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  • KITA, “Biden's Administration Will Actively Utilize Import Control Measures”
    2021-04-01 hit 245

    KITA, “Biden's Administration Will Actively Utilize Import Control Measures”

     

    - U.S. is highly likely to maintain anti-dumping investigation methodology despite its violation of the World Trade Organization (WTO) obligations was confirmed -

     

    With the inauguration of Biden's new administration, many expected that relations with allies and multilateralism would be restored. However, it was forecast that the United States' import regulation trend, represented by anti-dumping measures, would continue and solidify. In the past, the average annual number of new investigations on anti-dumping in the United States was around 20 to 30, whereas in 2020, a total of 89 cases were recorded. Moreover, the methods and practices of the U.S. investigating authorities are showing signs of adhering to higher anti-dumping duty rates.

     

    According to a report titled, “The Biden Administration's Prospects for Trade Relief Policy: Focusing on the Current Status of Anti-Dumping Investigation Practices”, issued by the Institute for International Trade of the Korea International Trade Association on April 2nd, the analysis of data over the past decade on anti-dumping measures in the United States demonstrated that after the revision of the Anti-Dumping Procedure Act to grant discretion of the investigating authorities during the Obama administration, the United States has frequently applied the controversial 'adverse facts available (AFA)' or 'particular market situation (PMS)' provisions and the anti-dumping duty rate turned out to be much higher than before. In addition, the report raised questions about the United States' willingness to comply with multilateral norms by pointing out that the country has not corrected the 'Targeted Dumping' and 'Single Rate Presumption' practices that have been conventionally applied in anti-dumping investigations for a long time, despite the ruling that they violate the WTO agreement.

     

    The United States has applied adverse facts available (AFA) provision, which has been an excessive burden on export companies, on significantly increasing number of cases and the provision has allowed high dumping margins since 2016, just after the amendment. The report stated, “The number of anti-dumping measures imposed by the United States based on the AFA provision came to around five annually before 2016, but it surged to 31 since that year,” and added, “In addition, with the Total AFA, which denies all data submitted by the exporters and applies the highest dumping margin, the average dumping margin doubled from 64.8 percent between 2008 and 2015 to 113.3 percent from 2016 to the present.”

     

    In the case of the Particular Market Situation (PMS) provision, which the United States cited for the first time on Korean companies, it was confirmed that the U.S. Commerce Department exercised wide discretion in determining the situation on the domestic market of the exporting country and greatly raised the dumping margin of exporters. The United States began to apply PSM to various countries and items starting with Korean products. In 2020, the United States carried out investigations on imported products from South Korea, India, Turkey and Germany based on the provision.

     

    The report also pointed out the current status and problems of targeted dumping and the application of single rate presumption. It stated, “The United States has developed so-called targeted dumping methodology since 2008, the practice of increasing the dumping margin by 'zeroing' in on targeted dumping has continued until now. It was analyzed that many of the accused companies could be excluded from the tariff imposition in the first place if the targeted dumping methodology had not been applied.

     

    In non-market economies (NME) such as China and Vietnam, where many Korean companies are located, the United States continues the practice of treating all exporters as a single entity under government control and applying the same dumping rate. According to the report, the U.S. anti-dumping survey showed that the NME-wide rate was below 200 percent until 2016, then averaged 203 percent in 2017, and reached a maximum of 300.9 percent in 2019.

     

    Kim Kyung-hwa, a senior researcher at the Korea International Trade Association, said, "It is highly likely for the Biden administration to actively utilize anti-dumping policies," and stressed, "With the World Trade Organization taking a weaker role in dispute settlements, Korean companies need to actively use U.S. courts to cope with the U.S. Commerce Department's investigation. Also, Korean government should utilize various channels to consistently point out the problems of the U.S. Commerce Department's practices and request them to correct.”

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