This article is co-authored by Elliot J. Feldman and John J. Burke.

 Until now, China has preferred the WTO to resolve trade disputes. Of a dozen countervailing duty cases brought against Chinese products, all but one (the coated free sheet paper case failed at the International Trade Commission) went adversely before U.S. agencies and the Government of China challenged none of these final agency determinations in U.S. courts. Instead, China consolidated four of them and complained at the WTO.

We have indicated before our doubts about the wisdom of this choice (see our blog article titled WTO Challenges: Not Always A Panacea For Respondents In Trade Litigation). Now, there is new evidence. In GPX International Tire Corporation v. United States, a case brought before the United States Court of International Trade (“CIT”) by private parties (not the Government of China), Chief Judge Jane Restani found an important flaw in the procedures of the United States Department of Commerce that could return substantial sums of money to importers of Chinese goods and alter the way trade remedy actions are brought and analyzed against China. Although this victory for Chinese interests is less than suggested by its advocates and some in the trade press, it is significant nonetheless and comes at an important time. The Chinese Government has achieved nothing comparable in its efforts at the WTO.

Judge Restani’s decision does not preclude the Department of Commerce from initiating countervailing duty investigations against China or any other non-market economy. In fact, its impact is more likely to be seen in the conduct of antidumping cases against China. Judge Restani held that, when Commerce chooses to apply the countervailing duty law to China with respect to the same products for which it also is calculating antidumping duties, using the non-market economy methodology, Commerce must alter its antidumping calculations to avoid counting the same subsidy twice. She noted that Commerce would have to accomplish this task within the confines of the non-market economy provisions of the antidumping law. She remanded to Commerce to find some way to resolve this problem.

The easiest way for Commerce to resolve the double counting problem, as strongly hinted by Judge Restani, would be to resume its old practice of more than twenty years of not applying the countervailing duty laws to non-market economies. She noted that the Court of Appeals for the Federal Circuit in the 1986 case, Georgetown Steel, held that Commerce was not required to apply the countervailing duty laws to non-market economies. Many legal commentators had interpreted the Georgetown Steel case as prohibiting the use of countervailing duty laws to non-market economies. Judge Restani acknowledged that interpretation, but held that Georgetown Steel was ambiguous and she herself found the statute ambiguous. Therefore, she deferred to Commerce’s interpretation as "not unreasonable."

Judge Restani implicitly urged Commerce to abandon its adventure in applying the countervailing duty law to non-market economies, but nonetheless gave Commerce the option of altering its antidumping methodologies to prevent double counting. Given all of the political capital the Commerce Department has now invested in applying the countervailing duty laws to China, we expect Commerce will work hard to find a way to resolve this issue through changes in its antidumping calculations, without returning to the conventional interpretation of Georgetown Steel.

Commerce could separate antidumping from countervailing duty cases. It could decline to initiate them together against the same product. The cost of filing may go up for petitioners, but they might be able to preserve the ability to claim both subsidies and dumping. They could, alternatively, not include alleged subsidies in the calculation of cost of production for dumping, and instead allege all subsidies together in the separate countervailing duty petition. There would be no double-counting, but alleged subsidies would not escape scrutiny.

Judge Restani does not exclude these possibilities. To the contrary, she expressly authorizes as “reasonable” petitions alleging subsidies in non-market economies. She denies overturning Georgetown Steel, but she certainly overturns the popular understanding of it for the last two decades.

Judge Restani also overturned Commerce’s automatic use of December 11, 2000, the date China joined the WTO, as the cut-off date for determining whether a subsidy could be calculated in China. Commerce had been countervailing alleged subsidies conferred after that date, but refusing to investigate any allegations of subsidies conferred before that date. Some of the Chinese companies argued that Commerce could not go back any earlier than the date in 1997 when it announced it would apply the CVD law to China. The U.S. producers argued that there should be no cut-off date. Judge Restani ruled that Commerce must decide how far back to go based on the facts of each subsidy allegation. The bottom line for the Chinese Government and Chinese companies is that they now have to be prepared to defend against subsidy allegations reaching back into the 1990s, a serious setback from core arguments advanced by some counsel for China in the CVD cases.

Judge Restani, Chief Judge of the CIT, has long been a rigorous, thoughtful judge willing to reject the arguments of the United States Government and prepared to interpret the law and international agreements as favoring free trade. However, the Court of Appeals for the Federal Circuit historically has not been unwilling to overturn her. Occasionally, when she thinks a legal issue especially important and perhaps difficult, she assembles a three-judge panel of the court to hear a case. Three-judge panels have not been overturned in the last twenty years. Consequently, this decision is vulnerable to appeal.

Despite the celebration of a Chinese victory, assuming an unsuccessful appeal, there may be many ways around the rejection of double-counting, leaving China with less of a legal victory than it seems now to think. Nonetheless, although China lost the key legal principle at issue in the case – whether subsidy actions can be brought against non-market economies – it won a point that should mean the return of monies to importers of record in the United States and should complicate life for petitioners who were making the simultaneous filing of antidumping and countervailing duty petitions routine. As narrow as that victory may be, it is substantially more than anything gained to date at the WTO, and more than anything likely to be possible at the WTO as to Chinese exposure to CVD petitions.  It ought  to convey several lessons one of which is that U.S. courts are not necessarily inhospitable to Chinese appeals.  Another ought  to be, like the Chinese proverb, that the road is long, and requires many steps.  This appeal should be the first, not the last, on a journey to justify the practices of the Chinese economy.

本文由 Elliot J. Feldman 和 John J. Burke 合著。


        在先前的文章中,我们已经对这种做法表示怀疑(见博文《世贸组织争端解决机制 —-不是贸易纠纷应诉方的万能药》)。现在,又有新证据证明我们的论点。在美国国际贸易法庭受理的GPX International Tire Corporation v. United States 一案中,中国企业(而非中国政府)提出上诉,首席法官Jane Restani裁定美国商务部在调查过程有重大疏漏,这一裁定可帮助进口商拿回多缴的惩罚性关税,同时将改变针对中国的贸易补偿行动。虽然中方这一胜利的意义略小于媒体以及中方律师强调的意义,但仍然是关键时刻取得的显著胜利。中国政府至今尚未在世贸组织取得可以和这一案件相媲美的成就。








        在庆祝中国取得胜利之余,否决双重征税也带来其他许多问题使得中国取得的法律胜利显得并不辉煌。有关本案最关键的法律原则——是否可对非市场经济体展开反补贴调查,中国几乎全盘皆输,只有涉案美国进口商可拿回部分惩罚性关税,让同时递交反补贴、反倾销申诉的美国申诉方面临更多难题。虽然胜利并不显赫,但是这比在世贸组织取得的任何胜利都更具实际意义,而且比未来可能取的胜利更辉煌。 这一案件带来许多启示,其中之一就是美国法庭并非对中国上诉不友善。另一经验是,用中国典故; 路漫漫其修远兮,需要分步走。这一上诉是证明中国经济运作合理性的第一步,而不是最后一步。