Thanks to Henry for pointing us to China's opening statement at the European Union – Measures Related to Price Comparison Methodologies (DS516) panel meeting. Following up on the discussion in the comments on Henry's post, China is clearly taking this dispute very seriously, and says the following early on in its statement: "as promised by the entire membership 15 years ago, the European Union, as well as some other Members, must now end their so-called “analogue country” dumping calculation methodology that has been applied to Chinese exports for decades."
In support of the idea that promises were made 15 years ago, China offers a number of statements that were made at the time, including these:
In a press conference on 15 November 1999, the day when the United States and China signed the bilateral Agreement on Market Access, then United States Trade Representative Charlene Barshefsky stated, “[w]e certainly agree with China at that time, that these provisions should not exist in perpetuity, but we believed that they did need to exist for a reasonable period of time. With respect to the application of the “special anti-dumping” methodology, that provision will exist for 15 years”.
USTR Barshefsky: “... Fourth, guarantees of our right to use a special non-market economy dumping methodology for fifteen years, to ensure fair trade from China ...”.
Representative Feinstein: “... also preserves safeguards against dumping and other unfair trade practices, specifically, the special safeguard rule to prevent import surges into the United States will remain in force for twelve years, and the special anti-dumping methodology will remain in effect for fifteen years...”.
Senator Graham: “The agreement includes a provision recognizing the United States may employ special methods designed for non-market economies to counteract dumping for fifteen years after China’s accession to the World Trade Organization”.
Along the same lines, this is from then-USTR Charlene Barshefsky's Congressional testimony on China's WTO accession:
Non-Market Economy Dumping Methodology - China's WTO entry will guarantee our right to continue using our current "non-market economy" methodology in anti-dumping cases for fifteen years after China's accession to the WTO.
I'm curious about how the people negotiating these provisions actually understood what had been promised, but the details of what they were thinking probably won't be made public. Instead, we are left with the words they used. Let's parse those a bit now -- just for fun, not because I think they have some great legal relevance. (I'm going to focus on Barshefsky's comments, which probably matter more than the others).
Looking at Barshefsky's Congressional testimony, I think some people interpret this statement to mean that after 15 years, the U.S. must stop treating China as a non-market economy. But it looks to me like the statement may have been carefully worded to mean something else: After 15 years, the U.S. no longer has the right to impose its current methodology, but perhaps the U.S. can, after that period ends, develop a new NME methodology. I'm not saying this is the right legal (under WTO rules) or policy outcome, and I have no idea what a WTO panel will think of her statement. Nevertheless, putting "our current" rather than "a" in front of "non-market economy" looks intentional to me. Maybe they always had in mind shifting to a different NME methodology later?
On the other hand, in another statement, Barshefsky refers to "a special non-market economy dumping methodology." Perhaps that covers any such methodology, and thus after the 15 years the surrogate value approach has to be abandoned entirely?
In another instance, she refers to "the 'special anti-dumping' methodology." But note the rest of the statement: "that provision will exist for 15 years." The reference here is to expiration of the provision, rather than the methodology.
So that's what some U.S. government folks were saying at the time. China raised this before the WTO panel, and it will be interesting to see how the U.S. responds with regard to the meaning and relevance of these statements.