Nonmarket Nonsense: U.S. Antidumping Policy toward China

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It is impossible to talk about trade policy these days withoutthe conversation turning almost immediately to China. Since China'saccession to the World Trade Organization in December 2001,U.S.-China trade has increased by 91 percent to a whopping $231billion in 2004--a growth rate more than six times greater thanthat between the United States and the rest of the world.

Vested in the harmony of U.S.-China trade relations arecountless workers and consumers in both countries and investorsaround the world, who benefit from the burgeoning businessrelationships and supply chains that have evolved to wed thestrengths of both economies. The Bush administration seems torecognize this reality, and has thus far been a fairly adeptsteward of the relationship, choosing not to indulge everyprotectionist wish to thwart Chinese imports. But in stark contrastto its broader restraint in the face of anti-China protectionistpressure, the Bush administration has adopted an unabashedlybellicose approach to China with respect to antidumping policy.

Although the White House has little discretion to intervene andblock the imposition of antidumping duties--like it has insafeguards cases--it absolutely holds sway over the policydirection of the Department of Commerce. The administration shouldtake a hard look at its antidumping policy toward China,particularly the DOC's absurd nonmarket economy methodology, aswell as some dubious rules changes that the agency is considering.An honest assessment will lead to the conclusion that U.S.antidumping policy is undermining the otherwise laudable efforts ofthe administration to keep the U.S.-China trade relationship onsound footing.

Daniel J. Ikenson

Daniel Ikenson is a trade policy analyst with the Cato Institute's Center for Trade Policy Studies.