Newsletter
Trade Remedies Anti-dumping, Countervailing, Safeguard measures www.chongbanphagia.vn
No 5, Quarter I – 2015
WTO Dispute Settlement Mechanism
An Effective Tool to Address Trade Remedy Disputes
WTO CENTER VIETNAM CHAMBER OF COMMERCE AND INDUSTRY
www.antidumping.vn
Introduction NO 5, QUARTER I – 2015
Newsletter
Trade Remedies
“Trade Remedies Newsletter” is the quarterly publication of the Trade Remedy Council (TRC) – WTO Center – Vietnam Chamber of Commerce and Industry.
Anti-dumping, Countervailing, Safeguard measures www.chongbanphagia.vn
No 5, Quarter I – 2015
www.antidumping.vn
The News Column of this Newsletter will provide you with updated information on the situation and proceedings of trade remedy cases (including Anti-dumping, Anti-subsidy and Safeguard measures) applied in Vietnam as well as worldwide affecting directly or directly Vietnamese exports. The In-Focus Column concentrates on analyzing emerging trade remedies cases; researching and commenting on hot trade remedy issues which have significant effects on Vietnamese businesses. In addition, the Column entails provisions on proceedings and procedures of trade remedy investigation that enterprises may concern.
WTO Dispute Settlement Mechanism
An Effective Tool to Address Trade Remedy Disputes
WTO CENTER VIETNAM CHAMBER OF COMMERCE AND INDUSTRY
We do hope that the Newsletters on “Trade Remedies” will become an useful publication for businesses to enhance their understanding and ability as trade remedy investigation overseas as well as accustome to trade remedy tools against unfair imported goods. The newsletter is edited with the co-operation of IDVN Lawyers.
TRADE REMEDY COUNCIL – WTO CENTER – VIETNAM CHAMBER OF COMMERCE AND INDUSTRY. Address: No.09 Dao Duy Anh Str, Dong Da District, Hanoi Phone: +84 4 35771458; Fax: +84 4 35771459 Email: banthuky@trungtamwto.vn Website: www.wtocenter.vn/www.antidumping.vn For more information, please visit our website http://www.wtocenter.vn
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Publishing license: 22/GP-XBBT issued by Ministry of Information and Communication on April 13th,2015
Content NO 5, QUARTER I – 2015
NEWS
Trade remedy measures are the most frequent targets of dispute settlement activity under the WTO, accounting for over 50% of the total cases heard by the WTO panels and Appellate Body Page 12
02 2014 is shaping up as a difficult year for Vietnamese exports in the history of dealing with oversea trade remedy proceeding — Page 10
Overview of the world’s antidumping, anti-subsidy and safeguard investigations in the first quarter of 2015 07
The United States released preliminary determination of the 9th administrative review on Frozen Warmwater Shrimp from Vietnam
08
Canada issued the final affirmative conclusion on the dumping and subsidies with regards to certain oil country tubular goods from Vietnam
IN FOCUS 11
09
Overview of trade remedies cases against Vietnamese exports in 2014
WTO Dispute Settlement Mechanism: An Effective Tool to Address Trade Remedy Disputes NEWSLETTER ON TRADE REMEDIES 1
N E W S No 5, QUARTER I – 2015
Overview of the world’s anti-dumping, anti-subsidy and safeguard investigations in the first quarter of 2015
No
Investigating Country
Date of decision
Investigated Country
Product
Actions
INVESTIGATIONS RELATING TO VIETNAM 1
Canada
Vietnam, India, Taiwan, Indonesia, Philippines, Korea, Thailand, Turkey, Ukraina
03/03/2015
Oil Country Tubular Goods
The affimative final determination of dumping and subsidy (for details, see page..)
2
EU
Vietnam, Laos, China
25/02/2015
Certain Ring Binder Mechanisms
Initiation of an expiry review of anti-dumping measures against imports from China and extended to Vietnam, Laos
THE INVESTIGATIONS AGAINST CHINESE PRODUCTS COULD BE EFFECTED TO VIETNAM 3
India
China
08/01/2015
Tyre Curing Presses
Conduct a sunset review of anti-dumping duty
4
India
China, Israel
05/01/2015
Synchronous Digital Hierarchy Transmission Equipment
Continue imposing anti-dumping duty for 1 year after the expiry review
5
Australia
China
26/03/2015
Drawn Stainless Steel Sinks
The final finding in the dumping and subsidy investigation. The final anti-dumping duty: 5.0%; countervailing duty: 52.6%
6
Australia
China
23/02/2015
Silicon
Preliminary affirmative AD determination. The provisional anti-dumping duty: 14.1-22.5% , the provisional countervailing duty: 3.7-35%
7
Australia
China
09/02/2015
Sodium Bicacbonate
Revoke anti-dumping measures following a sunset review
8
Australia
China
19/01/2015
Polyvinyl chloride flat electric cables
Preliminary affirmative determination. The provisional dumping margins: 6.4-10.3%
05/03/2015
9
Canada
China 04/02/2015
2 NEWSLETTER ON TRADE REMEDIES
Photovoltaic Modules and Laminates
Preliminary affirmative dumping conclusions by CBSA. The provisional anti-dumping and anti-subsidy duty rates are 9:14 - 286.1% Preliminary affirmative conclusion by CITT on injury caused by dumping and subsidy
No
Investigating Country
Investigated Country
Date of decision
Product
Actions
THE INVESTIGATIONS AGAINST CHINESE PRODUCTS COULD BE EFFECTED TO VIETNAM 10
Canada
China, Brazil, Greece, Korea, Mexico
30/01/2015
Certain Copper Tube
Adjusting the dumping and subsidy margins following mid-term review
11
Canada
China, Korea, Turkey
09/01/2015
Concrete Reinforcing Bar
Affirmative conclusion on injury caused by dumping from three countries and subsidy from China
12
Canada
China, Taiwan
05/01/2015
Fasteners
Affirmative injury determination, CITT continues imposing anti-dumping and anti-subsidy duty following the sunset review
13
EU
China, Malaysia
27/03/2015
Certain Iron or Steel Fasteners
Continue imposing anti-dumping duty against China and transshipping goods from Malaysia after the sunset review, the duty rate: 22.9 - 74.1%
14
EU
China, Taiwan
25/03/2015
Stainless Steel Cold-Rolled Flat Products
The decision imposes preliminary anti-dumping duty rate for: China: 24.3 25.5%; Taiwan: 10.9 - 12.0%
15
EU
China, Malaysia
11/03/2015
Certain Molybdenum Wires
Initiate a circumvention investigation against Malaysia (antidumping duty was originally imposed on Chinese products)
16
EU
China
11/03/2015
Ceramic Tiles
Amending the anti-dumping duty for certain companies following the partial mid term review
17
EU
China, Russia, Belarus, Ukraina
27/01/2015
Welded Tubes and Pipes of Iron or Non-alloy Steel
Continue imposing anti-dumping duty against China, Russia, Belarus; the rate: 90.6%; 10.1-20.5%; 38.1%. Stop anti-dumping duty against Ukraine following the expiry review
18
EU
China
22/01/2015
Monosodium Glutamate
Continue imposing anti-dumping duty following the expiry review , the duty rate 33.8 - 39.7%
19
EU
China
22/01/2015
Citric Acid
Continue imposing anti-dumping duty following the expiry review, the duty rate: 33.8 - 42.7% and approve the price- undertaking
20
Korea
China, India
15/01/2015
PET Film
Conduct a sunset review of anti-dumping duty
21
Korea
China
07/01/2015
Float Glass
Continue imposing anti-dumping duty after a sunset review, the duty rate: 12:04% - 36.01%
31/03/2015
22
United States
China, Canada, India, Oman
Initiate anti-dumping and anti-subsidy investigation (no subsidy investigation with Canada) PET Resin
10/03/2015
File a petition for antidumping and countervailing duty investigations NEWSLETTER ON TRADE REMEDIES 3
NEWS
No
No 5, QUARTER I – 2015
Investigating Country
Date of decision
Investigated Country
Product
Actions
THE INVESTIGATIONS AGAINST CHINESE PRODUCTS COULD BE EFFECTED TO VIETNAM 23
24
United States
United States
China
Australia, Brazil, China, Indonesia, Portugal
06/03/2015
06/03/2015
Conducting a review of anti-dumping and anti-subsidy duties Prelim affirmative determination by USITC on injury caused by dumping from Australia, Brazil, China, Indonesia, Portugal, China and Indonesia subsidy
Uncoated Paper Initiate anti-dumping investigations and anti-subsidy investigations with China, Indonesia
11/02/2015
19/03/2015 25
Oil Country Tubular Goods
USITC vote to continue imposing anti-dumping duty following the sunset review Tetrahydrofurfuryl Alcohol
United States
China
26
United States
China
05/02/2015
Kitchen Appliance Shelving and Racks
USITC vote to continue imposing anti-dumping and anti-subsidy following a sunset review
27
United States
China
26/01/2015
Boltless Steel Shelving
USDOC preliminarily confirms the existence of subsidy
28
United States
China
21/01/2015
Passenger Vehicle and Light Truck Tires
USDOC preliminarily confirms the existence of dumping
29
United States
China
21/01/2015
Certain Crystalline Silicon Photovoltaic Products
USITC issues the final determination to confirm injury caused by dumping and subsidy
30
United States
China
20/01/2015
Barium Carbonate
USITC votes to continue imposing anti-dumping duty following the expiry review
31
United States
China, South Africa
14/01/2015
Ferrovanadium
USITC votes to continue imposing anti-dumping duty following the expiry review.
32
United States
China
12/01/2015
Tow-behind Lawn Groomers and Parts Thereof
USITC votes to continue imposing anti-dumping duty following the sunset review
33
United States
China
08/01/2015
Calcium Hypochlorite
USITC issues the final determination to confirm injury caused by dumping and subsidy
34
United States
China
08/01/2015
Steel Wire Rod
The final decision imposes anti-dumping duty rate: 106.19 - 110.25%
35
United China, Russia States and Ukraina
05/01/2015
Cut-to-length Carbon Steel Plate
Conduct a sunset review of anti-dumping duty
36
Turkey
28/01/2015
Hot Rolled Coil Steel
Initiate an anti-dumping investigation
Conduct a sunset review of anti-dumping duty
06/02/2015
China, France, Japan, Romani, Slovakia, Russia, Ukraina
4 NEWSLETTER ON TRADE REMEDIES
No
Investigating Country
Investigated Country
Date of decision
Product
Actions
THE INVESTIGATIONS AGAINST CHINESE PRODUCTS COULD BE EFFECTED TO VIETNAM 37
Turkey
China
22/01/2015
Certain Fittings
Conduct a sunset review of anti-dumping duty
38
Turkey
China, Taiwan, Korea, Malaysia, Thailand
21/01/2015
Woven Fabrics of Synthetic Filament Yarn
Continue imposing anti-dumping duty after the sunset review
OTHER INVESTIGATIONS IN THE WORLD Preliminary affirmative dumping determination, securities of 12.4 30.6% will be imposed
39
Australia
Thailand
16/03/2015
Certain Hollow Structural Section
40
Australia
Korea, Malaysia, Sigapore, Spain, Taiwan, Thailand, Turkey
13/03/2015
Steel Reinforcing Bar
Preliminary affirmative dumping determination. Securities will be imposed.
41
Australia
Taiwan, Indonesia
05/03/2015
Rod in Coils
Preliminary affirmative dumping determination. Dumping margin: Indonesia: 10.6%, Taiwan: 7.5%. Securities will be imposed.
42
Australia
France
30/01/2015
Newsprint
Preliminary affirmative dumping determination. Securities will be imposed: 5.1%
43
Canada
United States, EU
18/02/2015
Refine Sugar
Conduct a sunset review of anti-dumping duty from 2 countries and countervailing duty from EU
44
Canada
Netherlands
05/02/2015
Greenhouse Bell Pepper
Conduct a sunset review of anti-dumping duty
45
EU
India
11/03/2015
Tubes and Pipes of Ductile Cast Iron
Initiate an anti-subsidy investigation
46
EU
Turkey
27/02/2015
Certain Rainbow Trout
Terminate the anti-dumping investigation because the plaintiff withdraws the petition; The decision imposes official anti-subsidy duty rate: 6.7 - 9.5%
47
EU
Korea
18/02/2015
Certain Tube and Pipe Fittings of Iron or Steel
Conduct a partial mid term review of anti-dumping duty
48
EU
Indonesia
22/01/2015
Monosodium Glutamate
The decision imposes final anti-dumping duty rate: 7.2-28.4%
49
EU
Bosnia and Herzegovina
20/01/2015
Zeolite A Powder
Partial re-investigation
50
Korea
Japan
21/01/2015
Valves for Pneumatic Transmissions
The decision imposes an official anti-dumping duty rate: 11.66 - 23.97%
NEWSLETTER ON TRADE REMEDIES 5
NEWS
No
No 5, QUARTER I – 2015
Investigating Country
Date of decision
Investigated Country
Product
Actions
OTHER INVESTIGATIONS IN THE WORLD 19/03/2015 51
52
53
United States
Canada
United States
Australia
United States
Supercalendered Paper
02/03/2015
File a petition for antidumping and anti-subsidy investigations
12/03/2015
Initiate an anti-dumping investigations. Silicomanganese File a petition for antidumping and anti-subsidy investigations
20/02/2015
India, Brazil, Korea, Mexico, Thailand, Japan
Initiate an anti-subsidy investigation
31/03/2015
Prestressed Concrete Steel Wire Strand
USITC votes to continue imposing anti-dumping, anti-subsidy duty following a sunset review Conduct a sunset review of anti-dumping duty and countervailing duty separately for India
06/02/2015
23/03/2015
USITC votes to continue imposing anti-dumping and anti-subsidy following the sunset review
United States
India
55
Turkey
Iran
28/01/2015
Low Density Polyethylence – LDPE
Conduct a sunset review of safeguard measures
56
China
Japan, Korea, United States, Taiwan
30/01/2015
Phenol
Terminate anti-dumping measures because the sunset review is not required
54
Commodity Matchbooks
Conduct a sunset review of anti-dumping and countervailing duty
06/02/2015
6 NEWSLETTER ON TRADE REMEDIES
The United States released preliminary determination of the 9th administrative review on Frozen Warmwater Shrimp from Vietnam The Department of Commerce (DOC) on March 2nd, issued the preliminary results of the 9th administrative review on the antidumping order on shrimp from Vietnam. 25.76%. These preliminary rates are lower than those of the eighth administrative review (4.98 – 9.75% for mandatory respondents and 6.37% for voluntary respondents, and 25.76% for the country wide entity)
CCORDING TO THE PRELIM, mandatory respondents are subject to the rates from 0.00% to 1.5%; the separate rate is 0.93% and the country-wide rate is
A
However, these lower rates are merely prelim. For next steps, DOC is supposed to conduct the on-site verification of the mandatory respondents and the final determination is expected to be issued within 120 days since the publication of the preliminary decision on the Federal Register. The final results of the ninth review will apply to shipments to United States during the period from 01/02/2013 to 31/01/2014.
Summary of Anti-dumping rates on Shrimp from Vietnam through administrative reviews Rates (%) Date of issuance
Mandatory Respondents
Voluntary Respondents
POR 1 (16/07/2004 to 31/01/2006)
N/A
N/A
N/A
POR 2 (01/02/2006 to 31/01/2007)
09/09/2008
0 – 0.1
4.57
25.76
POR 3 (01/02/2007 to 31/01/2008)
08/09/2009
0.08-0.21
4.57
25.76
POR 4 (01/02/2008 to 31/01/2009)
29/09/2010
2.95 – 4.89
3.92
25.76
POR 5 (01/02/2009 to 31/01/2010)
31/08/2011
0 – 1.15
1.04
25.76
POR 6 (01/02/2010 to 31/01/2011)
04/09/2012
1.23 – 1.27
1.25
25.76
POR 7 (01/02/2011 to 31/01/2012)
10/09/2013
0.0
0.0
25.76
POR 8 (01/02/2012 to 31/01/2013)
24/09/2014
4,98 - 9,75
6,37
25.76
POR 9 (01/02/2013 to 31/01/2014) (preliminary)
02/03/2015
0 – 1.5
0.93
25.76
Reviews
Country-wide
NEWSLETTER ON TRADE REMEDIES 7
NEWS
No 5, QUARTER I – 2015
Canada issued the final affirmative conclusion on the dumping and subsidies with regards to certain oil country tubular goods from Vietnam On March 3rd, 2015, Canada Border Services Agency (CBSA) issued its final conclusions on the two trade remedy proceedings: an anti-dumping investigation on Certain Oil Country Tubular Goods originating from Taipei, India, Indonesia, Philippines, Korea, Thailand, Turkey, Ukraina, Vietnam and a countervailing duty investigation on the same products from India, Indonesia, Philippines, Thailand, Ukraina and Vietnam.
T
HE PROCEEDINGS WERE INITIATED BY CBSA on July 21st 2014 following the petition from two Canadian companies: Tenaris Canada and Evraz North Amer-
ica Inc. Subject merchandise of the investigation are oil country tubular goods, which are casing, tubing and green tubes made of carbon or alloy steel, welded or seamless, heat-treated, regardless of end finish, having an outside diameter from 60.3 mm to 339.7 mm, mainly classified into the HS codes 7304 and 7306.
Countries
As scheduled, the Canadian International Trade Tribunal (CITT) continues its injury investigation and is expected to issue the final conclusion on April 2nd, 2015 regarding whether the Canadian domestic industry is injured or threated with a risk of being injured by the dumped and/or subsidized imports and whether it is necessary to imposed antidumping and countervailing measures on these subject merchandise.
8 NEWSLETTER ON TRADE REMEDIES
Amount of subsidy
Chinese Taipei
2,6 – 37,4
N/A
India
0,0 – 37,4
1.571 – 39.443 Rupee
Indonesia
6,4 – 37,4
598.072 – 6.578.792 Rupiah
Republic of Korea
0,0 – 37,4
N/A
The Philippines
0,0 – 37,4
N/A
Thailand Under this final decision, all the concerned Vietnamese exporters are subject to 37.4% dumping margin and 4,722,664 VND/ton subsidy margin.
Margin of Dumping (%)
28 – 37,4
N/A
0,0 – 37,4
N/A
Ukraine
37,4
N/A
Vietnam
37.4
4,722,664 VND
Turkey
Under this final decision, all the concerned Vietnamese exporters are subject to 37.4% dumping margin and 4,722,664 VND/ton subsidy margin
Overview of trade remedies cases against Vietnamese exports in 2014 2014 is shaping up as a difficult year for Vietnamese exports in the history of dealing with oversea trade remedy proceeding. It witnessed the largest number of investigations (on anti-dumping, anti-subsidy and safeguard) as well as different features of these proceedings as opposed to previous cases.
Products
Investigating Country
Date of initiation
Note/Updates
ANTI-DUMPING INVESTIGATION Granite
Turkey
12/12/2014
Anti-dumping duty circumvention investigation – In process
Cold Rolled Stainless Steel Welded Tubes
Turkey
12/12/2014
Anti-dumping duty circumvention investigation – On process
Melamine Table Ware and Kitchenware Products
India
28/10/2014
In process
Plastics Processing Machines
India
14/10/2014
In process
Oil Country Tubular Goods
Canada
21/07/2014 Anti-dumping and countervailing duty investigations; Provisional anti-dumping duty: 53.2%
Zinc coated Steel Steel Nails
Australia United States
11/7/2014
In process
19/06/2014 Anti-dumping and countervailing duty investigations; Provisional anti-dumping duty: 93.42 - 323.99%
COUNTERVAILING INVESTIGATION Oil Country Tubular Goods
Canada
21/07/2014 Anti-dumping and countervailing duty investigations; Provisional countervailing duty: 19%
Steel Nails
United States
19/06/2014 Anti-dumping and countervailing duty investigations; Provisional countervailing duty: 0.17 – 8.35%
SAFEGUARD INVESTIGATION Cell phone
Turkey
05/12/2014
In process
Cold Rolled Stainless Steel Welded Tubes
India
19/09/2014
In process
Polyester Filament Partially Oriented Yam
India
28/02/2014
Investigation terminated, no safeguard measures imposed as no evidence of injury
Indonesia
12/02/2014
Alloy steel
NEWSLETTER ON TRADE REMEDIES 9
NEWS
No 5, QUARTER I – 2015
2014 – A RECORD YEAR IN THE NUMBER OF INVESTIGATIONS IN 2014, Vietnamese exports were subject to a total of 13 trade remedy investigations by foreign authorities, including 7 anti-dumping investigations and/or anti-circumvention investigations, 2 anti-subsidies investigations and 4 safeguard investigations. The increase in the number of trade remedy cases against Vietnamese products in 2014 is consistent with the worldwide upward trend and could be anticipated. Recently, the prevalence of Free Trade Agreements (FTAs) has brought new opportunities for various economic sectors including manufacturing industry in particular. At the same time, these FTAs have narrowed the scope of traditional policy tools (i.e tariffs or subsidies…) that government may use to support domestic enterprises. As an immediate inevitable reaction, many domestic industries tend to rely on trade remedy measures which are allowed to be maintained after FTAs. In addition, internal economic difficulties results in the more frequent use of these measures in order to deal with the competition of the imports. This warning has come to reality when the WTO reports for the three consecutive years from 2011 to 2013 identify a gradual increase of trade remedy measures. As for Vietnam, 2014 should be the best illustration.
Firstly, Vietnamese exports have faced many countervailing investigations in new markets. While most Vietnamese enterprises and associations have been grown accustomed to countervailing duty proceedings in the U.S., new markets such as the European Union and Canada started to present new threats of these investigations in 2014.
trade remedy in the world, which reasonably explains for the continuous case initiations against Vietnam. It appears that exporters of non-major products and to nonmajor importing markets may still be subject to the same rigour of foreign trade remedy measures. This is clearly evidenced by the numerous investigations prior to and in 2014.
Secondly, Vietnam has to deal with trade remedy cases against nonmajor exports and initiated by nonmajor exporting markets. Three cases of the total 13 trade remedy investigations were initiated by Turkey and the other three by India. Meanwhile, the turnover of Vietnam’s exports to India and Turkey in 2013 were 2.8 million USD and 1.6 million USD respectively, accounting for a small portion of the total export turnover. However, both India and Turkey are in the top five of the most frequent users of
In conclusion, new developments of trade remedy proceedings in 2014 against Vietnam imply a risky trend for the exporters. This would require them to be aware of the threat of being imposed with trade remedy measure, regardless of the products and the markets. Thus, only by adopting a vigilant and active approach, with full understanding and thorough preparation for trade remedy proceedings will Vietnamese exporters to be able for successful defence in these types of cases.
2014 – THE YEAR OF TRADE REMEDIES INVESTIGATIONS WITH “DISTINCT FEATURES” IN ADDITION to dealing with a surge in the number of trade remedy cases, Vietnam exporters in 2014 witnessed various unusual features of such these investigations.
10 NEWSLETTER ON TRADE REMEDIES
2014 is shaping up as a difficult year for Vietnamese exports in the history of dealing with oversea trade remedy proceeding
WTO DISPUTE SETTLEMENT MECHANISM:
AN EFFECTIVE TOOL TO ADDRESS TRADE REMEDY DISPUTES
The World Trade Organization (WTO) - an international economic institution established for the purpose of trade liberalization – has been applauded as an effective trade dispute settlement forum for countries members that goes beyond political and diplomatic influence. For the last 20 years since the inception in 1995, the number of 500 disputes brought to the Dispute Settlement Body (DSB) of the WTO is 2.5 times as big as 200 disputes settled under GATT 1947 – the predecessor of the WTO. DINH ANH TUYET, NGUYEN THI PHUONG THAO - IDVN Lawyers
IN FOCUS
12 NEWSLETTER ON TRADE REMEDIES
TRADE REMEDY measures are the most frequent targets of dispute settlement activity under the WTO, accounting for over 50% of the total cases heard by the WTO panels and Appellate Body. This observation implies a preference among WTO country members to select the WTO mechanism to solve disputes over trade remedy and signal that this can be an effective mechanism for challenges to antidumping, countervailing duties and safeguard measures. This paper provides an overview of the trade remedy and WTO dispute settlement interaction to elaborate the trend as well as concerns over the effectiveness of this mechanism to solve disputes in trade remedy
Trade Remedy and the WTO Dispute Settlement Mechanism RADE REMEDY in nature is an administrative measure imposed on the imports after the importing authority completes the investigation process and determine. In other words, this is an administrative procedures by the importing country. As such, any disputes arising in the investigation and the application of trade remedy measures (including disputes over the regulations, procedures, or investigation practice) falls within the jurisdiction of the importing country. Accordingly, foreign exporters can
either file a complaint to the investigating authority or a challenge to the judicial body of the importing country to solve these disputes. In this regard, the authority receiving the complaint or the tribunal conducting domestic judicial review apply their domestic trade remedies legislation. In this process, the consideration of internal and political issues of the importing country during the review in many cases is inevitable. As a result, resolving disputes in this way do not always guarantee an appropriate, fair and meaningful to interested parties, particularly to the interest of foreign exporters. This observation highlights the need of relying on a more independent and impartial system such as the WTO Dispute settlement mechanism to solve disputes over trade remedy measures though the mechanism is not available for private entities. Measures Violating WTO rules but Allowed by the Domestic Law of the Importing Country Domestic judicial review is not an ideal forum when the disputed measure relates to a regulation, procedure or a practice which is not forbidden by the law of the importing country. Under these circumstances, foreign exporters who are direct stakeholders in the trade remedy proceedings hardly obtain any meaningful relief. This is a typical situation faced by Vietnamese exporters to the United States market. In the antidumping investigation and reviews against Vietnamese shrimp, the U.S Department of Commerce has applied zeroing when calculating the dumping margin for Vietnamese exporters, resulting in artificially high margins for the mandatory respondents. It has also adopted the country-wide rate policy to place a number of companies into a disadvantaged position by assigning them with a single antidumping rate based the adverse facts available. In this regard, it should be noted that under the WTO rules, adverse facts available are applied only to non-cooperative exporters. However, the Commerce applies these facts to companies who fail to establish an absence of government control in law and in fact with respect to exports, regardless of whether those companies fully cooperates and provides the Commerce with all the information at its request. Both zeroing and country wide rate policy are not prohibited by the U.S law and the Com-
Under this circumstance, any complaint to the Commerce or challenge to the U.S Court of International Trade (judicial review) is not practical and helpful to Vietnamese exporters merce as the investigating authority has full discretion in applying these measures in antidumping proceedings against non-market economies like Vietnam. Under this circumstance, any complaint to the Commerce or challenge to the U.S Court of International Trade (judicial review) is not practical and helpful to Vietnamese exporters. In fact, zeroing has been applied by the U.S in a number of antidumping investigations and reviews against imports from many other countries including China, Thailand, Mexico, Ecuador, Brazil, Japan and the EU. All of these countries have to invoke the WTO dispute settlement mechanism to force the U.S to stop this practice. For Vietnamese exporters, WTO is also the unique mechanism where they can obtain a ruling on the inconsistency of zeroing and country wide rate (DS404 and DS429). The Judicial System in the Importing Country’s Failure to Guarantee an Effective and Thorough Solution Even when the provisions in domestic trade remedies laws and regulations by and large mirror the provisions of the relevant WTO agreement, the judicial review system in many cases do not provide an effective solution. This results from two main reasons. First, the judicial system of the importing countries
maintain certain weakness in terms of expertise and experience to solve trade remedy disputes which are heavily technical. This is particularly true in those countries where there has not been a clear separation in terms of authority among legislative, executive and judicial branches. The weakness in expertise and experience as well as political influence in those countries explains why most of the WTO challenges against safeguard measures target developing countries such as Indonesia, Ukraine, Argentina, Turkey, Chile, Ecuador, Republic of Korea and Republic of Dominican. Vietnamese exporters should note of the recent challenge by Taiwan against Indonesia’s safeguard measure on the steel products because the measure is also extended to Vietnamese steel. Second, the judicial review in the importing countries in many cases cannot bring a thorough and complete solution. The dispute over the application of non-market economy methodology in the simultaneous antidumping (AD) and countervailing duty (CVD) investigations is a typical example. When applying this methodology, DOC ignore the actual domestic sale price of the subject merchandise or the domestic price of the production factors in the calculation of the normal value. Rather, it uses the surrogate values in a third country with market economy to construct the cost of production. In this way, any impact from government subsidies on the export price of the merchandise is au-
IN FOCUS
14 NEWSLETTER ON TRADE REMEDIES
tomatically offset by the antidumping duty. As such, the application of the nonmarket economy methodology in simultaneous AD and CVD investigations results in the double remedy for the same “fault”. In reaction to such treatment of the Commerce, China challenged the issue to both the U.S Court of International Trade (judicial review) and the WTO. It obtained a favorable result in both battles. However, with the judicial review, the best ruling available to Chinese enterprises is a remand order from the CIT which would require DOC to review and adjust its determination. Meanwhile, in the implementation of the WTO ruling, the U.S government is forced to ensure to avoid double counting. Soon after the Appellate Body’s decision, the U.S issued a new regulation which allows to exclude double counting when the Commerce conducts the antidumping and countervailing duty investigations at the same time against products originating from non-market economies.
WTO DISPUTES OVER TRADE REMEDY Trade remedy disputes refer to those arising between the importing and exporting countries regarding legal regulations and investigation practice that the former adopt during the process of investigation or review in order to impose or maintain anti-dumping duties, countervailing duties and safeguard measures against the imported goods from the exporting countries Examples: • •
Two WTO cases DS404 and DS429 address trade remedy disputes between Vietnam and the United States where Vietnam challenged the consistency of the latter’s zeroing and country wide rate policy in the administrative reviews over the shrimp originated from Vietnam. DS397 involves the dispute between China and European Union on the former’s individual treatment applied in the antidumping investigation against fasteners of China.
% trade remedy disputes on WTO dispude Others Safeguard
9% Subsidies
WTO: A Reliable Dispute Settlment Mechanism
48%
21% 22% Anti-dumping
Sourse: Constructed by the author from: ITH THE OBJEChttps://www.wto.org/english/tratop_e/dispu_e/dispu_agreements_index_e.htm TIVES of providing certainty and predictability for the bers from time to time and found to violate the WTO multilateral trading system, the WTO dispute settlement body in rules in all of these cases. Similarly, the “public body” concept has been brought to the WTO Appellate Body its practice creates precedent in two cases between the U.S and China where the U.S and therefore jurisprudence. Accordingly, jurispruwas found violating its obligations under the Agreedence has served as a supporting source of law to the ment on Subsidy and Countervailing Measures by the WTO covered agreements and the basis to interpret terms and conditions in these agreements. In this way, way it determined the existence of subsidy and calculated the subsidy margins for China state owned coma number of unclear terms and regulations in various panies in the countervailing investigations targeting agreements of the WTO have been clarified and elaboChina products. rated. The WTO jurisprudence assists later panels and Appellate Body to rule with regards to similar issues While the WTO dispute settlement mechanism has and forms the basis for country members to assess the outstanding advantages to solve trade remedy disconsistency of trade measures adopted by themselves putes, the government and enterprise of many counor trading partners with WTO obligations. tries maintain hesitant and concerned over it, even when they are aware that this is the unique mechaIn fact, it is the consistency in the dispute settlement nism to solve their dispute. Their concerns largely rebody’s interpretation of the WTO law that has encourmains with the issue of implementation. Filing a case aged country members to use this mechanism to rebefore the WTO and obtaining a favorable ruling solve disputes, including trade remedy cases. For would not result in meaningful solution if the violatinstance, zeroing has been examined by the WTO ing country does not fully implement the report of the under no less than 20 cases by various country mem-
NEWSLETTER ON TRADE REMEDIES 15
WTO panel and Appellate Body. The concerns are factsupported. Until now, there have been at least 5 cases where the violating countries have been found not implementing the ruling and 7 cases where the complainant has to invoke the retaliation procedure by suspending their WTO obligations against the violating country. Reasons for non-implementation lie with obstacles in the domestic law as well as issue of political importance to the violating country. However, comparing with 101 cases where full implementation has been achieved, the picture on the WTO implementation is not as such gloomy. The current operation of the dispute settlement system illustrates a high ratio of ruling implementation. Moreover, in fact, WTO members have more incentives to implement the ruling than otherwise. Failure to implementation not only results in a threat of retaliation but also
has negative impacts on the creditability of that country and increases the likelihood of the situation where it could not obtain a full implementation from other violating countries. The failure also affects the certainty and predictability of the system – which is the objectives of establishing and developing the WTO dispute settlement, thus requires members to be cautious before engaging in any refusal attempts. Implementation, as a whole, is the issue of every dispute settlement mechanism, including the WTO. Therefore, while the possibility of having a WTO decision implemented should be considered, it should not be a decisive factor in determining whether to use the WTO mechanism in international trade dispute in general and in trade remedy in particular, especially when the WTO mechanism is unique in providing a practical and effective relief.
ZEROING AND COUNTRY WIDE RATE Zeroing is a methodology of dumping margin calculation where the investigating authority treats negative dumping margins as zero and disallows the offset between positive and negative margins. As a result, it increases the overall dumping margins. For instance, in the three sale transactions of product X by Company A Transaction 2
Transaction 1 Normal Value
10
15
20
Export price
5
20
20
-5
5
0
Difference
Without Zeroing
Dumping margin With Zeroing
Transaction 3
Difference
(-5) + 5 + 0 = 0 0
Dumping Margin
5
0
0+5+0 = 5
Country wide rate: The U.S Department of Commerce adopts a presumption that all companies within Vietnam are essentially operating units of a single, government-wide entity and thus, should receive a single anti-dumping duty rate, or in other words, the country-wide rate based on adverse facts available. Firms who manage to establish an absence of government control in law and in fact are granted with the all other rates based on the weighted-average of the rates for individually-investigated (mandatory) respondents. Antidumping duty rate
Foreign firms Mandatory respondents
Cooperate Non- Coperate
Non mandatory respondents
Individual rate Country wide rate based on AFA
Participate in the separate rate test + establish an absence of government control
All others rate equal to the weighted average of the individual rates
Participate in the separate rate test + failure to establish an absence of government control
Country wide rate based on AFA
Not participate in the separate rate test
Country wide rate based on AFA
The WTO Center is set up under the auspices of the Vietnam Chamber of Commerce and Industry (VCCI) to provide legal supports for Vietnamese businesses on international trade issues. Our mission is to improve awareness, capacity and voice of the Vietnamese business community to actively participate into negotiations and gain the most benefits from WTO and other trade agreements of Vietnam, as well as to prevent and deal with their possible negative impacts.
IDVN is one of the most experienced law firms in Vietnam in regard of international trade remedies (anti-dumping, anti-subsidy and WTO dispute resolution). The firm has thoroughly trained lawyers and analysis experts on international trade as well as senior advisors from the US. Throughout the last ten years, IDVN is regularly selected to protect Vietnamese corporations and government in a vast number of anti-dumping and anti-subsidy cases related to Vietnam initiated by the US and EU as well as WTO disputes (for example, anti-dumping cases involving warm water shrimps, steel pipes, plastic bags, PSF fibers‌). In Vietnam, IDVN has represented foreign exporters in the first anti-dumping investigation and managed to attain the lowest tariff rate possible.