Earlier this year, the U.S. Department of Commerce (Commerce) invited the public to provide comments regarding China’s economy and ongoing reforms as part of an inquiry into whether China operates a market economy. In May, the Southern Shrimp Alliance, along with dozens of U.S. manufacturers and labor unions, submitted extensive analysis and evidence demonstrating that the government of China continued to control large portions of the economy of the country through various devices. In the absence of an economy that operates on market principles, Commerce’s antidumping analysis appropriately precludes the use of prices and costs from that country to assess whether imports have been sold into the United States at fair value.
On Friday, Commerce announced that the agency had completed its review and “concludes that [China] is a [non-market economy] country because it does not operate sufficiently on market principles to permit the use of prices and costs in that country for purposes of [Commerce’s] antidumping analysis.” Today, Commerce issued a 205-page memorandum explaining the basis for its determination.
The government of China, along with importers with interests in Chinese merchandise, has argued that the United States is prohibited from finding that the country operates a non-market economy because of World Trade Organization agreements. The government of China has insisted that the United States must utilize internal Chinese prices and costs to evaluate whether Chinese-origin goods have been dumped into the U.S. market. Because Commerce has now, again, confirmed that China operates a non-market economy, the utilization of internal Chinese prices and costs would result in an international trading system governed by heavy government intervention.
“This Administration has appropriately called out the Chinese government for its continued manipulation of their internal markets,” said John Williams, the executive director of the Southern Shrimp Alliance. “We understand that China will now go to the World Trade Organization to try and force our government to call something a dolphin when it walks, swims, and quacks like a duck. A duck is a duck and no vague international agreement can change that.”
Read the Southern Shrimp Alliance’s comments on China’s status as a non-market economy filed on May 10, 2017 here: http://www.shrimpalliance.com/wp-content/uploads/2017/10/SSA-China-NME-Status-Comments-Narrative-Version-As-Filed.pdf
Read the U.S. Department of Commerce’s October 26, 2017 memorandum, “China’s Status as a Non-Market Economy,” here: http://www.shrimpalliance.com/wp-content/uploads/2017/10/China-NME-Memo-Aluminum-Foil.pdf