Commercial Information Circulars

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Ref : EIC 111/3/10/2

22 March 2007

Dear Sirs,

Commercial Information Circular No. 135/2007

US : Anti-dumping Methodologies in Proceedings involving Non-Market Economy Countries: Surrogate Country Selection and Separate Rates

The US Department of Commerce (DoC) published a notice in the Federal Register (FR) on 21 March 2007 requesting comments on two aspects of its non-market economy (NME) methodology in anti-dumping (AD) proceedings. Interested parties are invited to submit comments to the DoC within 30 days, i.e. by 20 April 2007. A copy (pdf format) of the FR notice outlining the details is appended to this circular for reference. 

DETAILS

Surrogate Country Selection

1.  
2. In AD proceedings involving NMEs, the DoC calculates normal value of the merchandise concerned by valuing NME producer's factors of production, to the extent possible, using prices from a surrogate country, i.e. a market economy that is at a comparable level of economic development and that is also a significant producer of comparable merchandise. Currently, the DoC uses per capita income to measure economic comparability, and selects the most appropriate potential surrogate from a range of economically comparable countries based on their relative production of comparable merchandise and on whether they offer the data necessary to conduct the proceeding. The DoC is now seeking comments specifically on how it should determine which countries are economically comparable to a given NME, given the requirement to base the determination on per capita income. For example, at what point should differences in per capita income of a potential surrogate and the NME be "too large" for the two to be considered "economically comparable". The DoC is also soliciting comments on whether and on what basis it should disregard certain economically comparable countries as lacking data suitable for valuing the factors of production.

Separate Rates

3. In addition, the DoC presumes that all companies within an NME are subject to government control and should be assigned a single AD rate. However, an exporter can be assigned a separate rate if it demonstrates the absence of de jure and de facto government control over its export activities through a "separate rates" test. The test focuses on controls over the decision-making process on export-related investment, pricing, and output decisions at the individual firm level. Having regard to the administrative burden brought about by the increasing number of separate rates requests and the need to improve the effectiveness of the test, the DoC streamlined the application process for separate rates in April 2005, but did not alter the threshold of eligibility for a separate rate. Details of the simplified procedures are set out in our Commercial Information Circular No. 119/2005 dated 8 April 2005. The DoC is now seeking comments on the separate rates test as a whole and how its implementation could be further improved. Specifically, the DoC is interested to have public views on whether there is a need to consider alternatives to the current test and whether the administrative burden on both the DoC and interested parties in implementing the test can be reduced further.

ENQUIRY

4. For enquiries concerning the content of this circular, please contact the undersigned at 2398 5682.

Yours faithfully,

(Scott MAK)

for Director-General of Trade and Industry