Research On Anti-cirumvention Issues In The Context Of Anti-dumping

Text of this paper is divided into four parts:First, the origin, definition and legitimacy Comment of circumvention and anti-circumventionlegislation. Circumvention and anti-circumvention legislation are not from ancient times. They are theresult of development of international trade to a certain stage. It has been more than30years sinceelectronic products from Japan and South Korea suffered the anti-circumvention investigation from U.S.and Europe. Since the development of multinationals in1990s, circumvention has become more commonand anti-circumvention legislation has become more important. In short, the four main categories ofcircumvention are: assemble in importing countries, assemble a third country, Minor Alterations ofMerchandise and later-Developed Merchandise. The legitimacy of the anti-circumvention legislation hasbeen controversial, but Europe and the United States have been using it in practice in a long term.Second, the EU and the U.S. practice of anti-circumvention legislation. Europe and U.S. are thedeveloped countries in the traditional sense. They are also the major implementation country of nationalanti-circumvention legislation. American emphasis on efficiency of anti-circumvention legislation, theDepartment of Commerce enjoys greater powers under this system. U.S. did not only confirm the fourinternationally recognized categories of circumvention, but also the "downstream products" and "fictionnormal value " to circumvent the two forms were defined. In the regard of specific constituent elements ofcircumvention, the provisions are general. The concept “minor difference" leaves great room formaneuver in practice. European Union (including the previous EC) legislation in this area is moreconservative than the ones of United States. It is also more detailed, which established the four elementsrequired for an behavior to be “circumvention”: change in trade patterns, lack of reasonable grounds forthe change, weakening the anti-dumping remedies, existence of continuing dumping. The ratio of partsfrom the circumvention country and the total parts value has a clear upper limit (60%). Therefore, eventhe EU legislation is more restrict, it also provides more predictability. Compared the legislation betweenU.S. and EU, the latter is more conservative and the former is more concentrate on efficiency.Third, the effort WTO has made in terms of anti-circumvention. Despite the current internationalanti-circumvention has not form a unified international rules, this does not mean that WTO had not beenmade through the respective efforts. The “Dunkel Draft" from Uruguay Round, once included the relevantprovisions of proposed anti-circumvention. Elements such as relevance and necessity of circumvention helped defining “circumvention” with clear boundaries. But unfortunately, due to the disagreementbetween developed and developing countries, this provision is excluded from the final "Anti-DumpingAgreement". During the Doha Round, members are still discussing on anti-circumvention issues. But sofar, this discussion has not yet produced any binding result.Fourth, China faced harsh anti-circumvention situation and should prepare itself better to that.We have been the main victim of international anti-dumping, anti-subsidy, and anti-circumventioninvestigation. Therefore, the combination of China’s response to anti-circumvention is very important.Our anti-circumvention rules stay in the principle stage and lack of specific rules. This makes it a failureof the rules to deterrent on foreign imports. At the same time, such as paraffin candles case has reflectedout, our products in the international arena are often threatened anti-circumvention investigation. Toaddress this situation, the Chinese government, industry associations, companies and so should strengthentheir study to anti-circumvention investigation. On the one hand, we must strengthen the management andmarketing strategy setting to avoid dispatching the anti-circumvention nerve of EU and U.S.; On the otherhand, long term speaking, we must improve the technological content of products, to avoid the trap ofanti-dumping fundamentally.