Countervailing Is The Mainstream Of Trade Friction

U.S. Department of Commerce recently announced two strengthening Trade The announcement of relief law enforcement policy is on the current. Countervailing The two method of identifying the orientation of state-owned enterprises in the investigation is the method of determining the value of substitute countries in the non dumping market.

Tu Xinquan, vice president of the China World Trade Organization Research Institute of University of International Business and Economics, said that the United States should be vigilant against the application of countervailing measures, because its targets will no longer be confined to specific ones. enterprise Or the industry, but the industrial policy of China as a whole, which will have an impact on China's future international trade environment.

The scope of specificity is expanded.

The highly targeted subsidy has become the main objective of the United States to strengthen trade remedy law enforcement. Such special subsidies include enterprises' specificity (one government subsidy for one or more specific companies), industrial specificity (one government subsidy for one or more specific industries) and regional specificity (a government's subsidy for production in specific areas within its territory).

Such subsidies refer not only to the state, but also to local governments. Especially in the process of promoting the development of local economy, local governments have provided support in many aspects such as land concessions, tax relief and return, enterprise support development funds, brand support funds and so on. For example, in order to introduce foreign capital to promote development, the eighth article of the income tax law of foreign invested enterprises and Foreign Enterprises promulgated in 1991 stipulates that, for productive foreign investment enterprises, with a period of ten years or more, the enterprise income tax is exempt from the first and second years from the beginning of the profit year, and the enterprise income tax is reduced by half from third to fifth years. This is the most important income tax preference for China to encourage foreign capital to enter. However, this policy was recognized as "subsidy" by Canadian side in Canada's composite wood flooring countervailing case, and was cited by American enterprises in the same name.

"At the moment, our country is in the period of industrial upgrading and transformation, and the state has certain supportive policies for industries with potential for development. Although these policies are not specifically aimed at export oriented enterprises, it is undeniable that many enterprises have benefited from it, which has also become the basis for sanctions in other countries." Tu Xinquan said that the state-owned enterprises have become the main body of the exclusive investigation, which means that the scope of recognition of the enterprises affected by subsidies has been expanded.

In the trade rights enforcement act of the United States, the recognition of state-owned enterprises is not only a government control but also a market economy status. State owned enterprises are also considered as one of the public institutions. In the agreement on subsidies and countervailing measures formulated by WTO, subsidies from public institutions are also included in the category of countervailing measures.

"This means that the state-owned enterprises not only subsidized by the state will become the main body of the anti-dumping investigation, but the downstream enterprises with their trade will also be considered to be subsidized through trade, so they may be included in the investigation." He said, "this will expand the impact of countervailing investigations."

Directly referring to competitive industries

Compared with antidumping and safeguard measures, the United States only started to introduce countervailing measures as a trade remedy for China since 2006. In July 27, 2005, the US House of Representatives passed the "trade rights enforcement act of the United States". Its main content is to authorize the US Countervailing Law to import from non market economies (such as China), which laid the legal foundation for its implementation.

In October 31st, the following year in October 31st, the US New Page Paper Co filed a complaint with the US Department of Commerce and the International Trade Commission, asking for anti-dumping and countervailing investigations on coated paper from 3 countries, including China, Indonesia and Korea. So far, the US has not stopped the pace of adopting countervailing measures against Chinese enterprises.

These cases have had an important impact on some domestic industries. As the world's largest exporter of aluminum materials, its share in the Alcoa market reached 20.1% in 2009. Insiders said that in April this year, the United States launched a "double reverse" survey of domestic aluminum products in China in September 7th this year, which may result in the rapid loss of the aluminum share market share in the US market.

Tu Xinquan said that in the past 3 years, the industry of countervailing investigations in the United States has gradually extended from labor intensive textile industry to steel, electromechanical and other technology and capital intensive industries. These are the industries that were launched in early 2010, the US export revival plan, which tried to restore the export capacity of the US manufacturing industry. These competitive advantages in the United States are affected by the upgrading and transformation of China's industry. It is because he has to apply countervailing measures that are more influential than anti-dumping to restrain competition between the two enterprises.

"Relative to anti-dumping, the countervailing measure's lethality lies in that he refers directly to the preferential conditions offered by the government for the development of enterprises. If he continues to launch countervailing work in a number of industries, he can question the government's industrial policy orientation, which will have a great negative impact on the role and image of the government in the market economy and directly affect China's wider recognition of the status of" market economy state ". He said, "because the new industries such as new energy and high-speed railways have good market prospects in the world, the Chinese government has provided many preferential policies for this purpose. If there is a prejudice against China's industrial policy in the world, it will increase barriers to enter the international market for these emerging industries in the future."

It is noteworthy that the two policy of strengthening trade relief enforcement adopted by the US Department of commerce is derived from a 14 year plan of severe trade remedy law announced by the US government in August 26th this year. Its content is to strengthen relevant regulations on unfair foreign trade activities such as dumping, and proposes a series of reforms. According to the website of the US Department of Commerce, the proportion of employment in the export sector accounts for 7% of the total number of employed people in the United States, accounting for about 30% of the total number of jobs in the manufacturing sector. With the high unemployment rate in the US, the industry expects more stringent trade remedy policies.

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In August 26, 2010, the US Department of Commerce announced 14 proposals for strict trade remedy law enforcement.

1. in the original anti-dumping investigation and review investigation, we should change the practice of selecting the respondent enterprises according to the maximum import volume, and adopt more random methods to select the responding enterprises.

2., in the anti-dumping investigation for non market economy countries, it is more difficult for the responding enterprises to get a separate tax rate.

3. the import price should include all freight and processing costs.

4. requests the respondent enterprises to report the raw material input of all the products produced by all the factories, rather than only those factories that produce the products exported to the US.

5. reiterates that in the countervailing investigation, state-owned enterprises are identified as a specific group of enterprises.

6. reconsider the handling of export tax and value-added tax.

7. increase the handling of distributors and unexamined parties to ensure full payment of anti-dumping duties.

8., a new method of assessing wage levels, that is, using alternative country wage standards to cover all wage costs in non market economy countries, including the benefits and taxes paid by employers.

9. the abolition of the anti dumping or countervailing measures taken by the enterprises involved in the past 3 consecutive years of 0 years or 0 years of 5 years' countervailing duty review rate is eliminated.

10., a more stringent standard review is adopted to determine whether the prices of imported raw materials from the market economy countries can be used.

11. consider whether it is necessary to ask the importer to pay cash margin after the initial anti-dumping or countervailing duty, instead of the previous letter of guarantee.

12. strictly submit the factual information certification process to the US Department of Commerce.

13. increase the responsibilities and obligations of lawyers and non lawyers agents who engage in trade relief in the US;

14. strictly submit the deadline for new fact information to the US Department of Commerce in anti-dumping or countervailing investigations.