UNCTAD has also used the State T rading Nations and Group D to differentiate a nonmarket economy from a m arket economy. Prior to their 1989-199 1 conversions to market-oriented policies, Group D consisted of the socialist countries of Eastern Europe participating in UNCTAD, excluding Rom ania and Yugoslavia (which were considered members of the Group of 77) and Albania (which did not activ ely participate in UNCTAD and other elements of the United Nations system). Group D countries showed a particular interest in the division of the UNCTAD Secret ariat concerned with “Trade between Countries with Different Econom ic Systems.”<sup>24</sup> However, today few countries have an absolute central planning system, and there are a number of ways to measure the market orientation of a transition economy.

**European Union.** In the Council Regulation (EC) No 905/98 of 27 April 1998,<sup>25</sup> the EU allows Chinese respondent enterprises to appl y for the status of m arket economy in antidumping investigations and stipulates five crit eria for determining the status of a market economy, namely:

(1) Decisions of fir ms regarding pri ces, costs and inputs, including for example, raw m aterials, cost of technology and labor, output, sales and investment, are made in response to market signals reflecting supply and demand, and without significant State interference in this regard, and costs of major inputs substantially reflect market values; (2) Firm s have one clear set of basic accounting records that are independently audited in line with international accounting standards and are applied for all purposes; (3) The production costs and financial si tuation of firms are not subject to significant distortions carried over from the former non-market economy system, in particular in relation to depreciation of assets, other write-offs, barter trade and payment via compensation of debts; (4) The firm s concerned are subject to bankruptcy and property laws which guarantee legal certainty and stability f or the operation of firms; and (5) Exchange rate conversions are carried out at the market rate.

**The United States.** From the adoption of the Antidum ping ACT of 1921 until the passage of the Trade Act of 1974, the appli cation of AD law to non- market economies was devised and im plemented exclusively through administrative agency action. In the 1960s, the United States Department of Treasury developed and used what was known as the “surrogate country” approach fo r applying AD law to non-m arket economies.<sup>26</sup> This approach was adopted and codified by C ongress in the Trade Act of 1974. Congress adopted also Treasury’s another m ethodology, known a s the “factors of production”

> 24 Ibid, see Group D.

> 25  OJL 128, 30.04.1998, p.18. Council Regulation (EC) No 905/98 of 27 April 1998, amending Regulation (EC) No 384/96 on protection against dumped imports from countries not members of the European Community.

> 26 At that time, the US Treasury Department was the agency with responsibility over domestic trade remedy laws until the passage of the Trade Agreement Act of 1979, which transferred administrative authority from Treasury to the Department of Commerce.

15