The New Anti-Dumping Methodology Proposal in a Comparative Perspective: How to Make it Effective

Tasks

On 9 November 2016 the EU Commission published proposal COM(2016)721, aimed at introducing a new methodology for protection against dumped imports from non-EU countries. It was adopted in the context of the expiry of Article 15(a)(ii) of China's Protocol of Accession to the WTO of 2001 on 11 December 2016, after which WTO members are no longer allowed to treat China as a non-market economy and calculate their duties on the basis of the ‘analogue-country method’. The Commission's proposal does not address China specifically, but simply abolishes the distinction between market and non-market economies for all countries. Instead, a new methodology is introduced to calculate the duties on a case by case basis, taking into account general reports by the Commission, which will contain criteria to define ‘significant distortions’ in the market. These reports will serve as a basis for the decision over which anti-dumping methodology is to be used: the standard one for WTO countries with a market economy, or the proposed new methodology.

The Commission proposal leaves several questions open. There are issues relating to the exact form and content of the reports to be drafted by the Commission, and the criteria used to define significant distortions justifying the use of the new methodology. As the expiry of article 15(a)(ii) of China's Protocol of Accession to the WTO also affects other WTO Members, it is relevant to see how the biggest trading partners of the EU, and particularly the USA and Canada, react to its expiry, and how their methods compare to the Commission proposal.

This study, conducted on behalf of the European Parliament, aims to answer the following questions:

• What are the main features of the new calculation methodology and which elements should be used in the construction of the normal value?
• To what extent will prices and costs based on surrogate data be necessary ?
• What should be featured in the country reports to facilitate decisions over the methodology to be used ?
• How specific should these reports be? Should they feature, for example, descriptions of general country market conditions, particular regions or sectors, or even specific industries?
• What kind of criteria could or should be used for assessing a ‘significant
  distortion’?
• How does the Commission proposal compare to existing anti-dumping
  legislation and practices in Canada and the United States?

Methods

Comparative Analysis.