Trade Remedies and Non-Market Economies : Economic Implications of the First US Countervailing Duty Case on China

In 2007, the United States Department of Commerce altered a 23-year old policy of not applying the countervailing duty law to non-market economies, and initiated eight countervailing and antidumping duty investigations on Chinese imports. The change brings heated debate on trade remedy policies and issues of non-market economies. This study focuses on the first countervailing duty case on imported coated free sheet paper from China and analyzes the implications of this test case for United States-China bilateral trade, and industrial policies in transitioning market economies. The paper also provides a brief review of the economics of subsidies, World Trade Organization rules on subsides and countervailing measures, and United States countervailing duty laws applied to non-market economies. While recently acceded countries should review their domestic development policies from the perspective of economic efficiency and comply with the World Trade Organization rules, it is also important to further clarify the issues of non-market economies under the multilateral trading system, and pay keen attention to the rules negotiations in the current World Trade Organization Doha Development Round.

Bibliographic Details

Main Authors:	Zhao, Longyue, Wang, Yan
Language:	English
Published:	Washington, DC: World Bank 2008-03
Subjects:	ACTIONABLE SUBSIDIES, AD VALOREM, ADVERSE EFFECTS, ADVERSE IMPACT, ADVERSE TRADE EFFECTS, AFFIRMATIVE INJURY DETERMINATION, AGREEMENT ON SUBSIDIES, AGRICULTURE, ANTI-DUMPING ACTIONS, ANTIDUMPING DUTY, ANTIDUMPING LAWS, ANTIDUMPING MEASURES, APPELLATE BODY, APPELLATE BODY REPORT, BANK LENDING, BANK LOANS, BANKRUPTCY, BARRIER, BARTER, BENCHMARK, BENCHMARKING, BENCHMARKS, BILATERAL TRADE, CAPACITY BUILDING, CENTRAL PLANNING, CENTRALLY PLANNED ECONOMIES, CENTRALLY PLANNED ECONOMY, COMMERCE, COMMERCIAL BANK, COMMERCIAL BANKS, COMPARATIVE ADVANTAGE, COMPLAINING COUNTRY, CONSUMER SURPLUS, CONSUMERS, CONTRACTING PARTIES, COUNTERVAILING DUTIES, COUNTERVAILING DUTY INVESTIGATION, COUNTERVAILING MEASURES, CURRENCY, CURRENCY EXCHANGE RATES, CUSTOMS, DARK AMBER SUBSIDIES, DEBT, DEBTS, DEPRECIATION OF ASSETS, DEVELOPING COUNTRIES, DEVELOPING COUNTRY, DEVELOPMENT POLICIES, DIRECT TRANSFER, DIRECT TRANSFERS, DISPUTE SETTLEMENT, DISPUTE SETTLEMENT BODY, DISPUTE SETTLEMENT MECHANISM, DISPUTE SETTLEMENT PROCEDURES, DOMESTIC INDUSTRIES, DOMESTIC PRICES, DUMPED IMPORTS, DUMPING, ECONOMIC DEVELOPMENT, ECONOMIC EFFICIENCY, ECONOMIC IMPLICATIONS, ECONOMIC RELATIONS, ECONOMIC SYSTEMS, ENVIRONMENTAL IMPACT, EQUITY INFUSION, EUROPEAN UNION, EXCHANGE RATE, EXCHANGE RATE SYSTEM, EXCHANGE RATES, EXPANSION OF TRADE, EXPORT PRICE, EXPORT SUBSIDIES, EXPORT SUBSIDY, EXPORTING COUNTRIES, EXPORTING COUNTRY, EXPORTS, FACTORS OF PRODUCTION, FAIR, FAIR MARKET VALUE, FAIR TRADE, FAIR VALUE, FINANCIAL CONTRIBUTION, FOREIGN BANK, FOREIGN BANKS, FOREIGN COUNTRIES, FOREIGN COUNTRY, FOREIGN DIRECT INVESTMENT, FOREIGN GOVERNMENT, FOREIGN INVESTMENT, FOREIGN PURCHASERS, FOREIGN TRADE, FREE TRADE, GDP, GLOBAL EXPORT, GOVERNANCE INDICATORS, GOVERNMENT INTERVENTION, GOVERNMENT INVOLVEMENT, GOVERNMENT SUBSIDIES, GRANTING AUTHORITY, HOME MARKET, HUMAN CAPITAL, IMPORT SUBSTITUTION, IMPORT SUBSTITUTION SUBSIDIES, IMPORTED GOODS, IMPORTING COUNTRIES, IMPORTING COUNTRY, INCOME, INCOME GROUP, INCOME LEVELS, INCOME TAX, INDUSTRIAL COUNTRIES, INEFFICIENCY, INFLATION, INPUT PRICES, INSURANCE, INTEREST RATE, INTEREST RATES, INTERNAL MARKET, INTERNATIONAL ACCOUNTING STANDARDS, INTERNATIONAL BANK, INTERNATIONAL LAW, INTERNATIONAL TRADE, INVESTIGATING AUTHORITIES, ITC, JOINT VENTURES, JUDICIAL REVIEW, JURISDICTION, LIBERALIZATION, LOCAL BANK, MARKET DISTORTIONS, MARKET ECONOMIES, MARKET ECONOMY, MARKET ECONOMY COUNTRIES, MARKET FAILURES, MARKET FORCES, MARKET ORIENTATION, MARKET PRICES, MARKET REFORMS, MARKET RISK, MARKET SHARE, MARKET VALUE, MATERIAL INJURY, MERCHANDISE, MIDDLE INCOME COUNTRIES, MIDDLE INCOME COUNTRY, MONOPOLIES, MONOPOLY, NATIONAL ECONOMY, NATIONAL INCOME, NON- MARKET ECONOMY, NON-ACTIONABLE SUBSIDIES, NON-MARKET ECONOMY, OUTPUT, POLICY RESEARCH, POLITICAL CONSIDERATIONS, POLITICAL REASONS, POLITICAL STABILITY, PREFERENTIAL LOAN, PRELIMINARY DETERMINATION, PRICE COMPARABILITY, PRICE CONTROLS, PRICE SUBSIDIES, PRICE SUPPORT, PRICE TAKERS, PRODUCTION COSTS, PROHIBITED SUBSIDIES, PROHIBITED SUBSIDY, PROPERTY LAWS, PUBLIC POLICIES, QUANTITATIVE RESTRICTIONS, RAPID GROWTH, REBATE, REBATES, REGIONAL DEVELOPMENT, RURAL INFRASTRUCTURE, SALE, SALES, SAVINGS, SETTLEMENT PROCEDURES, SOCIAL STABILITY, SOCIAL WELFARE, STATE ENTERPRISES, SUBSIDIZATION, SUBSTITUTION, SUPPLY CURVE, SURROGATE MARKET, TAX, TAX BREAKS, TAX CREDITS, TAX LIABILITY, TAX RATE, TAX RATES, TAX TREATMENT, TERMINATION OF PROCEEDINGS, THIRD MARKET, TRADE AGREEMENTS, TRADE BARRIERS, TRADE DISPUTES, TRADE POLICIES, TRADE POLICY, TRADE RELATIONS, TRADE REMEDIES, TRADE REMEDY LAWS, TRADING SYSTEM, TRANSFER OF FUNDS, TRANSITION COUNTRIES, TRANSITION ECONOMIES, TRANSITION ECONOMY, TREASURY, URUGUAY ROUND, WAGE RATES, WORLD ECONOMY, WORLD MARKET, WORLD TRADE, WORLD TRADE ORGANIZATION, WORLD TRADING SYSTEM, WTO,
Online Access:	http://documents.worldbank.org/curated/en/2008/03/13896462/trade-remedies-non-market-economies-economic-implications-first-countervailing-duty-case-china https://hdl.handle.net/10986/6319
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