David A. Gantz

Introduction

Vietnam agreed in its Protocol of Accession to the WTO (incorporating the Working Party Report) that for up to twelve years after WTO accession (January 2007) WTO Members bringing antidumping actions against Vietnam could use the generally unfavourable NME methodology for calculating anti-dumping and countervailing duties. This unavoidable concession results in a continuing risk of anti-dumping and, recently, countervailing duty, actions against Vietnamese exports, particularly those brought in United States and the European Union. The methodology has typically resulted in exaggerated dumping margins, as in Frozen Fish Fillets where the margins were in excess of 44% but not always; the Vietnamese margins the initial investigation in Shrimp were in the 6% range, i.e., near normal. Also, language in the Working Party Report provided other WTO Members with the option to bring countervailing duty actions against Vietnam (as with China) using methodologies different from those employed with regard to market economy nations.

This article begins with a discussion in Part II of the WTO requirements for applying NME methodology to WTO Members in both AD and CVD actions, as reflected in the Chinese and Vietnamese WTO accession arrangements.  Part III demonstrates that MNE treatment until 2016 for China and 2019 for Vietnam is not immutable, reflecting on actions of Mexico and Australia.  Part IV addresses U.S. MNE law and practice, focusing on the determination that Vietnam is a NME for antidumping actions in Frozen Fish Fillets.  Part V reviews the methodology used by the United States authorities in bringing CVD actions against China beginning in 2006.  Part VI addresses key aspects of the preliminary U.S. agency determinations – CVD, AD and injury—in PRCBs, with emphasis on the ground-breaking CVD analysis.  Part VII reviews a key CVD action against a market economy (Canada), Softwood Lumber, which has been challenged in the WTO’s Dispute Settlement Body, a case that blurs the distinction between ME and NME distinctions in U.S. CVD practice.   The article also discusses briefly the prospects for questioning the United States’ NME practices “as applied” in the Dispute Settlement Body11 of the World Trade Organization, as with recent Chinese challenges to U.S. and EU practices.

A caveat:  this article is based on the preliminary AD and CVD determinations in Polyethylene Retail Carrier Bags at Commerce, and the preliminary material injury determination at the USITC. The final determination in the AD action is not likely to result in major changes from the preliminary, given that adverse facts available will be the margin calculation in the final determination as well.  However, in the CVD and injury proceedings the final determinations could result in significant changes, particularly if Vietnamese interests decline to participate. In any event, the analysis of Commerce’s methodology is likely to remain relevant as a predictor of  methodology in the inevitable future CVD actions against Vietnam.