1 / 18

Shrimp and Diamond Tip Saw Blades from China

Shrimp and Diamond Tip Saw Blades from China. DS422 Matt Carew, Stacy Bromley Cheetham, & Nick Cunningham. What’s at Issue. Subsidizing Exports/Dumping Anti-Dumping Measures Zeroing In. History of the World: Part Shrimp. 27 Jan. 2004 – DOC Initiates Anti-Dumping Investigation

paley
Download Presentation

Shrimp and Diamond Tip Saw Blades from China

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Shrimp and Diamond Tip Saw Blades from China DS422 Matt Carew, Stacy Bromley Cheetham, & Nick Cunningham

  2. What’s at Issue • Subsidizing Exports/Dumping • Anti-Dumping Measures • Zeroing In

  3. History of the World:Part Shrimp • 27 Jan. 2004 – DOC Initiates Anti-Dumping Investigation • 8 Dec. 2004 – DOC Issues Final Determination of Injury • 26 Jan. 2005 – Effective date of Anti-Dumping Duty Order

  4. History of the World:Part Saw Blades • 21 June 2005 – DOC Initiates Anti-Dumping Investigation • 22 May 2006 – DOC Publishes Final Determination of Injury • 23 Jan 2009 – Effective Date of Anti-Dumping Duty Order

  5. History of the World:Part DSU

  6. At Issue #1: Subsidizing Exports: Dumping • In order to penetrate foreign markets, companies may sometimes lower their prices below their domestic prices • This is done to drive domestic firms out of business and can allow the foreign company to raise prices in the future • Governments step in to counter this perceived unfair advantage to protect domestic business

  7. At Issue #2: Anti-dumping Measures • Most countries have some kind of anti-dumping mechanism • This involves calculating the price difference of the good between its home market and the import market • Then, this amount is applied to the imported good in the form of a tariff • In the United States, this tariff often exceeds 100%

  8. At Issue #3: The US Approach: “Zeroing In” • In the US, anti-dumping regulations apply to specific foreign firms • If one foreign firm is found to be dumping, then all other foreign firms in this industry will be investigated • Most countries calculate the level of dumping by taking the average price of a good in the foreign market and comparing that to the average price of the good in the import market • However, the US treats import price observations above the 'normal' value as if they occurred at the 'normal' value (rather than at their observed level) • A simple example can demonstrate the difference

  9. Understanding “Zeroing In” Case B: Zeroing Normal Value: $2 U.S. sales observations: One unit each at $1, $2 and $3 Average U.S. price: $2 [$2 = ($1 + $2 + $3)/3] Margin of Dumping: Zero (because the average U.S. price equals the normal value.) Normal Value: $2 U.S. sales observations: One unit each at $1, $2 and $3 Average U.S. price with zeroing: $1.66 [$1.66 = ($1 + $2 + $2)/3] (The third U.S. sales price observation, at $3, is adjusted to the normal value of $2, since the U.S. sales price observation exceeds the normal value.) Margin of Dumping: 16.6 % [16.6 % = ($1 of dumping/$6 of imports)] Overall effect is a more restrictive import policy with higher anti-dumping tariffs Case A: No Zeroing

  10. China v. US: Shrimp and Diamond Sawblades • In 2011, China filed two separate requests for consultations, complaining that the US’ zeroing in practice to determine anti-dumping duties on shrimp and diamond saw blades were inconsistent with WTO obligations • China argued that zeroing in resulted in inflated dumping margins for Chinese firms exporting these goods to the US • China alleges a violation of Article VI of GATT 1994, which deals with anti-dumping • Specific complaints include principles, determination of dumping, imposition and collection of duties, and duration of duties

  11. US Position on the Issues • The US practice of zeroing in has been under pressure in other WTO cases • As a result, the US had already begun to issue a proposal to end the practice of zeroing in • However, the US was unhappy with China’s decision to formally bring complaints now, when they had already begun to end the process

  12. Decisions, Decisions, and More Decisions • As the US was not disputing China’s claims, this left the Panel in a rare but not unique position • 4 previous Panels dealt with the same situation • In all 5 Panels, the members still undertook to examine all the facts of the case • “Pursuant to Article 19.1 of the DSU, having found that the United States has acted inconsistently with Article 2.4.2 of the Anti-Dumping Agreement as set out above, we recommend that the United States bring its measures into conformity with its obligations under this Agreement.”

  13. Implementation • 7/23/12: DSB adopts panel report • 7/27/12: China and the United States inform the DSB of agreement that the reasonable period of time for the U.S. implementation of the DSB recommendations and rulings shall be 8 months • 3/23/13: Expiration of the "reasonable period of time" for the U.S.

  14. News Reports & Headlines • China.org.cn: WTO backs China on shrimp anti-dumping case (6/9/12) • chinadaily.com.cn: WTO backs China over shrimp dispute with US (7/24/12) • news.xinhuanet.com:WTO backs China's complaint against U.S. anti-dumping measures on shrimp, diamond saw blades(6/9/12) • thefishsite.com: WTO Backs China in US Anti-Dumping Disagreement (7/25/12)

  15. Observations • The United States did not contest China's assertions nor their request that the United States cease the practice • Was the zeroing one of their ways of battling the predatory practice of dumping (until they got caught) • easier to admit wrongdoing than to fight it • If you look for news reports on this case, there are literally a slew of them in China, and you will find hardly any from the U.S. • Interesting that what is a blip on the U.S. radar is seen as a major victory in China

  16. Interests Involved Foreign U.S. National Trade Associations are definitely affected by this ruling as their members would be directly impacted by dumping of product in the U.S. at lower cost U.S. companies in the shrimp and diamond saw blade markets Foreign countries looking to get into the frozen warm water shrimp export industry and/or the diamond saw blade exporting industry Third parties involved included the European Union; Honduras; Japan; Republic of Korea; Thailand; Viet Nam Domestic

  17. Questions?

  18. Sources • United States Trade Representative 2011. “USTR Statement Regarding China's Decision to Request WTO Consultations on Shrimp Antidumping Measures”. • Uruguay Round Agreement 1994. “Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994”. • Nye, William 2008. “Competitive Advocacy Opportunity: Zeroing in U.S. Antidumping Enforcement”. • www.sodahead.com • World Trade Organization, Documents related to case DS422.

More Related