Analysis of the EU Anti-dumping Cost-adjustment Method and China’s Response Strategy--Argentina v. European Union Anti-Dumping on Biodiesel as an Example

The cost-adjustment methodology is a special calculation methodology applied by the EU investigating authorities in the course of anti-dumping investigations under specific circumstances. One of the tasks of an anti-dumping investigation is to determine the existence of a dumping margin, to determine the margin of dumping, and then to determine the existence of dumping, which ultimately serves as the basis for the imposition of anti-dumping duties (Mokrov et al., 2016). The cost-adjustment methodology is highly similar to the “Surrogate Country System” for China, but in the case of the expiry of the provision, that is, there is no longer a legal basis for the provision and the negotiations of the provisions of the countries have not been fruitful. The EU put forward the concept of “distortion of the market”, that is, a third party as a reference to conduct the cost-adjusted of the exporter’s price, in order to adjust to the EU’s view of the “undistorted”; this is highly similar to the “Surrogate Country System” but slightly different (Chen, 2013). The scope is not limited to “non-market economies”, but market economies such as Russia are also discriminated against in this way. Cost-adjustment arrangements are often applied to raw materials such as energy, which are subject to strong government control and whose prices are not sufficiently free-market, and are therefore highly susceptible to successful application and thus to a finding of dumping (Long, 2024). However, the consequences of such arrangements can be extended to all downstream products or industries that use energy as a raw material, so the discussion of this issue is of great significance and value to China.