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Beijing Review Exclusive
Special> Coping With the Global Financial Crisis> Beijing Review Exclusive
UPDATED: October 16, 2009 NO. 42 OCTOBER 22, 2009
Protectionism Proliferates
The United States' investigation into imported Chinese seamless steel pipes intensifies trade frictions while damaging American consumer interests

If the anti-dumping and countervailing allegations continue to gain support, Chinese seamless steel pipes will be all but forced out of the U.S. market. Given the dismal international demand, the exporters are faced with fewer foreign market options, allowing bankruptcy to become a very real possibility.

The case will be settled around November 2 when the ITC votes on whether there is enough evidence for the case to proceed. If the ITC decides against Chinese imports, the U.S. Commerce Department will make its countervailing duties preliminary determination in December and its anti-dumping preliminary determination in February 2010.

Not just the U.S.

Against the backdrop of global financial crisis, trade protectionism has become an economic tactic of choice, as major exporters are held responsible for importers' economic slowdowns.

As the second largest export country, only after Germany, China has been victimized by the current round of protectionist actions, not from developed countries and regions like the European Union and the United States alone, but also from developing countries like India, Brazil and Argentina. Chinese products facing foreign accusations range from poultry, toys and shoes to iron and steel products, rubber products and auto parts.

The latest MOFCOM statistics show that from January to August, altogether 17 countries and regions launched 79 trade remedy investigations valued at over $100 billion against products imported from China. The number of investigations and the value involved rose 16.2 percent and 121.2 percent respectively year on year.

According to a World Trade Organization (WTO) mid-July prediction, the global GDP decline will give rise to an abuse in anti-dumping measures. The WTO said the number of global anti-dumping cases in 2009 would double that of 2008, and this year might witness the most anti-dumping cases in history.

How should China deal with the increasing protectionist actions? Mei Xinyu, a trade expert at the MOFCOM think tank, told Beijing Review, "We should seek cooperation through competition."

As a major trading power, China never wants to be involved in a battlefield where protectionism, instead of free trade, prevails. Mei said the previous ruthless cases have taught the Chinese a lesson that blind concession could only lead to more protectionist challenges for Chinese products.

"We must let our trade partners' citizens and protectionist forces realize the destruction to both sides resulting from protectionist actions," Mei said, adding that China must take a potent stance on counterstriking those actions.

Mei said China's anti-dumping and anti-subsidy probe into the U.S. auto and chicken products right after the U.S. decision to slap hefty duties of up to 35 percent on imports of Chinese tires is a remarkable event in its history of resolving trade disputes.

Many experts have advised Chinese businesspeople to take easy protectionist actions.

"At a time of global economic recession, the increase of trade frictions is inevitable and predictable," said Zhang Yansheng, Director of the International Economic Research Institute under the National Development and Reform Commission.

Recent Anti-dumping and Countervailing Investigations Into Chinese-Made Products

September 28: The U.S. International Trade Commission (ITC) announced its intention to launch a damage investigation into Chinese imported steel standard fasteners.

September 9: The Australian Customs and Border Protection Service announced plans to resume probes into Chinese imported carbon steel butt-welding pipe fittings. The probe was first launched on December 18, 2008.

August 24: The Canadian Border Service Agency filed an official anti-dumping and countervailing case to probe certain Chinese imported tubular goods.

July 29: A number of U.S. companies filed anti-dumping and countervailing probe applications to the ITC and the U.S. Commerce Department against magnesia carbon bricks imported from China.

July 9: The U.S. Berwick Offray filed a petition asking the United States to charge anti-dumping duties on narrow woven ribbons imported from the Chinese mainland and Taiwan.


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