It seems that the battles the US took against China in the WTO has just turned into a full-blown trade war, with China returning the shots, for the first time (not counting the steel safeguard case in 2003) since it joined the WTO, by formally requesting consultations under the DSU with the US on its antidumping and countervailing measures against imports of coated papers from China today.
There are several things worth noting about this case:
1. For 23 years, the US has not applied the subsidy countervailing duty (CVD) laws against China, as China was not regarded as a market economy (I remember that there were discussions on this by the blog members earlier). Now that the US government has changed its stance, the CVD laws are going to have a huge impact on Chinese firms in other industries such as steel, plastics or textile. Actually the Chinese government tried to challenge the Commerce Dept. decision in the Court of International Trade earlier this year, so this is another latest addition to that saga.
2. If the US tries to apply both the antidumping and CVD duties against China, that would be a possible violation of Art. VI.5 of the GATT which says you cannot have two bites at the same apple.
3. The domestic CVD procedures in the US are taken at the same time as the US subsidy case against China. Thus there is a possibility that the US violated the prohibition on taking both the multilateral action (WTO dispute) and unilateral action (CVD) against the same subsidy.
This case would have far-reaching implications on China. I would be really interested to hear the comments from fellow blog members on this case.