On April 17, 2018, Ministry of Commerce released Announcement No. 38 of 2018, preliminarily ruling that there is dumping of grain sorghum originating in the US, the domestic grain sorghum industry was substantially damaged, and there is a causal relationship between the dumping and the substantive damage. MOFCOM decided to launch provisional anti-dumping measures starting from April 19, 2018.
The head of MOFCOM Trade Remedy and Investigation Bureau Wang Hejun accepted media interview on this and answered the press’ questions.
1. MOFCOM announced the preliminary ruling on the anti-dumping investigation against the grain sorghum from the US just two months after the filing of the case, what is the special consideration? Recently, the trade dispute between China and the US attracted great attention, is this China’s counterattack to the US’ trade protection measures?
According to Article 30 of the Anti-dumping Regulation and Article 7.3 of the WTO’s Agreement on Anti-dumping, 60 days after the case filing, the investigation organization has the right to make preliminary ruling and take provisional measures. This case was filed on February 4, 2018 and the preliminary ruling was made on April 17, which is in accordance with Chinese laws and the WTO’s rules.
After the case was filed, the investigating organization conducted investigations through issuing questionnaires, listening to comments, visiting the main production areas of grain sorghum, and making an objective ruling. The preliminary investigation results showed that there was dumping of grain sorghum from the US on the Chinese market with great dumping margin, seriously impacting China's domestic grain sorghum market. The amount of US grain sorghum to China has increased dramatically from 317,000 tons in 2013 to 4.758 million tons in 2017, with a 14-fold increase. At the same time, the export price of the US grain sorghum's to China fell from US$290 per ton in 2013 to US$200 per ton in 2017, with a decrease of 31%. As a result, the price of Chinese grain sorghum declined, and China’s domestic grain sorghum industry was substantially damaged.
The US stakeholders can continue to participate in follow-up investigation procedures and express their opinions and concerns according to the Chinese laws and regulations and WTO rules. The investigation organization will protect the due process rights of all stakeholders according to the Chinese laws and regulations and the WTO rules strictly, conduct investigations openly and transparently, and make an objective and fair decision.
China always opposes the misuse of trade remedy measures and supports to launch trade remedy investigations according to the WTO rules and Chinese laws strictly. China is willing to cooperate with the US to reduce the disputes in trade and jointly protect the overall China-US economic and trade cooperation.
2. Why do the US companies all have the same dumping margin, which is very high?
After the case was filed, American companies did not provide a complete answer as is required. According to Article 21 of the Anti-dumping Regulation and Article 6.8 of the WTO's Agreement on Anti-Dumping, the investigation organization can make a ruling based on the facts available and the best information available. The investigation organization reviewed and analyzed the websites of the US Department of Agriculture and related agencies’ publicly acquired industry information, public publications and research reports, statistics of China Customs, etc., and calculated the US companies’ dumping margin based on available facts and best information. This practice is in line with the Chinese laws and the WTO rules and aims to correct unfair trade practices and maintain normal trade and competitive order.
3. MOFCOM announced both anti-dumping and countervailing investigations against the grain sorghum from the US on Feb 4th, but only the preliminary ruling of the anti-dumping investigation was announced this time, what is the reason？
On February 4, 2018, MOFCOM issued Announcement No.12 and Announcement No.13 of 2018, and decided to initiate anti-dumping and countervailing investigations on imported grain sorghum originating in the US. Anti-dumping and countervailing investigations are two cases with different procedures and subjects. For example, anti-dumping investigations aim at the price discrimination of related enterprises while countervailing investigations need to investigate the existence, amount and nature of the subsidies involved in the related country. Therefore, although the two cases involved the same product and were placed on file at the same time, the preliminary ruling time will vary according to its investigation progress. After the investigation agency completes the results of the preliminary countervailing investigations, it will issue a ruling in accordance with laws and regulations.
4. This case was self-initiated by MOFCOM, what is MOFCOM’s consideration when filing the case?
According to the relevant rules of the WTO, there are two situations for initiating an anti-dumping investigation. First, the investigation is applied by relevant industry. Second, the investigation is self-initiated by the investigation organization according to its own right. There are similar regulations in China’s relevant laws, and this is also true of other WTO members. Due to the low concentration of Chinese grain sorghum industry and the large number of growers, it is difficult for the industry to prepare necessary application documents. The responsible institution of the Chinese government initiated the investigations on its own against the grain sorghum from the US based on the preliminary evidence.