U.S. Antidumping and Countervailing Duty Laws Why

Transcript:U.S. Antidumping and Countervailing Duty Laws Why:
U.S. Antidumping and Countervailing Duty Laws Why Do the Unfair Trade Laws Exist? Antidumping (AD) Law – remedies unfairly priced imports that injure or threaten to injure an American industry. Countervailing Duty (CVD) Law - remedies subsidized imports that injure or threaten to injure an American industry. 2 Commerce vs. ITC Commerce determines whether and to what extent dumping or subsidization is occurring. ITC determines whether a U.S. industry competing with the allegedly dumped product has been materially injured, or threatened by such imports. Commerce and the ITC make their determinations independently 3 4 What is an Antidumping Duty? What is Dumping? “Dumping” occurs when a foreign producer sells its product at a lower price in the U.S. at less than normal value. Normal value may be prices in its home country, other third country markets, cost of production, or in cases involving non-market economy countries, factors of production. 5 Overview of the Dumping Margin Calculation 6 Fair Comparison In order to make a fair comparison, adjust the U.S. price and the price in the comparison market back to the point where both sales are ready to be shipped from the factory gate, i.e., the “ex-factory” price. 7 Fair Comparison Making a "fair comparison" between normal value and U.S. price 8 to Market Economy vs. Nonmarket Economy Comparisons U.S. anti-dumping law applies differently to countries considered to have nonmarket economies (NME) than to those with market economies (ME). In NMEs prices and costs are presumed to be under government control rather than subject to market-based principles and, therefore, cannot be relied upon. 9 NME – Factors to be considered The extent to which: the currency of the foreign country is convertible into the currency of other countries wage rates in the foreign country are determined by free bargaining between labor and management joint ventures or other investments by firms of other foreign countries are permitted in the foreign country 10 NME – Factors to be considered The extent of: government ownership or control of the means of production government control over the allocation of resources and over the price and output decisions of enterprises Such other factors as Commerce considers appropriate 11 Fair Comparisons - ME The dumping calculation is a comparison of the price at which subject merchandise is sold in the United States -- the U.S. price – with either the “normal value” of a sale of the