BEIJING (Reuters) - Beijing demanded on Saturday that the United States reverse its decision to slap anti-subsidy duties on imports of glossy paper from China.
"The Chinese side strongly demands the United States to reconsider this decision and correct it as soon as possible," Wang Xinpei, spokesman for the Commerce Ministry, said in a statement on the ministry Web site (www.mofcom.gov.cn).
U.S. Commerce Secretary Carlos Gutierrez announced on Friday a preliminary countervailing duty of 10.90 percent against Shandong Chenming Paper Holdings and 20.35 percent against Gold East Paper (Jiangsu) Co. in a case brought last year by NewPage Corp., a Dayton, Ohio, manufacturer.
A preliminary rate of 18.16 percent will apply to all other Chinese glossy paper exports. Commerce will make its final duty determination later this year. Until then, importers will be required to post bonds or deposit cash with the U.S. Customs Service, based on the preliminary duty levels.
"This action by the U.S. side goes against the consensus reached between leaders of the two countries to resolve contradictions through dialogue," Wang said.
He said China would closely watch developments and reserve the right to protect its legitimate interests and rights.
U.S. glossy paper imports from China rose to $224 million in 2006, from $29 million in 2004. NewPage is also seeking a nearly 100-percent anti-dumping duty against China.
Anti-dumping duties are imposed on goods sold below fair market value, even if no subsidies are involved.
The announcement put pressure on the U.S. dollar because of concern it represented a shift to more protectionist stance.
Anger over the U.S. trade deficit with China, which hit a record $233 billion last year, has spurred demands for a tougher response to Chinese government subsidies, which many U.S. lawmakers believe fuel that country's exports.
To do that required the Commerce Department to reverse -- so far just for China -- a policy that originated during the Cold War against applying countervailing duties on subsidized goods from "non-market" economies.
Commerce reasoned then that subsidies in those economies were too hard to measure, and state-controlled firms set export prices without regard to subsidies.
Gutierrez said the Bush administration still believed the best way to reduce the U.S. trade deficit was by increasing exports, not by reducing imports.
Democratic and Republican lawmakers welcomed the decision as long overdue, but said it would not stop Congress from passing legislation requiring the Commerce Department to apply countervailing duties to all non-market economies, which would include Vietnam.
NewPage's case asking for countervailing duties against China was the first since 1991, when the Commerce Department rejected two such requests.
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