TWN Info Service on WTO and Trade Issues (Apr17/14)
28 April 2017
Third World Network
China calls for "balanced" agreement in all Rules areas
Published in SUNS #8450 dated 26 April 2017
Geneva, 25 Apr (D. Ravi Kanth) -- China has called for a "balanced"
agreement to improve several core provisions in the anti-dumping, and subsidies
and countervailing measures agreements in the Doha Rules negotiations that are
currently preoccupied largely with the disciplines for fisheries subsidies,
trade envoys told SUNS.
Over the past many months, a group of major industrialized countries such as
the United States, the European Union, Australia, New Zealand on behalf of the
Friends of Fish coalition, as well as developing countries like Peru,
Argentina, and several key members of the ACP (African, Caribbean, and Pacific)
group have upped the antennae for negotiating new provisions on prohibiting
fisheries subsidies while remaining silent on the much- needed improvements in
trade remedies, said an Asian trade envoy who asked not to be quoted.
The US had also remained reluctant to address other outstanding issues in the
Doha rules dossier in the run-up to the WTO's tenth ministerial conference in
Nairobi, in December 2015. It sought agreement only on fisheries subsidies in
the Doha rules dossier.
Later, the EU and Japan, which is the coordinator for the Friends of
Anti-Dumping group, nearly gave up their demands for considerable improvements
in both anti-dumping and horizontal subsidies because of opposition from the
US, the envoy suggested.
Against this backdrop, China's comprehensive proposal on trade remedies based
on the Doha Work Program of 2001 assumes considerable importance.
The Work Program called for clarifying and improving several provisions in the
Agreement on Anti-Dumping (ADA) and Agreement on Subsidies and Countervailing
In its submission on "Trade Remedies" on 24 April, China has
emphasized that the best option open to WTO members for countering the endemic
"economic slowdown", "protectionism," and "the rapidly
changing international market place" is to "seek balanced results of
the Rules Negotiations to the furtherance of the rules-based multilateral
Given the "desperate" application of AD and CVD measures by many
members which have resulted in trade disputes, China has sought
"doable" outcomes on issues that were already discussed in the Doha
Rules Negotiating Group.
The list of issues includes "determinations of injury/causation, the
lesser duty rule, public interest, transparency and due process, interim
reviews, sunset, duty assessment, circumvention, the use of facts available,
limited examination and all others rates, dispute settlement, the definition of
dumped imports, affiliated parties, product under consideration, and the
initiation and completion of investigations."
As regards improvements in the subsidies and countervailing measures, China has
listed issues such as the definition of a subsidy, specificity, prohibited
subsidies, serious prejudice, export credits and guarantees, and the allocation
The list of "doable" issues in both AD and CVD areas at this juncture
for immediate discussions in the Rules Negotiations, according to China, must
cover tentatively the following five issues:
(1) Enhancing transparency and strengthening due process.
(2) Preventing AD measures from becoming "permanent".
(3) Preventing AD measures from "overreaching".
(4) Special consideration and treatment of SMEs.
(5) Transplanting similar provisions from ADA to ASCM.
China has maintained that "transparency and due process in AD and CVD investigation
proceedings are vital for interested parties on both sides to effectively
defend their rights and interests, and for investigation authorities to make
fair and impartial determinations."
Based on the convergence brought on "transparency and due process" in
the negotiations up until now, China has demanded specific improvements in the
(i) the petitioner's standing [in Article 5.4 of the Agreement on
Anti-Dumping], notice before initiation [ADA Article 5.5],
(ii) access to information [ADA Article 6.4, Article 6.5.1],
(iii) disclosure [ADA Article 6.9], evidentiary standards for subsidy
allegations [ASCM Article 11.2 (iii), Article 11.3],
(iv) preventing AD measures from becoming "permanent" [ADA Article
11.2, Article 11.3, including provisions concerning the sunset reviews], and
(v) preventing AD measures from "overreaching" [members shall refrain
from initiating anti-circumvention investigations where the initiation of a new
AD investigation would be a more appropriate approach].
Significantly, the improvements sought by China in both ADA and ASCM are issues
that the US had opposed during the rules negotiations on grounds that they
would impinge on their existing rules.
China, however, did not seek the elimination of the "zeroing"
methodology which has given rise to the maximum number of trade disputes at the
WTO till now.
Although a large majority of developing and industrialized countries demanded
the elimination of the zeroing methodology during the Rules negotiations, the
US remained the only member to press for its continuation. Consequently, the
issue remains unaddressed.
[The zeroing methodology that the Appellate Body has repeatedly ruled against,
involves an investigating authority taking account of all imports below normal
value, but ignoring those equal to or above the export value (which is treated
as zero for calculating the dumping margins). It is akin, in any judicial
proceedings, if the court routinely takes account only the evidence against a
suspect, ignoring all contrary evidence. SUNS]
Nonetheless, China also proposed that "certain provisions be transplanted
from ADA to ASCM, such as those relating to due process, transparency, and the
annex II on best information available."
China's proposal on trade remedies also covers somewhat controversially
"special consideration and treatment of SMEs [small and medium-sized
enterprises]" in the Rules negotiations.
It maintained that despite provisions concerning assistance for small companies
in ADA Article 6.13 and ASCM Article 12.11, members must add an independent
article "Small and Medium-sized Enterprises" with several elements.
China argued that assistance to SMEs may include the following elements:
a. The authorities shall take due account of difficulties of SMEs in getting
access to information and take appropriate measures to ensure easier access to
relevant information including initiation, questionnaire, submission,
disclosure and notices etc.
b. The authorities shall give full consideration to comments and opinions of
SMEs when making selection under Article 6.10. If SMEs have genuine
difficulties in providing full cooperation and present justifiable explanation,
the authorities may decide not to select them for limited examination.
c. If SMEs are unable to submit [replies to] questionnaires on time with good
cause, the authorities shall grant them reasonable extension upon request
unless such extension will significantly impede the investigation.
d. The authorities shall provide any assistance practicable to SMEs by
supplying information requested by the latter, including responding in a timely
manner to requests for clarification of questionnaires and permitting SMEs to
submit [replies to] questionnaires in less burdensome ways.
e. The authorities shall take due account of price undertakings offered by SMEs
f. Article 2 and Article 5 of Appendix II shall be strictly observed even when
information provided by SMEs may not be ideal in all respects, and this
situation shall not lead to a result which is less favourable to SMEs if they
provided cooperation to the best of their abilities.
In short, China's proposal on trade remedies could prove to be a major
challenge for the US to consider at a time when the Trump administration is
actually considering tightening provisions concerning trade remedies.
Further, it would make things difficult for countries seeking a standalone
agreement on fisheries subsidies without reforming the ambiguous provisions in
the current ADA and ASCM, trade envoys said. +