U.S. court's CVD ruling good news for Chinese exporters, says researcher

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A Chinese scholar of foreign trade said Wednesday that a ruling by the U.S. Court of Appeals for the Federal Circuit (CAFC) was an "epoch-making" victory for Chinese exporters who have long suffered unfair countervailing duties from the United States on top of anti-dumping duties (AD).

The CAFC decided Monday that countervailing duty (CVD) law should not apply to "non-market economy" (NME) countries in line with the U.S. Congress legislatively ratifying consistent interpretations that government payments cannot be characterized as "subsidies" in a NME context.

"The ruling has provided clear judgment on the suitability for the U.S. to levy both anti-dumping and countervailing duties against a non-market economy," said Tu Xinquan, associate director of China National Institute of WTO at the University of International Business and Economics, in a comment reported by the Shanghai-based daily China Business News.

The CAFC decision came after Chinese tire maker Hebei Starbright Tire Co. Ltd. and its U.S.-based parent company GPX International Tire Corporation appealed to the U.S. Court of International Trade (CIT) following a decision by the U.S. Commerce Department to levy a 14-percent CVD on Hebei Starbright Tire in August 2008, the newspaper reported.

The CIT had ordered the U.S. Commerce Department not to impose CVD on goods from China because of the high likelihood of "double counting" when both CVD and AD were applied against goods from NME countries.

Sun Yong, an expert for legal matters with Double Coin Holdings Ltd. said this ruling showed that Chinese tire companies have the right to seek their rightful interests, and that the legal judgement of a "double slapping" of both CVD and AD by the U.S. Commerce Department is not sound.

However, Tu Xinquan warned that similar tricks from the U.S. government will not be stopped in future if its political motives for trade protection remain.

CBN reported that a government official of China's Ministry of Commerce had told the newspaper Tuesday that the ministry has learned of the CAFC ruling and that it is currently addressing the case.