Journal Article

Countervailing Duty against China: Opening a Pandora's Box in the WTO System?

Dukgeun Ahn and Jieun Lee

in Journal of International Economic Law

Volume 14, issue 2, pages 329-368
Published in print June 2011 | ISSN: 1369-3034
Published online June 2011 | e-ISSN: 1464-3758 | DOI: https://dx.doi.org/10.1093/jiel/jgr015
Countervailing Duty against China: Opening a Pandora's Box in the WTO System?

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In this article, we trace the jurisprudential history of the applicability of US countervailing duty (CVD) law to non-market economies (NMEs). We describe how, since the USA reversed its long-standing policy of not imposing CVDs on NMEs, concurrent application of antidumping (AD) duties and CVDs has become the country's major trade remedy action against China. Although the WTO panel rejected China's claim of WTO-inconsistency regarding the current US practices, the US Court of International Trade firmly ruled that the Department of Commerce's double counting of AD duties and CVDs against China violates domestic regulation. Finally, the WTO Appellate Body ruled that this ‘double remedy’ violates the rule to levy CVDs ‘in the appropriate amounts’ under Article 19.3 of the Agreement on Subsidies and Countervailing Measures. We will argue that, although the Appellate Body's ruling is praiseworthy in preventing an illogical practice, its legal reasoning may give rise to some doubts and controversy when the negotiating history of Article 19 is examined. We will also analyze key features of current double remedy practices in the USA and Canada.

Journal Article.  16829 words.  Illustrated.

Subjects: Financial Law ; Public International Law ; Economics

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