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Sri Lanka Jounral of International Law - Article On China
Sri Lanka Jounral of International Law - Article On China
Sri Lanka Jounral of International Law - Article On China
ISSN 1391-5568
The Sri Lanka Journal of International Law is a refereed Journal published annually by the
Faculty of Law, University of Colombo, Sri Lanka. Publication in this Journal is valid for
purposes of academic accreditation. The Journal is listed in the periodical indexes of Ulrich
and Lex Opus.
All correspondence and requests for subscription information should be addressed to the
Editor in Chief, Sri Lanka Journal of International Law, Faculty of Law, University of
Colombo, Sri Lanka. Manuscripts may be submitted and cannot be returned unless sufficient
postage is included. Articles also may be emailed with the attachment in Microsoft Word
format to nisharasdocs@gmail.com and noeldias31@gmail.com.
Views expressed in articles published in the Journal are those of the individual authors and
are not to be attributed to the Journal, its Editorial Board, Advisory Board or to the University
of Colombo.
EDITORIAL BOARD
Editor-in-Chief : W. Seneviratne
Chandrika N Wijeyaratne
Vice-Chancellor, University of Colombo, Sri Lanka
G.L. Peiris
Professor Emeritus, University of Colombo, Sri Lanka
Savitri Goonesekere
Professor Emeritus, University of Colombo, Sri Lanka
Sharya Scharenguievel
Professor Emeritus, University of Colombo, Sri Lanka
Lakshman Marasinghe
Professor Emeritus, Faculty of Law, University of Windsor, Canada
Anton Cooray
Former Dean of the Faculty of Law, University of Colombo
N. Selvakkumaran
Former Dean Faculty of Law, University of Colombo
Indira Nanayakkara
Dean, Faculty of Law, University of Colombo, Sri Lanka
Saleem Marsoof
Former Justice, Supreme Court of Sri Lanka
M.C.W. Pinto
Former Secretary General, U.S.- Iran Tribunal, The Hague
Tony Anghie
Samuel D. Thurman Professor of Law, College of Law, University of Utah
Nirmala Chandrahasan
Consultant, National Peace Council of Sri Lanka
K. Kanag-Isvaran
President Counsel, Barrister of Lincolns Inn
A. Rohan Perera
Permanent Representative of Sri Lanka to the United Nations
Volume 27
EDITORIAL
The most significant event in Sri Lanka during the latter part of 2019, since the
release of the last volume of the Sri Lanka Journal of International Law (Volume
26, 2018), was the Presidential Elections held in November 2019. President
Gotabhaya Rajapaksa won a decisive victory in these elections.
By the dawn of 2020, the initial news of a new virus in Wuhan, China, was being
noted by the World Health Organization. By Mid-March 2020, the Sri Lankan
authorities under the leadership of President Gotabhaya Rajapaksa took firm
measures including the closure of airports, ports, schools and workplaces, in order
the face the world-wide COVID-19 pandemic. Several months later, the country
has managed to control the pandemic spread with only a few clusters in the
community and only 3,140 cases (many of them Sri Lankan returning from
abroad) and limited the human losses to only 12 deaths. In August 2020, the
General Election, which was postponed due to the pandemic, was conducted,
resulting in a landslide victory for the newly created Sri Lanka Podujana
Peramuna (SLPP) party led by the former President Mahinda Rajapakse, who was
then sworn in as the new Prime Minister.
The new government of Sri Lanka and its allied parties have a 2/3 majority in
Parliament and have declared their intentions to introduce constitutional
amendments and the possibility of a new constitution, as well several new
legislative enactments. The new regime is also facing a challenging task of
developing the country in the context of the unprecedented commercial and
operational pressures placed by the pandemic on an array of business sectors in
the Sri Lankan economy. Adaptability and innovation within all sectors is being
demanded, to face these challenges.
The present volume carries a wide range of topics from international and
comparative law. There are two articles focuses primarily on public international
law: Chua’s “Incomplete Decolonization without Self-Determination: The Case
of The Separation of The Chagos Archipelago” and Vishnoi’s, “Is the Bird Out
of Cage: Demystifying China’s Non-Market Economy Status?”.
The other articles deal with international standards and the domestic
implementation thereof: Kumarage’s , “The Label, The Divide and The Cost: A
i
Comparative Analysis of Gender in Technology, Engineering and Mathematics
Education”; Ratnam’s, “A Necessity That Is Left as A Luxury: Legal Aid for
Criminal Defence in Sri Lanka”; Ogwezzy’s, “The Promotion and Protection of
Rights of Persons with Disability in Nigeria: An Analysis of The Applicable
Theories, Statute and Treaty Laws”; Gbobo’s “Gender Discriminatory Laws in
Nigeria’s Labor Sector: A Violation of International Labour Organization (ILO)
Standards”; and Ranasinghe’s “Good Intentions and Flawed Outcomes: The
Impact of International Actors on Sri Lanka’s Transitional Justice Process”.
Chua analyzes the 2019 advisory opinion of the International Court of Justice
concerning the Chagos Archipelago. This opinion concerned the consequences
under international law arising from the continued administration by the United
Kingdom of the Chagos Archipelago, which had been administered by the United
Kingdom as a dependency of the colony of Mauritius between 1814 and 1965, but
retained by the UK from the territory of Mauritius for the purpose of establishing
a military facility on the island of Diego Garcia. The issue before the court
included the inability of Mauritius to implement a programme for the resettlement
on the Chagos Archipelago of its nationals, in particular those of Chagossian
origin. It is the view of the author that it was a little regrettable that the ICJ did not
go further in its opinion but also that the ICJ’s opinion reinforces the notion of
continuing international obligation to complete the decolonization process even
decades after the end of colonialism.
China joined the WTO through the Accession Protocol signed in 2001. China’s
identification as a “non-market economy” State brought key benefits to China
under the Protocol with regard to calculating anti-dumping duties. China has
agreed that this benefit will expire on December 11, 2016. One of the key issues
is whether China can still be treated as a non-market economy. The article by
Vishnoi and Meena addresses the accession agreement language regarding China's
status as a non-market economy, the removal of that language, and the respective
arguments of Members in certain WTO proceedings regarding the significance of
the terms of China's accession. The paper further throws light on the treatment by
United States, European Union and India in anti-dumping investigations of
imported goods from China. Finally, the paper concludes by identifying a way
ahead.
In this volume there are three articles emphasizing on the experiences and
challenges faced by Sri Lanka and two articles focusing on Nigeria.
ii
Development, rights-based development approaches and international norms that
underlie equal access and opportunity. In the light of Sri Lanka’s gender gap in
TEM (and the gender digital divide), the paper highlights the importance of
legislative intervention and proactive state commitment in addressing this matter.
A decade since the cessation of Sri Lanka’s civil war, tensions still remain
between ethnic groups. Ranasinghe’s research examines how pressure from
international actors for the adoption of transitional justice mechanisms and the
establishment of accountability for war crimes affected the timing and sequencing
of transitional justice and reconciliation mechanisms in Sri Lanka, which have
largely been reactionary measures to deflect such pressure. It is noted that the top-
down processes, have been manipulated by international and local actors to suit
their own agendas, largely ignoring the needs of the victims of the conflict. The
author calls for an approach that is locally owned and participatory, taking into
consideration the context-specific needs of the victims, in order to transform the
relationships between ethnic groups from hostility to one of interdependence.
Nigeria has ratified different regional and international instruments that were
adopted to protect the rights of persons with disability and enacted the
Discrimination against Person with Disability (Prohibition) Act 2018. Ogwezzy
comprehensively analyzes the theories, statutes and treaty provisions to see how
it will serve the aim of promoting and protecting the rights of persons with
disability in Nigeria as people with disability needed the protection of government
to promote equal opportunities and social inclusion for all people.
N. Mendis
August 2020
iii
(2019) 27 Sri Lanka JIL 163
ABSTRACT
*
Apoorva Vishnoi, B.A., LL.B. (Hons.), Research Fellow, Centre for Trade and Investment
Law (CTIL), Ministry of Commerce and Industry, India.
Rishabha Meena, B.A., LL.B. (Hons.), Research Fellow, Centre for Trade and Investment
Law (CTIL), Ministry of Commerce and Industry, India.
4
Rights of Persons with Disability in Nigeria
under the World Trade Organization [“WTO”]. Dumping occurs when the
exporter introduces goods into the importing country market at a price which
is less than the normal value (i.e. price of the goods in the domestic market of
the exporting court) or its cost of production.1 For the determination of the
dumping, the goods must be sold during the ‘ordinary course of trade’.2 The
reason behind the premise of ‘ordinary course of trade’ under Article VI:1,
GATT and Article 2.1 of ADA is to enable the comparison of the two market
countries so as to determine the existence of fair or unfair competition between
the domestic goods and the imported goods. The comparability requires that
both countries are market economies.3 If sufficient quantities of product are
not sold in the domestic market of the exporting country or if the home market
sales take place among the related parties or affiliates or situations where the
market is not viable for comparison.4 To remedy such situations, the normal
value of the product is determined on the basis of the price of the product sold
to a third country by the exporting country or on the basis of the construction
of cost of the product through production cost along with selling general and
administrative cost.5 Consequently, if there exists dumping, the importing
country can impose anti-dumping measure.6
The usage of domestic price is generally not allowed when the records are not
reliable, which is the case for NMEs as the prices are determined by the State
rather than the market forces.7 Generally, the determination of normal value is
1
Wang, Jinayu, A Critique of the Application to China of the Non-market Economy
Legislation and Practice Rules of the of Antidumping European Union, 33(3) JOURNAL OF
WORLD TRADE 119, 117-145 (1999); Export price of the product is the price at which
products are sold for export from exporting country; Normal value is the price of the
product in the domestic market of the exporting country or for domestic consumption in
the exporting country.
2
Article 2.1, AGREEMENT ON IMPLEMENTATION OF ARTICLE VI OF THE GENERAL
AGREEMENT ON TARIFFS AND TRADE, 1994 (hereinafter Anti-Dumping Agreement);
Article VI:1, THE GENERAL AGREEMENT ON TARIFFS AND TRADE, 1994 (hereinafter
GATT).
3
Tietje, Christian and Karsten Nowrot, Myth or Reality? China’s Market Economy Status
under WTO Anti-Dumping Law after 2016, 34 POLICY PAPERS ON TRANSNATIONAL
ECONOMIC LAW, 3, (2011) (hereinafter Tietje and Nowrot).
4
Article 2.2.1, Anti-Dumping Agreement.
5
Article 2.2, Anti-dumping Agreement; Wolfrum, Rüdiger Peter-Tobias Stoll And Michael
Koebele, WTO – TRADE REMEDIES IN MAX PLANCK COMMENTARIES ON WORLD TRADE
LAW, Vol. 4, para.53, 6 (2008).
6
Hornyak, Joseph, Treatment of Dumped Imports from Non-Market
Economies 15(1) MARYLAND JOURNAL OF INTERNATIONAL LAW 28 (1991).
7
Lee, Jieun, China’s Nonmarket Economy Treatment and US Trade Remedy Actions 51(3)
5
based on the assumption that there exists a market economy condition.8
Adoption of such practices put China at a disadvantageous position because it
provides liberty to the investigating authority to use any surrogate country or
construct normal value, also called special methods, as per its own discretion
which ultimately puts the exporter at a disadvantageous postion because he
might impose anti-dumping duty which is more than the actual amount of
dumping.9 In other words, the discretion with the expoter in cases of special
methodologies does not show the true picture of dumping.
Consequently, in order to tackle the situation of domestic price, there was the
insertion of Ad Note to Article VI, GATT so as to seek the legitimacy of
different types of economic structure within the framework of GATT and
thereby preventing the discrimination in the imposition of the anti-dumping
duty. The Ad Note recognizes that in cases of import from country holding a
substantial monopoly, the requirement of strict comparison with the domestic
price is not required.10 Further, the Second Ad Note to Article VI only
recognizes the concept of NME but it does not define it. Neither the General
Agreement on Tariffs and Trade, 1994 (“GATT”) nor the WTO covered
Agreement defines a non-market economy (“NME”). Thus, the Member came
up with their own notion of the definition of the NME in their domestic
legislation. Over time, the GATT Contracting Parties and later the WTO
Members rendered their own versions of a definition of NME in their domestic
legislation or applicable domestic law. By implication, NME is defined as a
system where the State plays a central role in economic activities through
fixation and control of economic factors.11
The definition of NME differs across the jurisdiction. For instance, the United
State takes into consideration number of factors such as currency
JOURNAL OF WORLD TRADE 495-516, 496 (2017 (hereinafter Jieun Lee); Andre J.
Washington, Not So Fast, China: Non-Market Economy Status Is Not Necessary for the
Surrogate Country Method, 19 CHICAGO JOURNAL OF INTERNATIONAL LAW 260-294, 269
(2018) (hereinafter Andre J. Washington).
8
Lee, Jieun, supra at 495.
9
Review of E.U. Trade Defence Instruments in Brief: The Analogue Country Method in
Anti- Dumping Investigations, KOMMERSKOLLEGIUM, https://perma.cc/LE92-P2A3
cited in Andre J. Washington, 263; Wenhua Ji and Huang Cui, China’s Experience in
Dealing with WTO Dispute Settlement: A Chinese Perspective, 45(1) JOURNAL OF WORLD
TRADE 5 (2011).
10
Para.1, Interpretative Note Ad Article VI from Annex I, Anti-Dumping Agreement.
11
UNITED NATIONS CONFERENCE ON TRADE AND DEVELOPMENT, Glossary of Custom
Terms, available at http://www.asycuda.org/cuglossa.asp?term=market+economy (Last
visited on January 25, 2019).
6
Rights of Persons with Disability in Nigeria
But this would not have been sufficient to assuage Members since once a
country has joined the WTO, the discriminatory use of anti-dumping
methodologies could be a violation of the non-discrimination obligation. This
is perhaps the reason why the WTO Members specifically negotiated a
provision for continuing to treat China as an NME. NME is defined as “a
country which has a complete or substantially complete monopoly of its trade
and where all domestic prices are fixed by the State”.16
Ad Note to Article VI:1 provides that in cases where the exporting country has
a monopoly of its trade and the domestic prices are fixed by the State, the
12
§771 (18)(b), 19 U.S.C. § 1677, THE TARIFF ACT, 1930 (hereinafter THE TARIFF ACT,
1930).
13
Flynn, Michael, China: A Market Economy, 48 GEORGETOWN JOURNAL OF
INTERNATIONAL LAW 320 (2016).
14
Posner, Theodore R., A Comment on Interpreting Paragraph 15 of China’s Protocol of
Accession, 9(3) GLOBAL TRADE AND CUSTOMS JOURNAL 148 (2014).
15
WORKING PARTY ON THE ACCESSION OF CHINA, Report of the Working Party on the
Accession of China, WT/ACC/CHN/49, 46 (October 1, 2001).
16
Thorstensen, Vera, WTO – Market and Non-Market Economies: The hybrid case of China,
1 LATIN AMERICAN JOURNAL OF INTERNATIONAL TRADE LAW 765 (2013).
7
importing country may take recourse to other possible measures to determine
the normal value which does not necessarily involve strict comparison with
the domestic price. WTO accepts that, in the particular situation of economies
where the government has a complete or substantial monopoly on trade and
where all domestic prices are fixed by the state, a strict comparison with home
market prices may not be appropriate.17 Ad Note to Article VI requires that the
exporting member must demonstrate that the State creates a monopoly in trade
and fixes the price.18 Under the Article 15 of China’s Protocol of Accession,
it is a burden upon China’s exporter to prove existence of market economy as
per the domestic law of the importing country. Otherwise, the importing
country can use alternative methods to do so.19 If the Chinese exporters show
the existence of the market economy status, then the importing Member must
use Chinese price at normal value.20 Article 15(d) limits the application of
Article 15(a)(ii) only till December 11, 2016.21 The market economy status
deals with the eligibility of a country for the mandatory use of domestic costs
or prices for the determination of the normal value of the products in anti-
dumping investigations.22 Article 15(a) and Article 15(d) are exclusively
concerned with the determination of normal value.23 The Appellate Body in
EC – Fasteners, stated that as per Article 15(d), Article 15(a) will expire on
December 11, 2016, without differentiating between Article 15(a)(i) and
Article 15(a)(ii).24 In nutshell, Article 15(a) can be understood as follows:25
17
Snyder, Francis, The Origins of the ‘Nonmarket Economy’: Ideas, Pluralism and Power in
EC. Anti-Dumping Law about China, 7(4) EUROPEAN LAW JOURNAL 369 (2001).
18
Rao, W., China’s Market Economy Status Under WTO Anti-Dumping Law After 2016, 5
TSINGHUA CHINA LAW REVIEW 151, 151–168 (2013) (hereinafter W. Rao).
19
Article 15(a)(ii), Anti-Dumping Agreement; Appellate Body Report, European
Communities – Definitive Anti-Dumping Measures on Certain Iron or Steel Fasteners
from China, WT/DS397/AB/R, adopted 28 July 2011, DSR 2011: VII, p. 3995,
paras.287-288 (hereinafter ABR, EC – Fastners).
20
Article 15(a)(ii), Anti-Dumping Agreement.
21
Article 15(d), Anti-Dumping Agreement.
22
Rao, W., supra, at 153.
23
ABR, EC – Fasteners, para.289.
24
ABR, EC – Fasteners, para.289.
25
Nedumpara James J. and Archana Subramanian, China’s Long March to Market Economy
Status: Study of the Expiry of Section 15 of the Protocol of Accession and the Treatment
of China in Anti-Dumping Proceedings, (CENTRE FOR TRADE AND INVESTMENT LAW
DISCUSSION PAPER NO. 2, 2018), 14-15 (hereinafter James J. Nedumpara and Archana
Subramanian).
8
Rights of Persons with Disability in Nigeria
26
Rao, W.,161.
27
Article 15(d), PROTOCOL ON THE ACCESSION OF THE PEOPLE’S REPUBLIC OF CHINA,
WT/L/432 (2001 (hereinafter ACCESSION PROTOCOL).
28
Bhattacharya, Ritwik, Three Viewpoints on China’s Non-Market Economy Status, 9(2)
TRADE, LAW AND DEVELOPMENT 191 (2017 (hereinafter Ritwik Bhattacharya); Edwin
9
is based on the premise that in the earlier draft of China’s Protocol of
Accession, there were only two clauses without the presence of the chapeau.29
The chapeau was added on the request of the United States. In nutshell,
chapeau was inserted merely “reiterate the conditional options” lying with the
importing Member, rather than obligating it to use alternative
methodologies.30 Another reason for the same is that the existence of the
chapeau depend on the existence of the sub-provisions as it states that the
chapeau “shall apply based on” id est conditional upon.31 Thereby, the
chapeau cannot operate independently of Article 15(a)(ii).32 The use of
chapeau is based upon Article 15(a)(i) and Article 15(a)(ii).33 Any different
interpretation which imparts NME status to China would render Article 15(d)
fatuous.34
The problem with the above argument is that the insertion of the chapeau was
only to reiterate earlier provision.35 Another problem with the above argument
is that reliance on EC – Fasteners is flawed as the Appellate failed to
distinguish between the expiry of Article 15(a) and Article 15(a)(ii).36 It has
been concluded that it is impossible from WTO perspective to make the
Vermulst, Juhi Dion Sud, Simon J. Evenett, Normal Value in Anti-Dumping Proceedings
against China Post-2016: Are Some Animals Less Equal Than Others?, 11(5) GLOBAL
TRADE AND CUSTOMS JOURNAL 212 (2016 (hereinafter Edwin Vermulst, Juhi Dion Sud
and Simon J. Evenett).
29
Rao, W., supra, at 163.
30
Id, at 164.
31
Bhattacharya, Ritwik supra 191; Appellate Body Report, European Communities - Trade
Description of Sardines 242-245, WT/DS231/AB/R (adopted Oct. 23, 2002) Appellate
Body Report, European Communities - Measures Concerning Meat and Meat Products
163, WT/DS26/AB/R, WT/DS48/AB/R (adopted Feb. 13, 1998), Appellate Body Report,
India - Measures Concerning the Importation of Certain Agricultural Products 5.77,
WT/DS430/AB/R (adopted June 19, 2015).
32
Vermulst, Edwin, Juhi Dion Sud and Simon Evenett, supra note 29, 216; Yu, Minyou, Jian
Guan, The Non-Market Economy Methodology Shall Be Terminated After 2016, 12(1)
GLOBAL TRADE AND CUSTOMS JOURNAL 20-21 (2017).
33
Ibid
34
Vermulst, Edwin Juhi Dion Sud and Simon Evenett in EUROPEAN INSTITUTE FOR ASIAN
STUDIES, China: NME at the Gates, Article 15 of China’s WTO Accession Protocol: A
Multi-Perspective Analysis, 8 (2016) (hereinafter Vermulst et al).
35
Connor, B., The Myth of China and Market Economy Status in 2016, 4,
http://worldtradelaw.typepad.com/files/oconnorresponse.pdf (hereinafter B. Connor).
36
Miranda, Jorge, Interpreting Paragraph 15 of China’s Protocol of Accession, 9(4) GLOBAL
TRADE AND CUSTOMS JOURNAL 101 (2014).
10
Rights of Persons with Disability in Nigeria
determination of the normal value on the basis of methods other than the home
market price model.
They are careful to clarify that the expiration of 15(a)(ii) does not explicitly
grant China MES magically, but it essentially creates a situation where other
WTO members are no longer permitted" to use alternative methodologies.37
37
Tietje and Nowrot, supra at p7.
38
Jorge Miranda, More on why China after granting Market Economy Status after December
2016 is contingent upon Whether China has in fact transitioned into Market Economy,
11(5) GLOBAL TRADE AND CUSTOMS JOURNAL 249 (2016).
39
Ibid
40
Nedumpara, James J. and Weihuan Zhou, Non-Market Economies In The Global Trading
System: The Special Case Of China, 42 (2018).
41
Connor, B. at p2.
11
special methodologies.42 This view is further supported by the observation laid
down by the Appellate Body in EC – Fasteners where it stated that:
“If Chinese producers are not able to “clearly show” that market
economy conditions prevail in the industry in question, the importing
WTO Member may use an alternate methodology that is not based on a
strict comparison with domestic prices or costs in China, such as using
surrogate third country or constructed normal value”.43
The problem with the above proposition is that the argument that the first and
the third sentence of Article 15(d) impose the burden of proof on China is
invalid.44 The reason for the same is that Article 15(d), second sentence, which
enables the expiry of Article 15(a)(ii) applies in any case notwithstanding the
other sentences in Article 15(d).45 Further, Article 15 chapeau along with
Article 15(a)(i) is sufficient so as to enable the employment of methods other
than the home market method in cases not meeting the requirement of
‘ordinary course of trade’.46
On the basis of the standard rule of interpretation of the treaty, it is the terms
of the treaty which forms the basis of interpretation and the interpreter must
not attribute meaning to the terms.47
The standard rules of treaty interpretation provide that the terms of the treaty
should be interpreted according to its terms and the interpreter must avoid
attributing meaning to the terms. As per the principle of effectiveness, effet
utile, the effect should be given to all terms of the treaty.48 Therefore, by virtue
of these principles, Article 15(a)(i) must be given effect and thus special
methodologies are allowed.49
42
Id, at 3.
43
ABR, EC-Fasteners, 286.
44
Bhattacharya, supra at 194.
45
Ibid
46
Chapeau of Article 15(a), Accession Protocol; Ibid
47
Appellate Body Report, EC- Measures Concerning Meat and Meat Products (Hormones)
181, WT/DS26/AB/R (adopted Feb. 13, 1999); Appellate Body Report, India- Patent
Protection for Pharmaceutical and Agricultural Products 45, WT/DS50/AB/R (adopted
Jan. 16, 1998).
48
Appellate Body Report, Japan-Taxes on Alcoholic Beverages 12, WT/DS8/AB/R,
WT/DS10/AB/R, WT/DS11/AB/R (adopted Nov. 1, 1998).
49
Nedumpara James J., and Archana Subramanian, supra at 16.
12
Rights of Persons with Disability in Nigeria
Further, the reason why Article 15(a)(i) was included because the Members
wanted to ensure that China should not be automatically be given market
economy status merely because a certain date is passed.50
Article 15(d) is intermittent in passing the onus probandi on Chinese exporters
to prove that they exists under the market economy conditions as per the
domestic laws of the importing country.51
50
Bulloch, David, China Doesn't Deserve Its 'Market Economy' Status By WTO, FORBES,
available at https://www.forbes.com/sites/douglasbulloch/2016/12/12/china-doesnt-
deserve-its-market-economy- status-by-wto/#555a0622b937 (2016) (Last accessed on
January 31, 2019).
51
Vermulst et al at 6.
52
See THE TARIFF ACT, 1930.
53
19 U.S. Code § 1677 (18)(A) (2006)
54
§ 771(18)(C)(1), THE TARIFF ACT.
55
§ 733(a), THE TARIFF ACT.
13
countries are permitted in the foreign country (d) the extent of
government ownership or control of the means of production; (e) the
extent of government control over the allocation of resources and
over the price and output decisions of enterprises; and (f) such other
factors as the administering authority [i.e. Department of
Commerce] considers appropriate”.56
Despite the existence of such rigid classification, the USDOC has
discretionary power to apply these principles on the case- to-case basis,57 as
they are empowered to do it under last essential criteria for the determination
of NME as mentioned above. Later, the USDOC came up with three criterias
for the market economy which are: “(a) virtually no government involvement
in setting prices or amounts to be produced, (b) typically private or collective
ownership of firms in the industry, and (c) market-determined prices for all
significant inputs”.58
For instance, in March 2017, the USDOC initiated an investigation against the
dumping of aluminum foil imported from China it. While doing so, the
USDOC determined the status of China. It was held that China is an NME on
the ground that “state’s role in the economy and its relationship with markets
and the private sector results in fundamental distortions in China’s
economy”.59 In none of the anti-dumping investigation launched against
China by the United States after the expiry of Article 15(a)(ii), the exporter
did not argue about the expiry of Article 15(a)(ii).60 Further, United States
passed Trade Preferences Extensions Act, 2015 which allows the investigating
authority to reject home market sales in cases falling beyond the purview of
the ‘ordinary course of trade’ i.e. “situations in which the administering
authority determines that the proper market comparison prevents a proper
comparison with the export price or constructed export price”.61
56
19 U.S. Code § 1677 (18)(B) (2006), THE TARIFF ACT.
57
Lee, Jieun, supra note 8, at 495.
58
Chrome-Plated Lug Nuts from the People’s Republic of China, 57 FEDERAL REGISTER
15,052 (24 Apr. 1992).
59
MEMORANDUM FROM LEAH WILS-OWENS, OFFICE OF POLICY, ENFORCEMENT AND
COMPLIANCE TO GARY TAVERMAN, ASSOCIATE DEPUTY ASSISTANT SECRETARY FOR
ANTIDUMPING AND COUNTERVAILING DUTY OPERATIONS, China’s Status as a Non-
Market Economy, (Oct. 26, 2017), https://enforcement.trade.gov/download/prc-nme-
status/prc-nme-review-final-103017.pdf.
60
Nedumpara James J and Archana Subramanian, supra at 32.
61
TRADE PREFERENCES EXTENSION ACT, 2015, Pub. L. 114–27, §504, 129 Stat. 362-419,
(2015).
14
Rights of Persons with Disability in Nigeria
62
COUNCIL REGULATION 384/96 ON PROTECTION AGAINST DUMPED IMPORTS FROM
COUNTRIES NOT MEMBERS OF THE EUROPEAN COMMUNITY, 1996 OJ (L056) 1-20.
63
THE 33RD ANNUAL REPORT FROM THE COMMISSION TO THE COUNCIL AND THE EUROPEAN
PARLIAMENT ON THE EU’S ANTI-DUMPING, ANTI-SUBSIDY AND SAFEGUARD ACTIVITIES
(2014), Commission Staff Working Document, 39 (2015), available at
http://trade.ec.europa.eu/doclib/docs/2015/august/tradoc_153702.pdf.
64
Id, 5.
15
5. the existence of a genuine financial sector which operates
independently from the state and which in law and practice is subject
to sufficient guarantee provisions and adequate supervision”.65
There is a huge difference between the criteria adopted by the European
Commission and the United States. The European Union system does not put
such discretionary power as enjoyed by the USDOC on the investigating
authority to do NME analysis on case to case basis.
There has been no consultation between China and the European Union after
2008 with regard to the market economy status of China.66 Thereby, due to
China’s NME status, the European Commission's investigating authority uses
the surrogate country method for the determination of normal value in the
investigations involving China.67 The EU still treats China as an NME even
after the expiry of Article 15(a)(ii). For instance, in the anti-dumping
investigation initiated by the European Union against China involving tyres,
the European Commission treated China as an NME and used the surrogate
country method considering the United States as a surrogate country.68 In
2015, there was a major change in European Union’s anti-dumping regime.
The anti-dumping laws applied not only to the WTO Members but also to the
non-WTO Members. 69 According to it, in anti-dumping investigations,
domestic costs and price will apply except in cases where there exists
‘significant distortion’. The criteria for the determination of significant
distortions are state policies and influence, the widespread presence of state-
owned enterprises, discrimination in favour of domestic companies and the
65
THE COMMISSION STAFF DOCUMENT ON PROGRESS BY THE PEOPLE’S REPUBLIC OF CHINA
TOWARDS GRADUATION TO MARKET ECONOMY STATUS IN TRADE DEFENCE
INVESTIGATIONS, 4 (2008).
66
DIRECTORATE-GENERAL FOR EXTERNAL POLICIES, POLICY DEPARTMENT, EUROPEAN
PARLIAMENT, Assessment of Trade Defence Policy Decisions for 2014, 6, (2015)
67
REGULATION 2016/1036 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL OF 8 JUNE
2016 ON PROTECTION AGAINST DUMPED IMPORTS FROM COUNTRIES NOT MEMBERS OF
THE EUROPEAN UNION, (JUNE 8, 2016)
http://trade.ec.europa.eu/doclib/docs/2016/june/tradoc_154702.en.L176-2016.pdf.
68
EUROPEAN COMMISSION, NOTICE OF INITIATION OF AN ANTI-DUMPING PROCEEDING
CONCERNING IMPORTS OF NEW AND RETREADED TYRES FOR BUSES OR LORRIES
ORIGINATING IN THE PEOPLE'S REPUBLIC OF CHINA, 2017 O.J. (C 264) 14,16.
69
REPORT ON THE ON THE PROPOSAL FOR A REGULATION OF THE EUROPEAN PARLIAMENT
AND OF THE COUNCIL AMENDING REGULATION (EU) 2016/1036 ON PROTECTION AGAINST
DUMPED IMPORTS FROM COUNTRIES NOT MEMBERS OF THE EUROPEAN UNION AND
REGULATION (EU) 2016/1037.
16
Rights of Persons with Disability in Nigeria
Similar to the European Union and the United States, India also uses the
surrogate country method in cases involving NME.73 The legal regulation of
NME in India in anti-dumping cases is governed by Customs Tariff
(Identification, Assessment and Collection of Anti-Dumping Duty on Dumped
Articles and for Determination of Injury) Rules, 1995 (“Rule, 1995”) and the
Customs Tariff Act, 1975.74 Under India law, a country is designated an NME
if the investigating authority reaches a conclusion that such country does not
operate under the market economy conditions which means that the market
does not work on market forces as the prices do not reflect the true market
value due to significant State intervention. There has been an amendment to
the 1995 Rules, it has been provided that there exists a rebuttable presumption
of a NME if in the preceding three years, the country has been categorized as
NME.75 The exporter can rebut the presumption showing that the criteria for
determination of non-market economy do not exist.
70
EUROPEAN COMMISSION PRESS RELEASE, Commission welcomes agreement on new anti-
dumping methodology, IP/17/3668 (October 3, 2017).
71
Inama, Stefano and Edwin Vermulst, CUSTOMS AND TRADE LAWS OF THE EUROPEAN
COMMUNITY, 250-251, (1999).
72
Ibid
73
7, Annexure 1, CUSTOMS TARIFF (IDENTIFICATION, ASSESSMENT AND COLLECTION OF
ANTI-DUMPING DUTY ON DUMPED ARTICLES AND FOR DETERMINATION OF INJURY)
RULES, 1995 (hereinafter INDIAN ANTI-DUMPING RULES).
74
INDIAN ANTI-DUMPING RULES; THE CUSTOMS TARIFF ACT, 1975.
75
8 (2), Annexure 1, INDIAN ANTI-DUMPING RULES.
17
includ-ing the price actually paid or payable in India for the
like product, duly adjusted if necessary, to include a reasonable
profit margin. An appropriate market econ-omy third country
shall be selected by the designated authority in a reasonable
manner [keeping in view the level of development of the
country concerned and the product in question] and due
account shall be taken of any reliable informa-tion made
available at the time of the selection. Account shall also be
taken within time limits; where appropriate, of the
investigation if any made in similar matter in respect of any
other market economy third country. The parties to the
investigation shall be informed without unreasonable delay the
aforesaid selection of the market economy third country and
shall be given a reasonable period of time to offer their
comments”.76
The investigating authority considers the following criteria in form of
a questionnaire for the determination of the market economy status:
18
Rights of Persons with Disability in Nigeria
paragraph]”.77
In certain cases, the investigating authority does not take into consideration
surrogate country methods due to lack of complete data with regard to the third
country or the domestic prices of the product under investigation in the third
country. Consequently, the authority resorts to construct a normal value which
is based on the cost of production along with selling, general and
administrative costs, and reasonable profits along with international prices of
raw material and inputs, prices of inputs, conversion costs and cost of
utilities.78 Moreover, in cases where the period of investigation was prior to
December 11, 2016, the investigating authority considered China to be an
NME as Article 15(a)(ii) still existed at that point of time.79 Such practices by
the investigating authority enable the Chinese exporters and the producers to
claim market economy status even in the cases where the period of
investigation also includes the periods which are post-December, 2016.80 This
practice is not followed in the United States.81
5. CONCLUSION
The implication of expiry of Article 15 means that neither the investigating
77
7 (3), Annexure 1, INDIAN ANTI-DUMPING RULES.
78
DIRECTORATE GENERAL OF ANTIDUMPING AND ALLIED DUTIES, Anti-Dumping
Investigations concerning imports of Diethyl Thio Phosphoryl Chloride originating in or
exported from China PR, 68, (May 6, 2010); DIRECTORATE GENERAL OF ANTIDUMPING
AND ALLIED DUTIES, Anti-dumping investigation concerning imports of “Albendazole”
originating in on exported from China PR, 29,
http://www.dgtr.gov.in/sites/default/files/adifin_Albendazole_ChinaPR.pdf, (November
5, 2015); DIRECTORATE GENERAL OF ANTIDUMPING AND ALLIED DUTIES, Sunset Review
of Anti-Dumping duty on mports of ‘Melamine’ originating in or exported from China PR,
31 (December 5, 2015).
79
DIRECTORATE GENERAL OF ANTIDUMPING AND ALLIED DUTIES, Anti-dumping
investigation concerning imports of “Color coated / prepainted flat products of alloy or
non-alloy steel” originating in or exported from China PR and European Union-reg
(August 30, 2017); DIRECTORATE GENERAL OF ANTIDUMPING AND ALLIED DUTIES,
Sunset Review investigation of Anti-dumping duty imposed on the imports of Certain
Rubber Chemicals, namely, TDQ and PX-13 originating in or exported from the
European Union and MOR and MBTS originating in or exported from the Peoples
Republic of China, 42, (September 2, 2017).
80
DIRECTORATE GENERAL OF ANTIDUMPING AND ALLIED DUTIES, Anti-Dumping
investigation concerning imports of “Belting Fabric” originating in or exported from
People’s Republic of China (August 23, 2017).
81
Nedumpara James J., and Archana Subramanian, supra note 26, at 54.
19
authorities are empowered to use prices which are not based on Chinese prices
merely because of the fact that Chinese exporters failed to satisfy the market
economy conditions, nor does it lead to absolute ban on special methodologies
for the determination of the normal value. Its implication is that such an
application must be in consonance with multilateral rules and regulations
envisaged under Article VI:1, GATT along with Article 2 of the Anti-
Dumping Agreement as opposed to the market economy conditions which has
been created unilaterally by each State. Such an interpretation would prevent
the distortion in the global trading order.
It is not fruitful to ponder that the substantial amount of trading order will be
affected by the grant of market economy status. It evident by the fact that the
country which has granted market economy status to China reveals that it had
wide-ranging impact in terms of both, later anti-dumping cases and growth of
trade. For instance, grant of the market economy status had positive impact in
case of Australian and New Zealand.82 Whereas, in Latin American countries,
it negatively impacted the trade coverage ratio as, since the grant of market
economy status, there has been a rapid increase in the number of anti-dumping
cases.83 The market economy status mandates transparency. A country
aspiring to join market economy status must supply with all the required
information. Upon the supply of information, the investigating authority must
be obliged to act in an objective manner which minimises distortion in the
determination of the dumping margin due to the discretion of the investigating
authority. Only through the reconfiguration of the roles of the parties, there
will be a meaningful application of the anti-dumping laws vis-à-vis dumping
margin of imports from China otherwise the entire global trading order will be
destroyed by the monster of its own creation.
82
Curran, Louise and Andoni Maiza, Here There Be Dragons? Analysis of the Consequences
of Granting Market Economy Status to China, 50(6) JOURNAL OF WORLD TRADE, 1058,
1029-1060 (2016)
83
Ibid
20