China–GOES (Article 21.5): Time to Clarify the Standard for Price Suppression and Price Depression in AD/CVD Investigations

Abstract

This dispute concerns the measures China took to implement the Dispute Settlement Body's rulings inChina–GOES, which had found a number of violations with respect to China's antidumping and countervailing duties imposed on grain oriented flat-rolled electrical steel (GOES) imported from the United States. In this compliance proceeding, the United States claimed that the Redetermination issued by China's Ministry of Commerce (MOFCOM) continued to violate WTO law. At the center of the dispute were MOFCOM's findings that the US imports had the effect of suppressing and/or depressing the prices of domestic like products. While the Panel reached the conclusion that the MOFCOM findings were inconsistent with WTO rules, it did not clarify the criteria for determining such price effects. In this comment, we call for the adoption of a clearer and more objective standard for determining price suppression and price depression in antidumping and countervailing duty investigations, via the tools of economic modeling.

China–Cellulose Pulp: China's Quest to Satisfy WTO Panels and the Appellate Body

“…In their analysis of the China–GOES dispute, Qin and Vandenbussche (2017) argue that to conclude that dumped imports caused price suppression or depression, investigators should be required to undertake a counterfactual analysis in which they statistically analyse the change in the prices that occurred from the price that otherwise would have occurred absent the dumped imports. For example, the authors explain the benefits of using regression analysis, which statistically estimates how much the change in the explanatory variable (subject import prices) impacted the change in the dependent variable (Chinese prices) over the POI, while controlling for other potential explanatory variables like Chinese production capacity or cotton prices.…”

“…The European Union and the United States, for example, more commonly use trend analysis, which compares domestic prices, subject and non-subject import prices, the value of subject and non-subject imports, and lost sales or revenue by the domestic industry over time. Typically, the sample period in this analysis includes up to three years of data prior to the launch of the anti-dumping investigation (Qin and Vandenbussche, 2017: 215). The investigators can then compare trends prior to the alleged dumping to those during the alleged dumping.…”