THE DRAGON’S EYE
Official
Publication of US-China Peoples Friendship Association, Chicago Chapter, www.uscpfa.org/chicago
Roger Noback, Chapter President and Editor,
630/762-8225, rogernoback@msn.com Nov.
18, 2007
Scheduled venue, time, topic, and activity for the USCPFA November
18, 2007 meeting
are 2-4 p.m. @ The
Trade
Sanctions Vs. China:
The
Sleeping “Countervailing Duty” Dragon Awakes Breathing Fire
(it’s a
Western style Dragon with big teeth)
Presented by
Thomas M. Keating, Esq., Partner, Hodes
Keating & Pilon
Anyone who wants to have a perspective on the future competitiveness of goods imported from China, and the future of the Chinese economy, should plan to attend this talk.
Countervailing duties may be assessed by the U.S. Commerce Department against goods exported to the U.S. by companies which receive impermissible subsidies from foreign governments, and such duties may be significantly higher than duties levied for other customs violations, such as “dumping” (exporting goods at price levels below price levels of the exporting country).
During the Cold War,
however, countervailing duties were not assessed against imports from
non-market, state-owned communist style countries, where the businesses of all
companies were in effect subsidized.
This had the effect of weaning such state-owned economies into
international trade with countries with free enterprise economies, and the
communist countries eventual adoption of more free market attributes. Since China had a state-owned economy during
such period, exports from China were accorded such treatment, and
countervailing duties were not assessed by the U.S. for subsidies by the
Chinese government to Chinese exporters.
That situation changed dramatically
with the decision in the Glossy Paper Case in March, 2007, when the U.S.
government ruled, for the first time, on a tentative basis, that imports into
the U.S. which were exported by companies in China which received impermissible
subsidies from the Chinese government, would have countervailing duties
assessed against such exports, with the countervailable subsidies ranging from
approximately 10-20%. A long list of
other U.S. companies have filed actions for the assessment of countervailing
duties against Chinese exports, and more have announced an intention to file
such cases. A final decision in the Glossy
Paper Case was originally expected to be handed down in November, 2007.
If the tentative decision in the Glossy
Paper Case is upheld and made final, such decision can be expected to have
significant and potentially severe effects on Chinese companies and their
exports to the U.S. through dramatic decreases in price competitiveness. Such result would risk being further
exacerbated by the argument that an artificially low currency also constitutes
an impermissible subsidy under Countervailing Duty principles.
The arguments of both sides and the
Glossy Paper case decision, and the possible application of WTO rules, will be
discussed in Tom’s talk.
BIO. Tom Keating has practiced Customs and International
Trade Law for over 20 years, and served as Chair of the Customs and
International Trade Law Committee of the Chicago Bar Association (and of the
International and Immigration Law Section Council of the Illinois State Bar
Association (1992-3). He is also past
President of the International Trade Club of Chicago (1994-5), the oldest
continuously operating international trade organization in the U.S., and remains on such organization’s board of
directors.
The Annual
China Symposium 2008 is presented by the USCPFA-Chi.Chap. on Sat., Jan. 26,
2008 and hosted in 2008 by the University of Chicago and its Center for East
Asian Studies at its International House. A SAVE THE DATE Announcement and Speakers
Chart is enclosed.
This month’s
talk continues our Chinese Economy and Business Series, which has included the following talks: Publicly Traded Stocks of
Chinese Companies in the US and China in June 2006 (just before the subsequent dramatic
increase in prices of such stocks) and the March 2007 talk on Chinese
Currency Appreciation and Stock Investments.
The regular monthly Chapter meeting includes a delicious
traditional Chinese multi-course meal (with informative table
conversation) from 2-3pm, and the hour long luncheon talk (with Q&A)
from 3-4 pm; and all this is only $15.
Please renew your membership for Calendar Year
2007 if you haven’t yet done so. CfaDE111807Draft2Emal