Rhodia Pharma Solutions is one of the world's leading manufacturers of specialty chemicals, including acetyl- salicylic acid (bulk aspirin). With corporate headquarters in France, it has about 25,000 employees in offices and manufacturing plants in the United States and throughout the world. In 1999, Rhodia filed a petition with the Department of Commerce (ITA) alleging that imports from the People's Republic of China (PRC) were being dumped in the United States for less than fair value. Based on industry information, Rhodia believed that their customers were paying less than half of Rhodia's price for the same product. No other firms joined the petition, and Rhodia was apparently the only producer of aspirin in the United States at the time. Rhodia's petition identified several potential Chinese exporters of bulk aspirin. Only two Chinese firms, Jilin and Shandong, responded to the petition. The ITA sent questionnaires to Jilin and Shandong and to the Chinese government, asking that it be forwarded to other Chinese producers. Jilin and Shandong responded with the price and market information requested by the ITA. No other Chinese firms responded. After an investigation, the agency issued this preliminary determination.
1. What are the special problems of determining the dumping margin of goods exported from an NME country?
2. What is the difference between de jure and de facto control by the government over Jilin and Shandong? Did either exist?
3. Why was the ITA using a surrogate country, India, to determine normal value?
4. What are the functions of U.S. AD duty laws? Explain.
5. While many U.S. jobs were unfortunately at stake in the proceedings, do you not see irony in the fact that U.S. laws were used to protect a French multinational (Rhodia) from low-cost dumping by a Chinese company, all while maintaining higher aspirin prices for American consumers?