After not applying countervailing duty (CVD) law against non-market economies (NMEs) for two decades, the United States opened a CVD investigation against China in 2006. After extensive litigation, a US appeals court ruled that it was illegal to apply CVD law to NMEs. While that ruling was being appealed, the US Congress passed legislation stipulating that the application of CVD law to NMEs starting in 2006 was legal. China challenged this legislation at the WTO. The dispute resulted in a ruling that left open the possibility that the legislation violated the GATT, as well as a finding that the United States must investigate its application of countervailing and antidumping duties against China. This dispute has implications for a number of current WTO debates including: whether Appellate Body rulings create a binding precedent, whether the Appellate Body should have authority to remand cases, and what information should be required in panel requests.
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