U.S. Trade Remedy Laws and Nonmarket Economies: A Legal Overview [April 23, 2012] [open pdf - 428KB]
"Two major U.S. trade remedies, each set out in Title VII of the Tariff Act of 1930, are antidumping (AD) law, which combats the sale of imported goods at less than their fair market value, and countervailing duty (CVD) law, which is aimed at offsetting foreign government subsidization of imported items. If dumped or subsidized imports are found to cause material injury, or threat, to a domestic industry, and the dumping margin or the net subsidy is not de minimis, antidumping or countervailing duties will be imposed. Both remedies are available when goods are imported from competitor countries that have free market policies. Since 1984, however, only AD law had been applied to goods from nonmarket or other 'transitional' economies. With the continued economic growth of some of these economies, such as China and Vietnam, pressure has increased on the U.S. government to utilize both domestic trade remedies more aggressively against unfair imports from these countries. This report discusses the application of antidumping and countervailing duty law to the goods of nonmarket economy (NME) countries, including the decision of the Department of Commerce (DOC) in 2007 to change its long-standing policy and apply CVD law to such goods; reviews China's successful case in the World Trade Organization (WTO) challenging the U.S. application of CVDs to Chinese products; examines the December 2011 decision of the U.S. Court of Appeals for the Federal Circuit in 'GPX Int'l Tire Corp. v. United States' holding that the U.S. CVD law does not authorize DOC to apply CVDs to NME country goods; summarizes the subsequently enacted P.L. 112-99, signed March 13, 2012, a statute authorizing DOC to apply CVDs to such products; discusses recent developments in the GPX litigation; and identifies earlier proposals to expressly include goods from NME countries within the scope of the U.S. countervailing duty statute."
CRS Report for Congress, RL33976