Trade Remedy Legislation: Applying Countervailing Action to Nonmarket Economy Countries [December 6, 2007]   [open pdf - 161KB]

"Concern regarding the mounting U.S. trade deficit with China (which is designated a nonmarket economy country according to U.S. trade laws), combined with China's refusal to allow its exchange rate to float, has led some in Congress to introduce legislation proposing to make countervailing duty laws applicable to China and other nonmarket economy countries. This legislation seeks to provide for the assessment of additional duties on imports whose production and/or importation are found to be subsidized by a public entity in their country of origin and are injurious to a U.S. producer of similar merchandise. Antidumping, another kind of trade remedy action, addresses products sold in the United States at less than their fair value (as defined by law) in a similar manner. […] In a countervailing investigation on coated free sheet paper (CFS), the ITA [International Trade Administration] reversed its position with regard to China, and on October 18, 2007 made a final affirmative determination of subsidies, finding that Chinese producers/exporters received net countervailable subsidies ranging from 7.40 to 44.25 percent. The investigation continues at the International Trade Commission, where a final injury determination is expected in mid-January. Legislation seeking to apply countervailing action to NME [nonmarket economy] countries has been introduced in the 110th Congress. This legislation includes S. 364 (Rockefeller); H.R. 571 (Tancredo), H.R. 708 (English); H.R. 782 (Ryan/Hunter) H.R. 2942 (Ryan/Hunter) and related bill S. 796 (Bunning/Stabenow); H.R. 1229 (Davis/English) and related bills S. 974 (Collins/Bayh) and S. 1919 (Baucus, introduced August 1, 2007). The Bush Administration has also taken some recent steps to address the issue."

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CRS Report for Congress, RL33550
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