Study On Anti-Circumvention Under Anti-Dumping And Anti-Countervailing Frameworks

This article comprehensively discusses and analyses a new challenging problem faced by China since its accession to the World Trade Organization (WTO). The problem referred to is the increasing imposition of anti-circumvention investigations and measures against Chinese products.It witnessed significant improvement on China's macro-economy, international trade and utilizing foreign investment during the past 30 years. Having become more involved into the international community, China makes good efforts to domestic development and international economy. As to international trade, the total amount of imports and exports reached 2 trillion in 2007, an increase of 27.5% over 2001, rising from the sixth highest one in the world to the third. Accompanied by China's increasingly important role in the world, trade remedy measures against China began to grow, among which anti-dumping and anti-countervailing measures are the most major tools. According to the statistics in 2008, 21 countries and regions initiated 93 trade remedy investigations against China's exports, relating to a sum of 6.14 billion. Among these investigations, there are 70 anti-dumping and 11 anti-countervailing investigations respectively, which account for 87% of the investigations. Due to the severe remedy measures and the following costs, Chinese exporters start to circumvent anti-dumping duties and countervailing levy. Although, in number, there are less anti-circumvention investigations compared to anti-dumping and anti-countervailing investigations, both developed and developing countries pay more attention on anti-circumvention measures against China. From 2001 to 2007, EU initiated 18 investigations. During 2005 to 2008, the United States initiated 6 investigations. Developing countries, including Turkey, Mexico, Argentina and South Africa are responsible for 7 investigations.As regards domestic level, EU and the U.S. have built matured rules and accumulated rich practices in anti-circumvention area. WTO as well as its predecessor GATT also endeavored to reach a consensus on multilateral"anti-circumvention"articles. It is predicted that Chinese enterprises would without doubt face more and more anti-circumvention investigations in the future. Study on circumvention and anti-circumvention practices under anti-dumping and anti-countervailing frameworks therefore is extraordinarily urgent and necessary.Considering that Doha Round has not made any material progress on anti-circumvention, it currently remains in domestic regimes. This article will examine, compare, theoretically and empirically, the anti-circumvention legislative histories in developed and developing countries, as well as review related negotiations in Uruguay and Doha Round. The article will then discuss legal issues about anti-circumvention through studying past investigations, preliminary and final decisions.Finally, some suggestions as to how China can construct better strategies to deal with circumvention and anti-circumvention will be provided. Specifically, this article is composed of four parts.In part one, an analysis of the cases regarding to Chinese circumvention practices and the investigations against such practices will, firstly, be provided. Anti-circumvention statutes and measures will be examined from the perspectives of developed and developing countries, particularly the EU, the United States and South American countries. Meanwhile, this part will review and analyze the anti-circumvention articles concluded in Dunkel Draft in Uruguay Round and Chair Texts of ADA and SCM Agreements in Doha Round.Part two will discuss legal issues of anti-circumventions statues under domestic and international frameworks. The legal and economic analysis on the necessity and legitimacy of anti-circumvention law will be firstly provided. Questions such as whether domestic anti-circumvention regimes are consistent with principles of WTO and GATT and whether any overlaps and conflicts between anti-circumvention law and origin rules exist will then be studied in deep.Part three will then analyze China's domestic anti-circumvention regime and discuss its shortcomings. Some suggestions as to how China can establish better strategies to deal with circumvention and anti-circumvention will be provided.This article will conclude by highlighting the importance of establishing a balance framework for addressing circumvention and anti-circumvention in China. Such a framework is paramount, as it will curb circumvention practices undertaken by some Chinese exporters and reduce the potential risk of certain WTO Members abusing anti-circumvention measures to unfairly restrict trade.