On October 26, 2017, the Department of Commerce announced the results of an investigation concluding that China is a non-market economy (“NME”) country for purposes of Commerce’s antidumping analysis. Commerce’s decision continues the long-standing practice of the agency with respect to the antidumping methodology it applies to cases involving China.
Commerce was spurred to review its position on China’s NME status, last addressed in 2006, following the December 11, 2016 change in China’s Protocol of Accession to the World Trade Organization (“WTO”). By way of background, the WTO Antidumping Agreement permits WTO member countries to impose duties on dumped imports. Those duties are calculated as either the difference between the imported product’s export price and the comparable home market price, or the difference between the export price and a constructed value based on the product’s cost of production. Sometimes, however, those home market prices or costs of production do not reflect market forces, particularly in NME countries.