A Case Study Of CE-Fasteners On China’s NME Problem

China has been into WTO for more than10years. During thepast decade, China has achieved a lot while lost a lot. America,EU and the other countries have been treating China as a NME(Non-Market-Economy) country and implementing surrogatecountry rules and countrywide duty against China which makeChina take a high tax burden and lost price advantage ininternational trade.NME is a system including NME status and NME treatment,which is first raised by America and then developed by Americaand the other countries during their antidumping practiceprocess. It can be dated back from the period of the Cold War.It is of the mentality of the Cold War and trading protection.NME rules in the EU Antidumping Basic Law are consisted ofMET (Market Economy Treatment) and Surrogate Country in article2(7) and Country-wide duty in article9(5). According to theEU Antidumping Basic Law, exporters in China have to accept the MET text to get MET which makes domestic price the normal valueto decide antidumping margin and duty rate. If not, there willbe a country-wide antidumping margin and duty rate based on theprice of a third surrogate country. But the company which isdenied the MET can also apply a IT (Individual Treatment). WhenIT is granted, the company can get a individual duty based ona third surrogate country price, if not, it can only get acountry-wide antidumping margin and duty rate based on theprice of a third surrogate country.China has successfully challenged the EU Antidumping BasicLaw article9(5) in EU-Fasteners antidumping dispute, theAppellate Body confirms that article9(5) which takescountry-wide antidumping margin and antidumping duty rate asgeneral and individual antidumping margin and antidumping dutyrate as exception is contrary against the Antidumping Agreementarticle6.10and article9.2. At the same time, the AppellateBody declares that Section15of China’s Accession does notauthorize WTO Members to treat China differently from other Members and it only relates to the determination of normalvalue.The first part of this essay is about the information ofthe case. The second part describes the reason why China isalways troubled with NME in the view of politics, economy andlaw. In the third part, a detail analysis will be given out onrules involved in this case, including surrogate country,country-wide duty, NME and IT. The last part of this essay willbe about what kind of effect will be brought out for thefasteners industry and antidumping laws against China, whatelse, how China prepares for the antidumping appeals in thefuture.The CE-Fasteners antidumping dispute is of a great sensefor China. It is the first time for China to challenge unfairrules against market economy countries to protect our own rightin world trade activities.