EU not ready to grant China market status

Seattle Post-Intelligencer: AP - Business: EU not ready to grant China market status: "EU not ready to grant China market status

By PAUL AMES
ASSOCIATED PRESS WRITER

BRUSSELS, Belgium -- The European Commission said Wednesday it was not ready to grant market economy status to China - a move that would help Beijing avoid punitive antidumping measures.

Francoise Le Bail, chief spokeswoman for the European Union's head office, said it was unclear when China would meet EU criteria for being a market economy.

'The Commission is checking to see if China fits this criteria,' she said. 'It's a very technical process ... It's difficult to give a deadline.'

On Thursday, Commission President Jose Manuel Barroso was to visit China for talks focusing on trade and political cooperation.

In a statement, Barroso noted that the EU last year replaced the United States as China's largest trading partner, with annual trade totaling 174 billion euros ($212 billion). China is the EU's second-largest trade partner, after the U.S.

'Our challenge now is to understand China's dramatic re-emergence, to learn to work better with this tremendous country and seize the opportunities provided by its unprecedented growth,' Barroso said.

Nevertheless, Barroso will face a number of tricky issues in Beijing, including EU nations' failure to agree on lifting a 15-year arms embargo on China, surges in Chinese footwear imports and long-standing human rights concerns.

Australia granted China market status in April, but many of Beijing's other trading partners have held back because of concerns that Chinese authorities still interfere too much in business.

London's Financial Times last week quoted Ian Pearson, Britain's minister of state for trade, as saying his government was talking with its EU partners on the subject. 'We in Britain believe China should be granted market economy status,' he was quoted as saying during a visit to China.

The market label is a prized commodity. Among other benefits, it allows countries to provide their own evidence when they are accused of price-fixing on the international export market.

As world trade opens up, such accusations are becoming a favorite way of erecting alternative trade barriers.

During Barroso's five-day visit, he planned to meet President Hu Jintao and Prime Minister Wen Jiabao in Beijing, and to travel also to Hong Kong and Macao."

CIT Issues Opinion Resolving Duty Drawback Adjustment Issue in Antidumping Cases

Senior Judge Tsoucalas of the U.S. Court of International Trade (CIT) on 12th May 2005, issued an opinion that conclusively resolves a major issue involving the duty drawback adjustment used in many U.S. antidumping cases. In Allied Tube & Conduit and Wheatland Tube v. United States, Slip Op. 05-56 (May 12, 2005), the U.S. standard pipe industry appealed the U.S. Department of Commerce's (DOC) decision to grant a duty drawback adjustment in calculating the Borusan Group's (Borusan), dumping margin in the 2002-2003 antidumping review on standard pipe from Turkey. Borusan is Turkey's leading producer and exporter of steel pipe and tube products.

In its brief submitted to the CIT, DOC contended that it properly applied its standard two-prong test for granting a duty drawback adjustment and properly determined that Borusan satisfied the requirements of the test. DOC also stated that it verified that Borusan paid duties upon inputs used in the production of merchandise sold domestically. Borusan's brief noted that there is no additional requirement in U.S. law that a respondent must show that it paid duties on other imported raw materials or that its home market price was based on a duty-inclusive cost. In any event, Borusan stated that it had provided evidence during the sales verification that it paid import duties on imported raw materials.

In an opinion issued only 15 days after the oral argument, Judge Tsoucalas found that that the statute is clear on its face and neither U.S. law, CIT precedent or DOC's practice required Borusan to prove that it paid import duties on inputs used in the home market. Moreover, Judge Tsoucalas held that DOC's determination that Borusan satisfied both prongs of its standard two-prong test for duty drawback adjustments was supported by substantial evidence and in accordance with law. As a result, the court denied Allied TubeÂ’'s claims in all respects and found that DOC properly granted Borusan's duty drawback adjustment.