Speaking of export subsidies, the U.S. Department of Commerce has rejected an argument that China's currency undervaluation should be considered an export subsidy under U.S. countervailing duty law:
Regarding Petitioners’ allegation that China’s currency regime confers a de jure specific export subsidy, the cited foreign exchange rules provide an indication of the extent of the GOC’s control over foreign exchange transactions, but they do not show that any possible subsidy that results from the regime is contingent on exportation or anticipated exportation. On the contrary, there does not appear to be a basis for the claim that the currency regime of China is de jure specific to exporters. For example, the scope of the governing legislation clearly includes all businesses and individuals within the territory of the People’s Republic of China.4 Similarly, Petitioners’ allegation that China’s currency regime confers a de facto specific export subsidy is insufficiently supported because assistance to an industry as evidenced, for example, by Five-Year Plans, is not necessarily indicative of a subsidy contingent on exportation or anticipated exportation. Any firm or individual exchanging foreign currency for RMB would receive the subsidy allegedly conferred by China’s foreign currency regime, not just those industries included in the State’s industrial plans.
DOC's focus was very different than the export subsidies standards I mentioned in the last post. In part, that might be due to how the petitioners argued the point. Scott Lincicome has more here.
