Normal Value in Anti-Dumping Proceedings: Is Surrogate Value No Longer Applied Exceptionally?

Abstract

The WTO Anti-Dumping Agreement provides the general rule on the determination of normal value and the exception which allows investigating authorities to disregard the cost records reported by the respondents in anti-dumping proceedings provided that certain conditions are satisfied. This article visits the recent development of the practices of investigating authorities of the EU, the US and China, noting that the exception rule has been increasingly employed by these authorities that use surrogate values to replace actually incurred costs reported by respondents in different manners and as a result inflate the dumping margin. This article also examines the WTO consistency of these practices in view of the Appellate Body ruling in EU – Biodiesel. This article finds that these practices driven by strong policy considerations are arguably WTO-inconsistent as applied, and will encourage other WTO members to do the same. This tendency is very concerning.