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RILA's concerns on methodoligies for countervailing duty on imports

May '07
A large business coalition led by RILA sent a letter last week to United States Secretary of Commerce Carlos Gutierrez raising concerns regarding the methodologies used to apply the countervailing duty law to imports from China in a precedent-setting case on glossy paper.

The letter urges him to recognize the significant and far-reaching impact of the Department's recent decision and to address two specific concerns.

First, the letter urges the Department to modify its special nonmarket economy (NME) methodology used to calculate constructed value in antidumping proceedings to avoid inappropriate double remedies being imposed for the same subsidies.

Second, the letter encourages the Department to calculate the level of alleged subsidization in a way that is consistent with U.S. commitments to the World Trade Organization (WTO).

This requires the Department to use benchmark rates within China unless “special difficulties” arise and it is not practical to use and/or adjust Chinese benchmarks.

In the glossy paper preliminary determination, rather than using or adjusting Chinese benchmarks, the Department created an aggregated international benchmark for Chinese loans based on interest rates in countries such as Ecuador, Djibouti, Swaziland, and Syria, without taking into account factors that directly impact interest rates such as inflation or a public account deficit.

Without these improvements, the United States would likely expose itself to litigation and retaliatory actions from trading partners, thereby eroding public support for the WTO rules-based trading system, and send the wrong signal to our trading partners, who increasingly are using their own antidumping and countervailing duty laws against U.S. exports.

Retail Industry Leaders Association

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