Legal Analysis To US-China Safeguard Case Of Tires

The United States raised the product-specific safeguard measures investigation case of tires, which is the first and biggest case the United States against Chinese products by Obama administration. The case not only causes damage to the tire manufacturers and traders in Chin, but also causes China's foreign trade chain vicious cycle. Since the Global trade protectionism "north American demonstration effect" caused by this case has been quietly tedium, how to actively respond to the safeguard investigation is a question.Market disruption determination standards are judging whether implement safeguard measures against Chinese products, implementing key can safeguard measures of the main basis is the section 421 of the Trade Act of 1974. However, the concept is not clear, the determination standards were too low, and there is biggish discretion space, it displays in:The section 421 of the Trade Act of 1974 does not explicitly defined "domestic industry", the definition of the American safeguard measures legislation will domestic industry as "similar or direct competition products of domestic producers combined, or those same or direct competition products of the cumulative yield of domestic production major parts of the manufacturer". When defining "domestic producers", USITC used the section 202 of the Trade Act of 1974, "if a domestic producers also importers, will only its domestic production as part of a domestic industry". When defining "similar or direct competition product", determine whether for "direct" competitive product is one of the important factors can replace imported products of domestic products.The section 421 of the Trade Act of 1974 only briefly stated by "import increasing rapidly, whether absolute increase or relative increase", and didn't define what is "increasing rapidly", also no boundary increase time or specific situations, then, USITC has a lot of discretion. USITC adopted a more relaxed standard, it displays in:increasing rapidly should be happened recently or ongoing, not in the distant past happen; the increase must be happen quickly, whether absolute increase or relative increase; USITC in criminal Chinese imports of goods including American domestic some producers are oneself to the above product import when evaluating, and gave no producers to import part exclude; USITC took "only the products imported from China increase quickly" for the range of judgment.The section 421 of the Trade Act of 1974 and the legislative history records neither defines "material injury" or "threat of material injury", nor lists any economic factors or reference concept, factors. Inspect American relevant legislation and its explanation, America actually also insisted the "real damage" required damage degree below the "serious damage" position, but low to what extent, USITC seems to be rooted in China with the United States suspects products whether related products that compete as investigation starting point.According to the section 421 of the Trade Act of 1974, imports from China should be a "significant cause" of material injury or threat of material injury, "the important domestic industry caused substantial damage a reason, but its importance shall not be equal to than other reasons why." In this standard, there is no need the two occur in the same time, and to consider other factors.Because the section 421 of the Trade Act of 1974 and the legislative history records had no specific rule the type of safeguard measures, USITC in relevant cases made broad explanation. Because of the lack of corresponding entities standard of the time and the applicable level, the factors and standards are not uniform, difference and dispute made much more uncertainty, its ultimate choice of base year and standard also often on Chinese products adverse.The determination of the USITC also discrimination and liberty:USITC only chosen 10 tyre producers s as its domestic industry, and then, the USITC determined that there was market disruption to the domestic industry, the determination was based on the "most" producers rather than domestic producers "whole". USITC should make specific explanation of domestic producers accumulated production indeed constitute the main part of the domestic production, and should not accept domestic producers of import as "domestic industries" only because of none of "exclusion related-party" clause. There was no direct competition relation between the two tires, for the China's mainly supply American tire maintenance market, while the United States sell the related tyre was mainly supplies the original market and replace the market.USITC omitted "increase must be happen quickly, whether absolute increase or relative increase," USITC cannot prove imports increased enough, sharply enough and major enough. If just "part" manufacturers launched special security measures application and submitted the financial data, USITC should make specific explanation of domestic producers accumulated production indeed constitute the main part of the domestic production, Judged by "the products imported from China only" was also unfair.USITC should consider all relevant economic factors, including production equipment, profit and unemployment, but USITC had no idea with financial information and capital allocation scheme of the domestic producers. Meanwhile, USITC can't just rely on that retards evidence, and ignore the display a domestic industry unaffected by the damage of evidence.USITC did not explain the conditions of competition and other reasons, USITC did not established any temporary contact between import product increase rapidly and the material injury to the domestic industry. If knowing other factors, such as the industry adjustment, import from other countries, and the global economic crisis, USITC should put these factors as the" objective factors" under paragraph 16 of its Protocol of Accession.The United States imposed a transitional safeguard measure that went beyond the extent necessary, and thus it was inconsistent with paragraph 16.3 of the Protocol, the United States imposed a transitional safeguard measure for a three-year period that went beyond "such period of time" that was "necessary", and thus it was inconsistent with paragraph 16.6 of the Protocol.These measures are not properly justified as China-specific restrictions, China should take active trade relief measures, make full use of WTO dispute mechanism, due to the DSB appeal, in order to safeguard the lawful rights and interests of Chinese industry.