In early March, U.S. Representatives Artur Davis (D-AL) and Phil English (R-PA) introduced trade legislation that would expand the ability of U.S. domestic industries to obtain relief from unfair trade. The Nonmarket Economy Trade Remedy Act of 2007 (H.R. 1229) would require application of countervailing duty law to both market and nonmarket economies, including China.

Currently, while the United States has imposed antidumping duties on imports from nonmarket economy (NME) countries, it has not applied the countervailing duty law against these imports because the market itself is subsidized in an NME. H.R. 1229 is designed to reverse this administrative decision and to require the administration to allow countervailing duty cases against NMEs, especially Chinese imports. Specifically, H.R. 1229 would amend Title VII of the Tariff Act of 1930 to require DOC to accept countervailing duty petitions against NMEs.

Another important point of H.R. 1229 would be to create a new mechanism in which congressional approval would be required to implement a decision by DOC to “graduate” a country to market economy status. Finally, H.R. 1229 would require the International Trade Commission (ITC) to conduct an annual study of Chinese government intervention to promote investment, employment and exports.

This legislation may not be necessary as DOC is now conducting its first countervailing duty investigation on coated free sheet paper from the People’s Republic of China.