Practitioners and academics commenting on the application of the U.S. antidumping law to NMEs (and, in particular, on the use of economically comparable countries as surrogates) have tended to equate comparable per capita GDPs with comparable wages. The Department has examined this proposition, analyzing wage and per capita income data from past AD investigations and reviews involving nonmarket economy countries. The Department has concluded that while wages and per capita GDP are positively correlated, there is great variation in the wage rates of the market economy countries that the Department typically treats as being economically comparable. As a practical matter, this means that the result of a NME case can vary widely depending on which of several economically comparable countries is selected as the surrogate.

Section 351.408(c)(3) of the Department's current regulations sets forth a new methodology with respect to the valuation of the labor input in cases involving merchandise produced in non-market economy (NME) countries. Because of the variability of wage rates in countries with similar incomes, the methodology requires the use of a regression-based wage rate - essentially an average of the wage rates in market economy countries viewed as being economically comparable to the NME.

Since the implementation of this methodology, we have completed three updates of the wage rates, which have been made available to the public via the Enforcement and Compliance's (E&C) website and also at E&C's Central Records Unit. For previous updates, we utilized the wage and gross domestic product (GDP) data of at least 45 market economies collected from publicly available sources such as the International Labour Organization and the World Bank/International Monetary Fund. However, beginning with last year's update (May 2000), we chose to use per capita gross national product (GNP) instead of GDP. Accordingly, we are continuing this practice of using GNP per capita as the measure of national income to calculate the 1999 wage rates for valuing labor in NME proceedings. Please see the introduction to the May 2000 revision for further elaboration.