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
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.”