Changing the Rules Mid-Game: The Compliance of the Amended EU Basic Anti-Dumping Regulation with WTO Law

Abstract

Giving effect to the expiration of section 15 of China’s Accession Protocol, the European Union amended the basic Anti-Dumping Regulation and removed the non-market economy treatment previously included in Article 2(7) of the Regulation. Instead, the EU introduced the new concept of ‘significant distortions’. In short, when a market is characterized by significant distortions as listed in Article 2(6) of the basic Regulation, the EU finds it inappropriate to base the calculation of the normal value on the prices resulting from such market. Accordingly, in that situation, the Commission will calculate the normal value on the basis of the prices or costs of a representative country, undistorted international prices, costs or benchmarks or domestic costs but only to the extent that they are not distorted. This new anti-dumping method gives rise to compatibility questions with WTO law, more specifically with Article 2.2, 2.2.1.1 and 2.4 of the Anti-Dumping Agreement. This article examines whether the amended basic Anti-Dumping Regulation violates the Anti-Dumping Agreement or whether the Anti-Dumping Agreement can be interpreted in accordance with the basic Regulation.