Deep interpretation of China's anti-dumping lawsuit against diamond saw blades

On December 3, China officially passed the World Trade Organization dispute settlement mechanism and prosecuted 13 anti-dumping measures initiated by the US Department of Commerce on Chinese products in the past few years.

China has filed a total of 13 cases against the WTO, including industrial products such as oil well pipes, aluminum extrusion materials, diamond saw blades, new energy products such as solar cells (boards), and agricultural products such as warm water shrimp. Based on the amount of US exports in the year before the final ruling of 13 product anti-dumping investigations, the annual export value of Chinese companies was 8.4 billion US dollars, which is rare in recent years.

The “packaging” prosecution has received much attention for a while. Behind the "packaging", it is more worth noting that China is using legal means to resolve the growing maturity of international economic and trade disputes. In this regard, Yang Guohua, deputy director of the Department of Treaty and Law of the Ministry of Commerce, accepted an exclusive interview today to interpret it.

US error calculation method leads to high taxation

Reporter: The 13 anti-dumping measures initiated by the US Department of Commerce against Chinese products in the past few years are inconsistent with the WTO rules.

Yang Guohua: We are telling the US Department of Commerce to conduct anti-dumping investigations. This kind of practice we call it an institutional error. Popularly speaking, the US Department of Commerce adopted the wrong target dumping calculation method in anti-dumping investigations and decisions. The so-called target dumping refers to the selective low-price dumping behavior of a country's export enterprises against specific buyers, regions or time periods of the importing country. The WTO Anti-Dumping Agreement regulates it as a strict exception. It not only strictly limits the conditions for recognition, but also requires the investigating authorities to make a full and reasonable explanation. But these two points, the US Department of Commerce did not do it.

Not only that, after determining that there is a target dumping, the US Department of Commerce also uses the zeroing method not allowed by the WTO Anti-Dumping Agreement to calculate the dumping margin, and all the premium transactions are zero, based only on the portion of the export price below the normal value. The transaction calculates the margin of dumping. The direct consequence of this practice is that the dumping of the original has not been dumped, and the fact that only a small amount of dumping has been identified as a large dumping has seriously violated the legitimate rights and interests of Chinese enterprises. In addition, the US Department of Commerce also refused to give export companies a separate tax rate, miscalculation of unfavorable facts and other series of non-compliance with WTO rules.

The reason why these several anti-dumping cases were packaged together for prosecution is because these practices must be removed from the roots. If the case is won, all the problems in the future anti-dumping investigations will not exist.

In fact, before this, we have been negotiating with the United States, but the United States insists that it is right. In this case, China, as a member of the WTO, has prosecuted the United States using the WTO dispute settlement mechanism.

One to two years from start to resolution

Reporter: According to the WTO dispute settlement procedure, when will the case produce the final result?

Yang Guohua: According to the dispute settlement procedure of the World Trade Organization, the case will be negotiated by both parties of the original defendant. If the consultation fails, an expert panel composed of three persons will be handed over to review whether the conduct involved in the case is in conformity with the WTO regulations. Will be announced after one year.

If one party is dissatisfied with this result, it can appeal to the Appellate Body in the WTO Dispute Settlement Mechanism, and the decision of the Appellate Body will be the final ruling. Once it has been made, it must be implemented, similar to our judicial two-trial final review system. Basically, the mechanism takes one to two years from start-up to resolution. It depends on the complexity of the case and the work of the panel and the appellate body.

Normal mentality

Reporter: In recent years, we have used the WTO dispute settlement mechanism in dealing with trade frictions with other countries. How do you view the effectiveness of this mechanism?

Yang Guohua: In the past 12 years, we have had 31 economic and trade disputes resolved through the WTO dispute settlement mechanism. Among them, China has 12 as plaintiffs and 19 as defendants. This also shows that we will often use this mechanism.

The occurrence of trade disputes is normal, especially for China, a major trading country, so we must look at trade frictions with a normal heart. The key issue is how to resolve the trade friction. In the past, whoever had a big fist and who was big, who had the final say, or simply fought a trade war and retaliated against each other. We often make a metaphor. If there is no court in the society and the dispute is inevitable, how can we solve it? It can only be bullied according to the law of the jungle.

However, with the establishment of the official WTO dispute settlement mechanism and its maturity, its role as the "International Trade Court" has received increasing attention. Prosecuting a dispute to the "court" is a peaceful and rational solution. The WTO dispute settlement mechanism is also effective. This mechanism has "compulsory jurisdiction". As long as members are prosecuted, the WTO must accept the case.

This mechanism also has "enforcement power", and if the losing party does not implement it, the WTO can authorize retaliation. From a practical point of view, as of today, the WTO has accepted 438 cases and made nearly 200 rulings in just 16 years. These rulings have been generally respected by WTO members. In most cases, the respondent has revised its own measures. In a very small number of cases, the respondent temporarily provided compensation in the manner permitted by the WTO dispute settlement procedure, or won the case. The party temporarily suspends the concession (retaliation).

It is worth mentioning that more than half of these cases are developed countries v. developed countries. For example, after the establishment of the WTO, the first case to be decided was Venezuela v. The United States, and the WTO ruled that the United States lost the case, and the United States subsequently amended the measures. Therefore, we also believe that the law that can “protect the weak” is a good law.

Finally, we find that the effectiveness of this mechanism is related to the detailed legal interpretation and adequate legal arguments in the rulings of the panel of experts and the Appellate Body. The report of the expert group is generally 400 pages long, and the report of the Appellate Body is generally 150 pages long. It provides a detailed explanation and argumentation on the issue of whether the measures involved are in conformity with the relevant agreements. Therefore, the WTO ruling is "to take people by reason." We believe that the "reasonable" law is a good law.

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