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

50 Pages Posted: 20 Apr 2016

See all articles by Longyue Zhao

Longyue Zhao

Nankai University

Yan Wang

Cornell University; African Development Bank

Date Written: March 1, 2008

Abstract

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.

Keywords: Economic Theory & Research, Emerging Markets, Markets and Market Access, Trade Law, Taxation & Subsidies

Suggested Citation

Zhao, Longyue and Wang, Yan, Trade Remedies and Non-Market Economies: Economic Implications of the First Us Countervailing Duty Case on China (March 1, 2008). World Bank Policy Research Working Paper No. 4560. Available at SSRN: https://ssrn.com/abstract=1108708

Longyue Zhao (Contact Author)

Nankai University

94 Weijin Road
Tianjin, 300071
China

Yan Wang

Cornell University ( email )

Ithaca, NY 14853
United States

African Development Bank ( email )

Rue Joseph Anoma
Abidjan, Ivory Coast 01 BP 1387
Ivory Coast (Cote D'ivoire)

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