A Study Of Impact Of American "Double Reverse" Measures Against Chinese Export Products

In recent years, with the rapid growth of Chinese export, the number of trade remedies initiated to our export products has also risen sharply. Among the countries who have initiated trade remedies to Chinese export products, America is the country who has initiated the most number of trade remedies and involved the largest amount of money."Double reverse" measures become the main measures of the trade remedies implemented by the United States to China, and it continues to intensify."Double reverse" measures are the development of the anti-dumping measure and the countervailing measure, which are implemented by combining the anti-dumping measure with the countervailing measure. In the past, the U.S. countervailing duty law set the provision that the countervailing measures were limited to market economy countries, and the United States regarded China as a non-market economy country and rarely initiated countervailing measures to China. But since the United States Department of Commerce initiated the anti-dumping and anti-subsidy investigations requested by the Newpaper Company on November21st,2006to Chinese coated paper, they have frequently initiated countervailing investigations to Chinese export products and all these countervailing investigations are combined with the anti-dumping investigations. Combining countervailing investigations and anti-dumping investigations makes the responding work of our enterprises greatly increase and become more complex and difficult, if we lose the lawsuits, we will be charged to double duty rates. Since2007, the "double reverse" measures have been extensively used by the American enterprises and become the biggest and most ferocious stumbling block for the Chinese products to enter into the American market. The United States initiated sever "double reverse" investigations in2007and in2008the number is five. Because of the economic crisis in2009, the United States became aggravated and launched ten "double reverse" investigations to our products. This number in2010is two and in2011is four.Currently, the United States target the solar panels originated in China. On October19th,2011, the SolarWorld Industries America Inc. complained to the U.S. International Trade Commission and the U.S. Department of Commerce to initiate anti-dumping and countervailing investigations to Chinese solar panels. Then on November8th,2011, the U.S. Department of Commerce officially initiated anti-dumping and countervailing investigations to the Chinese solar panels exported to America. On December2nd,2011, the U.S. International Trade Commission initially determined that the Chinese solar panels exported to America had damaged the American similar industries. And On March19th,2012, the U.S. Department of Commerce made the preliminary countervailing arbitration. The subsidy rate of Wuxi Shangde Solar Power Co. Ltd is2.9%, the subsidy rate of Changzhou Tianhe Luminous Energy Co. Ltd is4.73%and other companies’is3.61%. On April24th,2012, under the request of American complaining party, the U.S. Department of Commerce issued a notice that they would merge together the final arbitrations’time of the anti-dumping investigation and the countervailing investigation of the Chinese solar panels. This is the first time that the United States initiated "double reverse" investigations to Chinese clean energy products. Taking restrictive measures on Chinese clean energy products, not only destroys the Sino-US good atmosphere of cooperation in the field of new energy, but also hurt the interests of American industries. Such restrictive measures run counter to the trend of the jointly coping with the global climate warming and the challenges of energy security.At present, due to the demonstration effect, not only the United States are enthusiastic about the implementation of "double reverse" measures, but also India, the European Union and other countries or regions have begun to try to initiate "double reverse "investigation or separate anti-subsidy investigations on China. On January2009, India initiated the countervailing investigation on Chinese Sodium Nitrite. This is the first countervailing investigation initiated by India on Chinese export products. In April2010, the European Union launched the first "double reverse" investigation to Chinese coated paper. Therefore, strengthening the researches on "double reverse" measures, finding out the reasons why the United States implement "double reverse" measures to us and analyzing the impact on Chinese export products are extremely urgent. The study of this issue will help the Chinese government and enterprises to better respond to the American implementation of the "double reverse " measures and to protect the interests of the Chinese enterprises. It has a strong practical significance.As a new trade remedy,"double reverse" measures are different from the anti-dumping measure and anti-subsidy measure. The "double reverse" measures have broken up the rule that the countervailing measure cannot be applied to the non-market economy countries and the doubt about the superimposing of the anti-dumping measure and anti-subsidy measure. It has become a new area of the international trade in theoretical research. Both the domestic scholars and the foreign scholars have made deep researches on anti-dumping measure and countervailing measure from the theory and practice, but their researches on "double reverse" measures are not so comprehensive. So, it is necessary to study the "double reverse" measures by using the methods of theoretical analysis and a study of case according the trade theories.Generally speaking, the whole papers can be divided into three parts:the status quo and the reasons of the implementation of the "double reverse" measures, the impact on Chinese export products and the relevant countermeasures. According to my conclusions, the reasons of the implementation of the American "double reverse" measures can be divided into two parts:the economic reasons and the political reasons. Due to the huge Sino-US trade deficits, on February3rd,2010, the U.S. president Barack Obama made a public speech and said that they would be tougher to treat the issue of the RMB exchange rate. This indicates that the United States will initiate the anti-dumping and countervailing measures by using the issue of the RMB exchange rate as an excuse. In recent years, the RMB exchange rate has been a hot issue in the world and the American government has always stressed that the China is the currency manipulator, which is not just against the RMB exchange rate, the more profound reason is probably that the United States want to ease the continue Sino-US trade deficits and the problem of their domestic employment. Since the2009financial crisis, the American unemployment rate has not been decreased obviously. There are a large part of reasons can explain the American high unemployment rate, but most of the American leaders blame on Chinese export products and take the unprecedented trade remedies to China, which becomes one of the reasons that lead to the rising number of "double reverse" investigations against China. In addition, different political parties take different tendencies of the trade policies. The democratic Party, represented by Obama, are more prefer to the trade protection measures, it can be seen from the trade remedies against China after the Obama was selected as the American president. On November71h,2012, Obama beat the Republican Mitt Romney, and won re-election to a second term, which would have a huge impact on the Sino-US trade in the future. Obama is more moderate on the issue of the RMB exchange rate, which means that, for the Chinese monetary policies, there will be a smaller pressure on the RMB exchange rate and it also means a slowing pace of the continuous appreciation of the RMB. The Obama’s re-election is good for the RMB exchange rate. But along with the end of the American election, if the Obama’s re-election can bring a ray of hope for the Chinese export products are still a mystery.There is no doubt that the American "double reverse" measures have enormous impact on Chinese export products. Due to the low profit of Chinese products that are exported to the United States, our enterprises are almost impossible to re-enter into the American market after they suffer the "double reverse" investigations and are imposed on a huge amount of punitive tariffs. Some large enterprises can transfer to other countries, but the small companies will be faced with the risk of bankrupt. In addition, the huge demonstration effect of the American "double reverse" measures is also not conducive to Chinese foreign trade enterprises to expand international markets except the United States. Through a study on the heated "double reverse" investigation against Chinese photovoltaic products, it is more certain that there is a huge impact of American "double reverse" measures on Chinese exports products.In the past four years, the number of American trade lawsuits against China exceeds the whole number of the previous eight years, including the photovoltaic products, the automobile and its components, tires, steels and the policies of rare earth. After revealing the result of the United States presidential election, it should be more alter to the attitudes of Obama in the next four years. In order to repay the voters, the Obama’s promises in the campaign may be come true.According to my study, the enterprises who actively responded to the American "double reverse" investigations are imposed smaller punitive tariffs than others who didn’t respond to the investigations. Under the background that the American "double reverse" investigations become more and more intense, it is worth for us to study what our government and enterprises should do. It is a good strategy to seek solutions under the United States judicial system and the relevant rules of the WTO. Meanwhile, as the main subjects of the "double reveres" investigations, Chinese enterprises should actively participate in the respondent, improve their internal accounting systems and regulate the conduct of management. In addition, in the process of responding to the American "double reverse" investigations, the government and industry associations should actively give help to minimize the loss through joint efforts.