The US New Trade Act Strengthens The Dual Anti System, Sino US Trade Faces Challenges

In March 6th, the United States House of Representatives adopted the majority vote of 370 votes and 39 votes against the amendment of the 1930 year tariff law. It agreed to write "countervailing duty" on non market economies (such as China and Vietnam) after being written to the new amendment.

Legal people say that once the law comes into force, the United States will get a new legislative basis for Chinese enterprises, and Chinese corporate litigation will face higher costs and face more uncertainty.

An official who does not want to be named by the Fair Trade Department of the Ministry of Commerce of China said: "the United States is right."

Maintaining "double opposition"

The adoption of the newly revised trade bill by the US Senate and Senate is not groundless. It is related to a ruling before the United States circuit court of appeal.

At that time, the "double anti" Chinese tire enterprise Hebei Xingmao and its parent company GPX filed the "OTR lawsuit" lawsuit, and the United States Department of Commerce sued the International Trade Court of the United States (CIT, equivalent to the first instance court of such cases) and won the lawsuit. The US Department of Commerce refused to accept the appeal to the Federal Circuit Court of appeal.

However, the court of appeal of the federal circuit continues to support Chinese enterprises.

In December 19, 2011, the ruling of the Federal Circuit appeals court concluded that the existing law did not empower the US Department of Commerce to impose countervailing duty on products of non market economy countries.

That is, the United States Department of commerce must be authorized by Congress to implement countervailing measures against non market countries.

The ruling of the US Federal Circuit Court of appeal is widely believed to have shaken the "double anti" foundation of the United States. Data show that since October 2006, the United States has launched 32 countervailing investigations against China, amounting to tens of billions of dollars.

A lawyer from the United States told reporters that if the ruling became a precedent, all 32 cases should be reversed. The United States will also face huge amounts of countervailing duties and the withholding of deposits from customs.

In the future, the US Department of Commerce will also face enormous obstacles in its countervailing efforts.

For the defeated US Department of Commerce, if we do not accept the above judgment, we can only solve this problem through two ways: first, to "reverse the case" in accordance with the judicial process; two, to lobby members to amend the legislation.

In fact, in February 29th, Dave Camp, the chairman of the US House raising Committee, proposed a proposal to apply anti subsidy laws to non market economy countries and put it on the house of Representatives, which was supported by the American manufacturing alliance NAM, the American Textile Association Association NCTO, the US Department of Commerce and the American Steel Association.

Then the bill was passed in the US Senate and house of representatives in March 5th and 6th.

Jeopardize "ballast stone"

For the current practice in the United States, officials from the Ministry of Commerce of China told reporters: "the political significance of countervailing is greater than economic significance.

The concept of government intervention in the economy, the development stage and the characteristics of the pition period, so that subsidies, exchange rate and other concerns.

The US trade policy is becoming clearer and clearer. In general, the United States is becoming increasingly tough on China. In order to maintain the political balance at home, it is willing to shake the "ballast stone" of Sino US relations.

The term "ballast stone" has been mentioned many times during this year's vice president Xi Jinping's visit to the United States.

During the two sessions, Chinese Commerce Minister Chen Deming said in a media interview: "Sino US economic and trade relations are the important foundation and positive driving force for the Sino US relations." ballast stone is very heavy and plays a stabilizing role. If you want to challenge it, then you will create trouble and stumble your feet. "

In fact, the tough attitude of the United States in the field of foreign trade has appeared at the beginning of this year. This tough path is becoming clear in the US trade relations with China in 2012. In January 24, 2012, President Obama announced the establishment of an inter departmental trade law enforcement center in his annual state of the Union address.

It is understood that the "inter departmental trade law enforcement center" will serve as the office of the United States trade representative and other participation in the United States trade law enforcement departments in the federal government's primary platform.

Overseas media reports said the center will encourage American workers, businesses and farmers to take an active part in identifying and reducing unfair trade practices and barriers.

The industry pointed out that the establishment of the United States agencies on the surface is aimed at all foreign trade activities, but in fact, mainly for developing countries, especially China.

From a political perspective, since 2006, punitive tariffs have mainly been concentrated on products such as steel, paper, chemicals and so on, and the American industry that benefits is Obama's supporter.

This means that the "double reverse" of the US will be protected by legislation. In the future, if Chinese enterprises want to avoid the "double reverse" crisis, they will face not only the huge cost of litigation but also the greater uncertainty, and the trade tariffs between China and the United States are facing serious challenges.

Possible variables

Although Obama has not yet formally signed the bill until the press release, considering the current factors such as economy and general election, both the legal profession and the economic circles have expressed the possibility that this law will become law formally signed by Obama.

However, Zhang Jun, a lawyer from Beijing's Jia Run Road and law firm, told reporters: "although the bill has been passed by the house and Senate, there are two major problems."

"The first problem is that the new law will retrospect the time of applying countervailing laws to non market economy countries until November 20, 2006, which is against the provisions of the ninth paragraph of Article 1 of the constitution," Prohibition of retrospective legislation and the formation of judicial consensus in the United States through case law ".

"In the United States, although the area of criminal law does not involve the question of" non retroactive law ", there has been a consensus in the field of civil law and economic law that there is no need to trace back to legislation. In a case in 1994, this principle was further defined, and the US Congress passed the bill at the cost of" violation of constitution ", hoping to include all the anti subsidy decisions in China.

Statistics show that the first US "double counter" survey against China took place in October 26, 2006, and China's coated paper became the first victim.

In response, Zhang Jun said: "the Chinese enterprises in the OTR case and the Chinese enterprises that have experienced double anti" investigations have the right to sue the Supreme Court of the United States for "violation of the constitution".

For the second problems existing in the new law, Zhang Jun pointed out: "the bill, which requires the implementation of anti subsidy measures against non market economy countries, at the same time, changes the anti-dumping investigation procedures, effectively avoiding the" double relief "existing in the double reverse investigation of non market economy countries which the WTO had previously ruled.

"At the same time, because the provisions on how to modify the anti-dumping investigation procedures are very vague, this leaves a great discretionary power to the investigation institutions. On the one hand, it is not conducive to the Chinese government's appeal to the WTO. On the other hand, how to calculate and adjust the rights of the Chinese enterprises in anti-dumping and countervailing investigations will further expand."

For a long time, when calculating the extent of anti-dumping, the United States did not adopt the cost data of exporting countries, but calculated it at the price of the surrogate country, and the countervailing investigation was also based on the case study of the market economy country in the United States, which was considered to be "double relief" in the US jurisprudence, so it was not accepted by the US law for a long time.

Zhang Jun believes that once the "double relief" is popular, under the background of the rise of US trade protection and the sluggish manufacturing industry, we will continue to create new "double anti" cases and will seriously endanger Sino US economic and trade relations.

In response, Zhang Jun suggested that the Chinese government could consider prosecution.