The Surrogate Country Rule In EU's Anti-dumping Investigation And Its Latest Change

Fair trade is an important theory under the trade protectionism in contract to trade liberalism.It insists that necessary trade remedy measures should be imposed on unfair competition.The surrogate country rule is the method used in governments' anti-dumping investigation to determine the normal value which permits a proper comparison.Take China as an example,other countries always initiate anti-dumping investigates and use the surrogate country rule by denying our Market Economic Status or using “the particular market situation” in the Agreement on Implementation of Article VI of the General Agreement On Tariffs and Trade 1994.In December 12,2017,EU amends their regulation about anti-dumping and anti-subsidies.In the new regulation,EU cancels the Non-Market Economic Status list and put up with the concept –Significant Distortion which means that countries with significant distortion have continuously to use the surrogate country rule.EU says that it is not appropriate to use domestic prices and costs in the exporting country due to the existence of significant distortions and the normal value shall be constructed on the basis of costs of production and sale reflecting undistorted prices or benchmarks.The sources that may be used include undistorted international prices,costs,or benchmarks,or corresponding costs of production and sale in an appropriate representative country with a similar level of economic development as the exporting country,or domestic costs when they are positively established not to be distorted on the basis of accurate and appropriate evidence.Compared to nowadays' anti-dumping regulation,the new regulation is different from the premise of the use of the alternative price and the choices of it.Also,it has changed when calculating the normal value of the like product.However,using the rule of Significant Distortion to adopt the surrogate country rule is inconsistent with the WTO rules.There is no significant distortion rule in the WTO anti-dumping regulations.Also,the Significant Distortion rule is not consistent with comparability request in WTO rules.It seems to pay too much attention to the government intervention and blur the distinctions between anti-dumping and anti-subsidies by using the concept DISTORTION and BENCHMARK which are more common to see in the anti-subsidies fields.Furthermore,the surrogate country rule itself is unreasonable and is not reliable to meet the need of comparability.EU seems no longer to use Non-Market Economic Status to take alternative prices when calculating the normal value of import goods from China,but in fact it still does.The fundamental reason is the institutional discrimination from market economy country to socialist country.From the attitude of the legislature of EU and other policies of EU towards international trade,china and its export enterprises may be faced with even fiercer trade defense instruments.Along with the expiration of certain provision of China's accession protocol,it is meaningless to discuss if the Market Economic Statues is ought to be delivered to China.Instead,we should appeal to the WTO Dispute Settlement Body about the unlawfulness of the Significant Distortion and make higher demands on the use of the surrogate country rule.Also,it is necessary to take countermeasures in trade disputes towards other countries' unlawful trade defense instruments.Besides,china are supposed to join global governance so as to make rules benefit to all of the developing countries and twist the stereotype of western countries' attitude towards socialist country by showing the comparative advantages of China.Last but not least,question the long-criticized surrogate country rule and even the anti-dumping and anti-subsidies rules so as to radically solve the dispute between China and EU' trade.