non-market economy countries.

Yesterday (December 21st), the person in charge of the Fair Trade Bureau of the Ministry of Commerce stated in a speech that the counter-subsidy investigation conducted by the US against China over the years violated both WTO rules and US legal basis, and he hoped that the US could correct it without recognizing it as soon as possible. The wrong practice of anti-subsidy investigation of Chinese products under China's market economy status.

However, trade experts believe that it is more difficult to subvert the US anti-subsidy policy toward China through this case. It is now a difficult period for the recovery of the world economy. It is possible that the United States will not slow down its trade protectionism in the future.

Lack of legal basis

From the surface of things, the direct beneficiary of the US Federal Circuit Court of Appeals is Hebei Xingmao and a dozen other Chinese tire companies involved, but in the long run, this is likely to subvert the “double reaction” of US trade remedy against China. the way.

In August 2008, the U.S. Department of Commerce imposed a 14% countervailing duty on Hebei Xingmao, while the countervailing duty rates imposed on other companies were 2.45% and 6.85%. Hebei Xingmao and the US parent company GPX were dissatisfied with the above results and entrusted a lawyer to appeal to the US International Trade Court, and asked the court to temporarily prohibit the U.S. government from charging the company with a pre-deposit.

The Ministry of Commerce also represented the Chinese government as a plaintiff intervening party to participate in litigation. In October 2010, the U.S. International Trade Court ruled that the U.S. Department of Commerce deemed China to be a non-market economy country. Under the circumstance of adopting an alternative country method, it simultaneously imposed anti-dumping duties and countervailing duties with double relief and demanded that the U.S. Department of Commerce stop collecting taxes. Countervailing duties on Chinese companies involved in the case.

At the time, the U.S. International Trade Court stated that the U.S. Department of Commerce needs to abandon countervailing duties on Chinese products or modify the policies and procedures for anti-dumping and anti-subsidy investigations in non-market economies.

However, the U.S. Department of Commerce did not elect both, but appealed the case to the United States Court of Appeals for the Federal Circuit. After the investigation, the court made the same ruling on the 19th as the U.S. International Trade Court.

According to the latest ruling of the tire lawsuit, since the U.S. Department of Commerce resumed its anti-subsidy investigation against China at the end of 2006, many of its anti-subsidy decisions have not complied with the existing US laws.

The person in charge of the Fair Trade Bureau of the Ministry of Commerce of the People's Republic of China also stated that so far, the U.S. Department of Commerce has initiated 30 anti-dumping and anti-subsidy investigations against Chinese products without the authorization of domestic laws. This kind of abuse of trade remedy measures is typical of trade protectionism. practice.

Or being over-interpreted

If the U.S. "anti-subsidy" countervailing to China is ancient, it will undoubtedly be a major issue. In China, from the Ministry of Commerce to the enterprises are waiting for new progress in this matter.

The above-mentioned person in charge of China’s Ministry of Commerce believes that although the legal proceedings in the case are not yet completed, the Chinese side hopes that the United States will abide by the laws and regulations, respect the judicial decisions of the United States, and correct as soon as possible its countervailing subsidies for Chinese products without recognizing the status of China’s market economy. Investigation of wrong practices.

However, an expert who did not want to be named told the Daily Economic News reporter that the tire winning case may be over-interpreted. He believes that the US decision to win a case in a tire case may have several considerations: First, it is due to the fairness of maintaining domestic legal procedures, and secondly, it may be because the United States has more cases of trade remedy against China, giving Chinese companies some "sweetness." Maintain trade partnerships, etc. However, it will be difficult for the United States to overturn the countervailing system for China.

The Hebei Xingmao Tire Success Case also sparked a discussion about Europe and the United States not recognizing the status of China’s market economy. Some netizens stated that “the cancellation of countervailing means that the United States still does not recognize China’s market economy status and that China may be more injured in the future.”

However, Huo Jianguo, dean of the Research Institute of the Ministry of Commerce, told the Daily Economic News reporter that some people think that European countries and the United States do not recognize China’s market economic status as a discrimination against China, or even negation of China’s reform and opening up. This view is inaccurate. of.

He explained that the status of China’s market economy is not recognized. From the trade perspective, only the European and American countries can determine the production environment of other reference countries when deciding on the anti-dumping tariff rate against China, which was a pair that they reserved at the time when China joined the WTO. China’s trade sanctions measures are not a negation of China’s trade liberalization policy.