FAIR’S FAIR: WHY CONGRESS SHOULD AMEND US ANTIDUMPING AND COUNTERVAILING DUTY LAWS TO PREVENT “DOUBLE REMEDIES”

Abstract

This work examines the US Department of Commerce’s (DOC’s) new policy of applying countervailing duty (CVD) law to imports from nonmarket economies (NMEs). Since 2007, the DOC has applied CVDs to several imports from the People’s Republic of China (China). The DOC has long considered China an NME for the purposes of antidumping (AD) duties. The DOC uses third country surrogate values in its AD calculation for products from NMEs. The DOC currently makes no adjustments to its AD calculation when applying both CVDs and AD duties to products from NMEs. The legality of the DOC’s new policy has not been challenged in the US court system. However, it is probably permissible under US law. The strongest argument for finding the policy illegal under US law is that Congress did not intend, in enacting the relevant AD and CVD statutes, to allow the DOC to impose CVDs on NMEs. The stronger argument, however, is that it is unclear what Congress intended. Because the DOC’s interpretation is reasonable, it is a permissible interpretation of the statute. After an analysis of the legality of the policy under US domestic law, this work seeks to assess the validity of the policy under WTO law. China has already requested a panel hearing at the WTO to resolve the matter. The case will be heard in early July 2009. For the sake of fairness and to comply with international obligations, this work argues that the Congress should amend US CVD and AD laws so that they simply level the playing field for domestic producers rather than punishing exporters from NMEs.