The following article is a primer on the Chinese system of ant-dumping, anti-subsidy and safeguard law for Canadian companies exporting to China from Canada, or from operations in other countries. Although all WTO member countries (which includes China as of 2001) base their trade remedy systems on the relevant WTO Agreements, their procedures can vary in significant ways as far as business users are concerned. Traders should be aware of China’s trade remedies system as the country is becoming one of the largest importers in the world, with a significant domestic industry competing with imports in most markets. The following description relies on interviews, Chinese government written briefings (December 2006) and from the article entitled “Trade Remedy Law and Practice in China” by Professor Yongfu Gao.
China’s trade remedies system is based upon the Foreign Trade Law amended April 6, 2004, by the National People’s Congress (“NPC”), the legislature of the PRC and its highest organ of state power. The law provides the authority for regulations on anti-dumping, regulations on countervailing and the regulations on safeguard measures, promulgated November 2001 and amended following a decision of the State Council on March 31, 2004. There have been more than 20 distinct regulations under these three trade remedy topics.
The Ministry responsible for trade remedies is the Ministry of Commerce of the People’s Republic of China (“MOFCOM”).
MOFCOM has initiated over 40 anti-dumping cases in the last 10 years. There have been no subsidy cases and only one safeguard case (on certain steel products, which was terminated after one year). Price undertakings have been accepted in at least one case. Within MOFCOM, the Bureau of Fair Trade for Imports and Exports (“BOFT”) deals with the dumping calculations and the Investigative Bureau of Industry Injury (“IBII”) deals with the injury determination. Within a month of an IBII injury decision, the Tariff Office of the State Council usually accepts their recommendation to impose duties. The decision is then published on the MOFCOM website.
The Chinese procedures and substantive rules were amended to closely follow the WTO requirements. However, the administration and procedural legal principles of the system are more akin to the European administrative experience than North American or British principles. Also, the Chinese system is generally believed to take into account downstream and national interests and an issue in every investigation is whether the authorities should impose duties if they are not in China’s holistic trade interests.
Lang Michener has recently been involved in a joint project between CIDA, Centre for Trade Policy and Law, Chinese attorneys and China’s MOFCOM. The joint project was an exchange between Chinese and Canadian participants on the subject of trade remedies, involving a discussion of common experiences, learning points and opportunities for improvement in both systems.
China’s investigative authorities have been very receptive to perfecting their system in accordance the WTO trade remedy obligations, which requirements are agreed to and must be complied with by all WTO members. A business should seek advice on these requirements if it is faced with a trade remedy proceeding in China.