Why the Chinese antidumping tariff was a strategy to enhance

competitiveness of domestic industry
The antidumping and anti-subsidiary laws are common sources of conflicts
between nations as they compete for shares in the international market.
However, some of these laws and policies are formulated out of perceived
cut throat competition that threats domestic producers. The World Trade
Organization (W.T.O.) intervenes in such situations to resolve the
conflicts from a neutral ground. The current study evaluates the
decision made by WTO on trade conflict between the United States and
China over chicken tariffs imposed by the government of China as
reported in the article “W.T.O. Backs U.S. Appeal on Chicken Tariffs
in China”. Based on decisions made by the W.T.O., it is evident that
China aimed at protecting its domestic producers of chicken products
from the stiff competition caused by the US chicken products using
antidumping and anti-subsidies laws as excuses.
The United States’ appeal against the decision made by the government
of China antidumping tariffs for chicken products exported by the United
States to China was raised in 2011 (The Associated Press 1). The
allegation made by China was based on two factors. First, chicken
products from the United States were sold at less the fair market price
as a result of subsidies issued by the government to producers based in
the United States. Secondly, producers of chicken products in the United
States took advantage of their low cost of production to dump chicken
products in China at low and unfair prices. Although the W.T.O. ruling
did not specify actions that China should take to reverse its prior
decisions on tariffs, it is clear that issuing subsidiaries are the
responsibility of the government that intends to enhance domestic
productivity and competitiveness of domestic products in the
international market.
Although the decision has been reached by the W.T.O., China still has an
opportunity for a successful appeal that can be fruitful on two
conditions specified in the W.T.O. on antidumping policy (World Trade
Organization 1). First, China should investigate the actual difference
in price of chicken products in the United States and China in order to
make a valid claim to the damping effect caused by the chicken products
from the United States on its economy. This is because W.T.O. allows
governments to prevent dumping, but to avoid giving favorable treatment
on domestic products compared to imports (W.T.O. 1). Secondly, the mere
calculation of the dumping in monetary values is not a sufficient
defense for imposing anti-dumping rules. The importing country (China in
this case) has to demonstrate the impact of dumping in its domestic
industry.
Failure on the part of the government of China to prove the two facts is
what W.T.O referred to as the responsibility of the government of China.
In addition, the organization made an unspecific rule of what China
should do because there is still an opportunity to support her
antidumping and anti-subsidy actions. China’s failure to prove the
existence of dumping and its impact on domestic industry creates a
perception that the two forms of tariff aimed at giving a competitive
advantage over local producers of chicken products. This implies that
the government of China should undertake an analysis that will reveal
all economic factors surround its dumping claim against the United State
instead of imposing tariffs on unfounded reasons. Moreover, China should
implement other measures to enhance competitiveness of domestic products
instead of relying on tariffs because antidumping rules last for five
years only.
References
The Associated Press. W.T.O. Backs appeal on chicken tariffs in China.
The New York Times. 2 August. 2013. Web. 7 November 2013.
World Trade Organization. Anti-dumping, subsidiaries, safeguards:
Contingencies, etc. World Trade Organization. 2013. Web. 7 November
2013.
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