The Peking government is being indoctrinated into the realities of Washington. An American company last June accused the People's Republic of China of violating this country's "antidumping" laws by selling, at less than fair value, natural menthol, which is used to flavor such products as toothpaste, cough drops and cigarettes. According to an offical of the Department of Commerce, the Chinese, having had a fling at trying to solve the situation themselves, finally hired a Washington lawyer to handle the case.
Commerce, itself, seems to be showing some respect for the diplomatic niceties and the fact that this is the first "dumping" case brought against the Chinese. According to the Oct. 8 Federal Register (page 66835), Commerce determined the case was so "extraordinarily complicated" that it decided to postpone any preliminary decision on the issue from Nov. 18 until sometime early next year.
The delay is justified, the Commerce notice said, because "in order to determine the appropriate measure of fair value, the Import Administration must analyze the nature of the Chinese economy in general and the agricultural sector in detail because natural menthol is a direct derivative of an agricultural product." Put more simply, menthol comes from peppermint oil, and without some study Commerce officials can't figure out what it may be costing the Chinese to produce it since theirs is a state-controlled economy where prices are difficult to determine.
What has been done in other "dumping" cases where communist countries have been involved, is that costs are taken from a comparable country with a free market economy and a hypothetical value then determined for the product. Commerce is now deciding what free market country should be used, "a sensitive question," in the words of one official.
Just in case you think that this is really big potatoes, it should be recorded that the People's Republic share of menthol sales went from $2.9 million in 1978 to $3.7 million last year. Someone just wants to keep them honest, it seems.