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January 12, 2007
Ms. Susan H.
Kuhbach
Senior Office Director for Import Administration
U.S. Department of Commerce – Room 1870
Central Records Unit
14th and Constitution Ave NW
Washington, DC 20230
Subject:
Application of Countervailing Duty Law to
Imports from the People’s Republic of China
Dear Ms. Kuhbach:
NCTO is pleased to offer comments on
the application of countervailing duty laws to
non-market economies such as China.
As the national trade association for the
U.S. textile industry, NCTO strongly supports
the application of countervailing duty laws to
China and other non-market economies.
As the largest
non-market economy in the world, China
subsidizes its industry to a greater extent than
any other country.
As a result, subsidies employed by the
Chinese government cause more harm to U.S.
industry and cause more U.S. workers to lose
their jobs than those of any other country.
A U.S. government policy that forbids
U.S. companies to seek redress against the
world’s principal perpetrator of subsidy injury
makes a mockery of fair play in trade policy.
For this reason alone, the policy should
be reversed.
The Commerce
proposition that any effort to unpeel subsidies
is technically impossible is puzzling.
Subsidies are created to give real and
tangible benefits to industries and it seems
amazing that the United States government
actually contends that it cannot arrive at a
defensible estimation of how much of a benefit a
particular subsidy may deliver.
The fact that every other developed
country says that they can unpeel these
subsidies from non-market economies makes such a
stand indefensible.
Such policies give the impression that,
from a U.S. government perspective, China can do
virtually anything and get away with it:
they are a significant reason that we
have a crisis of confidence in trade policy in
this country.
With China’s
accession to the WTO and the accompanying
requirements that it provide full and open
disclosure of its subsidy structures, the U.S.
government position is further weakened.
If China is not disclosing its subsidies,
as most experts agree, then the U.S. government
should discover them through an intensive
examination of China’s policies.
Such an examination is clearly within the
U.S. government’s capabilities, particularly
since subsidies are only effective if their
presence is communicated to the industries that
they are intended to benefit.
Chinese government subsidies in the form
of grants, low interest or no interest loans,
preferential tax rates, raw material and input
subsidies and the like all must be directed
somewhere and given the enormous size of China’s
manufacturing sector, it should not be difficult
to determine what these subsidies are.
In addition,
concerns that the Department lacks experience in
apply third-country methodology information in
calculating CVD rates should not prevent
Commerce from moving forward on CVD cases
against China.
Simply moving ahead will force Commerce
to develop experience and create methodologies
for applying CVD law.
Other concerns
that Commerce may lack clear authority to
implement CVD law against China or to take into
account double counting issues in regards to
dumping duties should not prevent Commerce from
taking the right step now by overturning an
indefensible policy.
Commerce should show leadership in
defense of unfair trade laws and of a
commonsensical interpretation of them.
Thank you for the
opportunity for NCTO to make its views known.
Sincerely,
Cass Johnson
President
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