This Trade Summary provides an overview of WTO dispute settlement decisions and panel activities, and EU decisions and measures on commercial policy, customs policy and external relations, for the third quarter of 2017.
On October 3, 2017, the EU Parliament, the Council, and the Commission reached an agreement on changes to the EU anti-dumping and anti-subsidy legislation. (See our previous posts on China’s status and the public consultation.) Concurrently, however, the 2013 Commission’s proposal on the Modernization of Trade Defense Instruments (covering inter alia amendments to the “lesser duty rule”) is still undergoing internal negotiations.
As the implementation of China’s first comprehensive cybersecurity law (the “CCL”) progresses, concern is mounting in the international business community regarding the law’s expansive scope, prescriptive requirements and lack of clarity on a range of critical issues. Vocalizing such concern, on September 25, 2017, the United States government asked China to halt its implementation of the CCL and highlighted potential issues with the CCL to members of the World Trade Organization. Since the CCL’s passage, several regulations have been released by the principal agency responsible for its implementation that were intended to implement the provisions of the CCL, but in some cases appear to have further expanded its scope while leaving some critical questions unanswered. In the face of such uncertainties, foreign companies operating in China are advised to familiarize themselves with the requirements of the CCL and its implementation rules and adopt measures to enhance their preparedness for the full implementation of the CCL.
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Fifteen years ago, China joined the World Trade Organization (“WTO”). To alleviate concerns of cheap Chinese goods flooding international markets at that time, China agreed to allow other WTO members to continue conducting their anti-dumping calculations in a special way, thereby recognizing the concerns of certain members that prices of Chinese goods could be distorted due to state interference. This methodology considered China as a “non-market economy” (“NME”). In a nutshell, this means other countries can disregard Chinese prices or costs, and can use “alternative methods” (external benchmarks, such as hypothetical costs of a third country) to determine the margin of dumping in an investigation. In doing so, authorities will typically end up levying higher anti-dumping duties on Chinese goods.
On March 30 – 31, 2017, Cleary Gottlieb hosted a conference on The Future of Trade Defence Instruments: Global Policy Trends and Legal Challenges. The event was jointly organized together with the University of Passau, the Europa-Institut Saarbrücken, the Institute of European and International Economic Law & the World Trade Institute – University of Berne.