Anti-dumping and China: Three Major Chinese Victories in Dispute Resolution

Abstract

China has traditionally been treated as a non-market economy for purposes of anti-dumping investigations. The result was that countries determined whether dumping was taking place by comparing the export price from China with the normal value established in a third country. The European Union (EU) also determined the export price from China on the basis of the average export price from that country unless an exporter met specific requirements set for the EU’s ‘individual treatment’ standard. China challenged these practices both in the World Trade Organisation (WTO) and in European courts, while the South African International Trade Administration Commission (ITAC) appealed a decision from the High Court on how it had to treat imports from China. The Appellate Body of the WTO ruled that China’s accession agreement to the WTO did not provide for the determination of export prices on any basis other than each individual exporter’s own prices, unless the investigating authority made a specific finding that two or more parties are related, in which case those parties could be treated as a single entity. Before the European Court of Justice (ECJ), in an appeal lodged by the Council of the European Union, the ECJ found that the Council could not equate ‘government control’ in a company with ‘government interference’, and that the Council had to make a specific finding as regards interference before it could find that a company was not operating under market conditions. In South Africa, the Supreme Court of Appeal found that there was no duty on ITAC to consider any information submitted by parties to show that exporters in China were operating under non-market conditions, thus paving the way for ITAC always to treat cooperating exporters as operating under market conditions in disregard of the provisions of the applicable legislation. The verdicts in these three fora have significantly altered the way in which future antidumping investigations will be conducted against Chinese exporters, and will allow those exporters greater access to the EU and South African markets. It is submitted that while the decisions in the WTO and the ECJ are correct, the Supreme Court of Appeal in South Africa delivered an incorrect decision in the ITAC appeal, and in so doing rendered parts of the law redundant.