Empirical evidence on surrogate country method for non‐market economy: US anti‐dumping policy towards China

Published date01 August 2019
Date01 August 2019
wileyonlinelibrary.com/journal/twec World Econ. 2019;42:2452–2466.
© 2019 John Wiley & Sons Ltd
Received: 8 April 2018
Revised: 20 February 2019
Accepted: 10 April 2019
DOI: 10.1111/twec.12804
Empirical evidence on surrogate country method
for non‐market economy: US anti‐dumping policy
towards China
1Center for International Commerce and Strategy,Seoul National University, Seoul, Korea
2Graduate School of International Studies,Seoul National University, Seoul, Korea
anti-dumping, non‐market economy, surrogate country method
The method of dumping margin calculation differs depending on whether the exporting country is
considered market economy or non‐market economy (NME). The rationale for this distinction is that
the domestic prices are considered unreliable for determining the normal value of the goods in a
country where prices are distorted by state intervention. International rules as well as domestic laws
addressing dumping practices, therefore, permit alternative methodologies for calculation of normal
values in anti‐dumping (AD) investigations against exporters from NME countries.
Since there is no multilaterally agreed definition of NME, each country applies discretionally spe-
cial methods for calculating NME normal values. This situation was aggravated for China since it
agreed that the importing members might not always use a strict comparison with domestic prices or
costs in determining price comparability if WTO members find state intervention in pricing struc-
Importing countries are allowed to decline prices or costs originating from China and instead
use proxy values for conducting price comparison in AD investigations.
In recent years, the legal interpretation on expiration of China's NME status has raised huge con-
troversy not just in the WTO dispute settlement system2
but also in academia.3
The legal ambiguity
1Section 15, Accession Protocol of the People's Republic of China, WT/L/432 (23 November 2001).
2China brought complaints against the United States and European Union. See United States—Measures Related to Price
Comparison Methodologies (DS515) and European Union—Measures Related to Price Comparison Methodologies (DS516).
The panel for DS516 was composed in July 2017, WT/DS516/10 (11 July 2017).
3For interpretational issues on expiration of China's NME status in Section 15 of its WTO Accession Protocol, see, e.g.,
Nicely (2014), Tietje and Nowrot (2011) and Weijia (2013). In fact, there are many studies to argue that China is not
automatically granted market economy status, see Bown and Mavroidis (2013), Miranda (2014) and O'Connor (2011).

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT