On March 13, 2012, President Obama signed legislation that requires the U.S. countervailing duty (CVD) law to be applied to imports from any country designated as a non-market economy (NME) country. The legislation was introduced to overturn GPX International Tire Corporation v. United States, 666 F.3d 732 (Fed. Cir. 2011), a December 19, 2011, decision by the U.S. Court of Appeals for the Federal Circuit that held CVD remedies cannot be applied to imports from NME countries.
Significantly, the new law applies retroactively, covering all proceedings initiated on or after November 20, 2006. As a result, several CVD duty orders that the DOC had issued against various imports from China will remain in effect. Without the retroactive provision, the GPX decision would have appeared to invalidate all such CVD orders against imports from China.
Background
Until 2007, the U.S. Department of Commerce (DOC) had maintained that U.S. CVD law does not apply to imports from NME countries, based on the precedent of Georgetown Steel Corp. v. United States, 801 F.2d 1308) (Fed. Cir. 1986). Georgetown Steel held that government payments to a producer in a NME country do not constitute "countervailable subsidies" within the meaning of the CVD statute because the purpose of the CVD law is to "offset the unfair competitive advantage" that foreign producers enjoy from government subsidies, yet in an NME economy, the government itself owns or controls most businesses and assets and...
