US blocks China call for WTO to examine anti-subsidy duty law

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The US blocked China's request for a World Trade Organization inquiry into the legality of a law giving the Commerce Department authority to impose anti-subsidy or countervailing duties on non-market economies.

The law signed by President Barack Obama on March 13 permits the department to apply the levies retroactively to Nov. 20, 2006, on non-market economies such as China and Vietnam. In such economies, prices aren't set by the market, so the US uses prices in other nations, often India, to help determine when products are dumped, or sold at a discount to their fair value or cost in the home market.

The legislation overrode a 2011 ruling by the US Court of Appeals for the Federal Circuit in Washington after the Commerce Department imposed levies against China for subsidizing its tire industry. The department under the administration of George W. Bush reversed course on more than two decades of precedent and allowed both anti-dumping and countervailing duties against Chinese imports.

China is also challenging a provision of the same law that is designed to avoid "double counting" in cases where both countervailing and anti-dumping duties were imposed on Chinese goods including paper, steel, tires, magnets, chemicals, kitchen appliances, wood flooring and wind towers.

Anti-dumping duties apply to products sold overseas at or below the price in the home country. Countervailing duties aim to offset the benefits of government subsidies to industries.

The US won't be able to block a second Chinese request for WTO judges in Geneva to rule on the complaint.

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