2017 WTO Reports. Brussels, 26 October 2018

Transcription

1 2017 WTO Reports Brussels, 26 October

2 Overview of WTO Reports Number of Panel/AB Reports Per Year (TDI) Total AD CVD SFG TDI Reports

3 Overview of WTO Reports Number of Panel/AB Reports Per Year (TDI) Total AD CVD SFG TDI Reports

4 AD cases 2017 WTO Reports ØDS479: Russia Commercial Vehicles (EU) (Panel 27/01/2017) (AB 22/03/2018) ØDS483: China Cellulose Pulp (Canada) (Panel 25/04/2017) (not appealed) ØDS471: US Anti-Dumping Methodologies (China) (AB 11/05/2017) ØDS442: EU Fatty Alcohols (Indonesia) (AB 5/09/2017) ØDS488: US OCTG (Korea) (Panel 14/11/2017) (not appealed) CVD cases ØDS486: EU- PET (Pakistan) (Panel 28/5/2017) (AB 28/5/2018) AD/CVD cases ØDS491: US Coated Paper (Indonesia) (Panel 7/12/2017) (not appealed) Safeguards cases ØDS490, 496: Indonesia Iron or Steel Products (Chinese Taipei/Vietnam) (Panel 18/08/2017) (AB 15/08/2018) 4

5 AD cases 2017 WTO Reports ØDS479: Russia Commercial Vehicles (EU) (Panel 27/01/2017) (AB 22/03/2018) ØDS483: China Cellulose Pulp (Canada) (Panel 25/04/2017) (not appealed) ØDS471: US Anti-Dumping Methodologies (China) (AB 11/05/2017) ØDS442: EU Fatty Alcohols (Indonesia) (AB 5/09/2017) ØDS488: US OCTG (Korea) (Panel 14/11/2017) (not appealed) CVD cases ØDS486: EU- PET (Pakistan) (Panel 28/5/2017) (AB 28/5/2018) AD/CVD cases ØDS491: US Coated Paper (Indonesia) (Panel 7/12/2017) (not appealed) Safeguards cases ØDS490, 496: Indonesia Iron or Steel Products (Chinese Taipei/Vietnam) (Panel 18/08/2017) (AB 15/08/2018) 5

6 2017 Topics Dumping Article 2.2 ADA Normal Value Article 2.3 ADA Export Price Article 2.4 ADA Fair Comparison / Adjustments Article ADA W-T Methodology 6

7 2017 Topics Dumping Article 2.2 ADA Normal Value Article 2.3 ADA Export Price Injury Article 3.1 ADA Positive Evidence / Objective Assessment Article 3.2 ADA Volume / Price Effects Article 2.4 ADA Fair Comparison / Adjustments Article ADA W-T Methodology Article 3.4 ADA Material Injury Article 3.5 ADA Causation Articles 3.7 and 3.8 ADA Threat of Injury / Special Care 7

8 2017 Topics Dumping Injury Procedural Issues Article 2.2 ADA Normal Value Article 2.3 ADA Export Price Article 3.1 ADA Positive Evidence / Objective Assessment Article 3.2 ADA Volume / Price Effects Articles 6.2/6.4/6.9 ADA Access to File / Disclosure Article 6.7 ADA Verification Reports Article 2.4 ADA Fair Comparison / Adjustments Article 3.4 ADA Material Injury Articles 6.10/ ADA Limited Examination of Cooperating Exporters Article ADA W-T Methodology Article 3.5 ADA Causation Articles 3.7 and 3.8 ADA Threat of Injury / Special Care 8

9 2017 Topics Dumping Injury Procedural Issues Subsidies Article 2.2 ADA Normal Value Article 3.1 ADA Positive Evidence / Objective Assessment Articles 6.2/6.4/6.9 ADA Access to File / Disclosure Article 14(d) SCMA In-country Benchmark Article 2.3 ADA Export Price Article 3.2 ADA Volume / Price Effects Article 6.7 ADA Verification Reports Article 12.7 SCMA Facts Available Article 2.4 ADA Fair Comparison / Adjustments Article 3.4 ADA Material Injury Articles 6.10/ ADA Limited Examination of Cooperating Exporters Article 2.1 SCMA Specificity Article ADA Article 3.5 ADA W-T Methodology Causation Articles 3.7 and 3.8 ADA Threat of Injury / Special Care 9

10 2017 Topics Dumping Injury Procedural Issues Subsidies Other Article 2.2 ADA Normal Value Article 3.1 ADA Positive Evidence / Objective Assessment Articles 6.2/6.4/6.9 ADA Access to File / Disclosure Article 14(d) SCMA In-country Benchmark AFA Norm Article 2.3 ADA Export Price Article 3.2 ADA Volume / Price Effects Article 6.7 ADA Verification Reports Article 12.7 SCMA Facts Available Tie- Vote Article 2.4 ADA Fair Comparison / Adjustments Article 3.4 ADA Material Injury Articles 6.10/ ADA Limited Examination of Cooperating Exporters Article 2.1 SCMA Specificity Article ADA Article 3.5 ADA W-T Methodology Causation Articles 3.7 and 3.8 ADA Threat of Injury / Special Care 10

11 DS483 China Cellulose Pulp (Canada) This dispute concerns the anti-dumping duties (ranging from 13% to 23,7%) imposed by China on imports of cellulose pulp originating in Canada. Canada challenged MOFCOM's determination of injury as being inconsistent with Articles 3.1, 3.2, 3.4 and 3.5 of the ADA. 11

12 DS483 China Cellulose Pulp (Canada) Article 3.1 ADA (Determination of injury to be based on an objective assessment of positive evidence) Ø Not a self-standing claim (not in the abstract, but only in the context of the substance of the matter with respect to which the authority was considering and relying on that evidence ). Article 3.2 ADA ( Significant increase in the volume of dumped imports, in absolute or relative terms) Ø The inquiry as to the significance of any increase in dumped imports implies a consideration of developments, that is, changes or trends, in the volume of dumped imports over the period of the injury investigation. Ø Significant increase in absolute = whether the increase in dumped imports, if any, is important, notable or consequential (magnitude of that increase). Ø The consideration of whether there has been a significant increase in the volume of dumped imports under Article 3.2 does not require a duplicative analysis of causal linkages and other factors (which must be conducted pursuant to Article 3.5 ADA). Ø MOFCOM s determination OK since, even if there was no specific finding on significance, MOFCOMprovidedthe absolute andrelative figures. 12

13 DS483 China Cellulose Pulp (Canada) Article 3.2 ADA (Effect of the dumped imports on prices) MOFCOM found price depression in the context of parallel price trends between dumped imports and domestic like products. Yet, domestic prices were lower than import prices 13

14 DS483 China Cellulose Pulp (Canada) Article 3.2 ADA (Effect of the dumped imports on prices) While MOFCOM referred to the trends in volume and prices of the dumped imports and prices of the domestic like product, MOFCOM did not provide any explanation of how the prices and volume of the dumped imports interacted to have a depressing effect on domestic prices. It may be that one of the factors affecting domestic prices is competition with dumped imports, but the mere identification of such a parallel trend cannot alone suffice to show that the decline in the price of the domestic like product is an effect of the dumped imports. Price depression may be found in a situation where the prices of dumped imports is higher than the price of the domestic like product (China Autos). However, such a finding requires an explanation of how the investigating authorities reached a conclusion of price depression in a situation where the prices of dumped imports are higher during most of the POI (and more so when this issue was raised by interested parties). 14

15 DS483 China Cellulose Pulp (Canada) Article 3.2 ADA (Effect of the dumped imports on prices) Price depression need to be justified explanatory force on how imports depressed domestic prices in a situation where domestic prices were lower than import prices and both gained market share (China acted inconsistent with Articles 3.1 and 3.2 ADA) 15

16 DS483 China Cellulose Pulp (Canada) Article 3.4 ADA (Material Injury) This provision requires an investigating authority to examine the impact of the dumped imports on the domestic industry on the basis of an evaluation of all relevant economic factors and indices having a bearing on the state of the industry and the evaluation of the relevant factors must respect the overarching principle set out in Article 3.1 concerning the objective examination of positive evidence. There is no requirement that all relevant factors, or even a majority of them, reflect negative developments in order to point to an overall assessment of a negative impact on the relevant domestic industry. The provision requires an overall evaluation of the information and an explanation of how the facts considered by an investigating authority support itsassessment. 16

17 DS483 China Cellulose Pulp (Canada) Article 3.4 ADA (Material Injury) Concluded that Canada did not establish that MOFCOM acted inconsistently with AD Agreement Articles 3.1 and 3.4 in its examination of the impact of the dumped imports on the state of the domestic industry. Ø MOFCOM's evaluation of market share: Canada argued that MOFCOM's characterization of the domestic industry s market share (18%) as having remained low is not an objective evaluation of the facts. The Panel considered that the characterization of the domestic market share as "remained low" is not unreasonable in light of the fact that the demand for cellulose pulp had grown considerably, by 35.26% over the POI. Further, while production capacity was increased to meet the increased demand, the domestic industry's market share had notincreasedcommensurately. Ø MOFCOM s evaluation of injury factors showing positive trends: the Panel found that MOFCOM evaluated the mandatory economic factors and indices set forth in Article 3.4. In doing so, MOFCOM noted that some of the factors were negative and some were positive. MOFCOM further considered these factors and indices in its demonstration of the causation relationship between dumped imports and material injury. 17

18 DS483 China Cellulose Pulp (Canada) Article 3.5 ADA (Causation) The Panel concluded that China acted inconsistently with Articles 3.1 and 3.5 ADA with respect to MOFCOM's demonstration of a causal relationship between the dumped imports and injury: Ø Ø In light of its flawed price effects analysis and conclusions, the Panel concluded that MOFCOM failed to demonstrate that the dumped imports caused injury to the domestic industry through their price effects. Plus lack of sufficient explanation: the volume of imports increased but also demand for cellulose pulp in the Chinese market also increased in the same period. The market share of non-dumped imports, which were sold at prices close to those of the dumped imports, also increased but was not addressed by MOFCOM in the context of its demonstration of a causal relationship betweendumped imports andmaterial injury. MOFCOM failed to adequately examine other known factors also affecting domestic prices and the domestic industry (e.g. prices of cotton, domestic industry's overcapacity, overexpansion, and inventory build). 18

19 DS483 China Cellulose Pulp (Canada) Not appealed. 19

20 DS483 China Cellulose Pulp (Canada) Not appealed. Request for consultations under Article 21.5 DSU (September 2018) 20

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22 DS471 US Anti-Dumping Methodologies (China) This dispute concerns three issues relating to certain anti-dumping measures imposed by the USDOC: (1) The use of the weighted average-to-transaction (WA-T) methodology in dumping margin calculations (Article ADA) (2) The treatment of multiple companies as a non-market economy-wide entity (NME-wide entity) (3) The manner in which the USDOC determines anti-dumping duty rates for such an entity as well as the level of such duty rates (Use of the Adverse Facts Available AFA Norm) (Article 6.8 ADA) 22

23 DS471 US Anti-Dumping Methodologies (China) Article 2.4.2, second sentence, ADA: permits an investigating authority to use a methodology that compares a normal value established on a weighted average basis to prices of individual export transactions (WA-T) rather than establishing the existence of dumping margins on a weighted-average to weighted average (W-W) or transaction to transaction (T-T) basis. The asymmetrical comparison can be used if, first, "the authorities find a pattern of export prices which differ significantly among different purchasers, regions or time periods"; and, second, "an explanation is provided as to why such differences cannot be taken into account appropriately by the use of a weighted average-to-weighted average or transaction-to-transaction comparison. In other words, the second sentence of Article is an exception to the comparison methodologies in the first sentence and allows investigating authorities to "unmask targeted dumping" (Appellate Body Report, US Washing Machines (DS464), para. 5.16). 23

24 DS471 US Anti-Dumping Methodologies (China) Article 2.4.2, second sentence, ADA (as clarified by the AB in US Washing Machines) "Pattern : starting from the set of all export transactions attributable to an exporter, select for further consideration a sub-set, which must consist of all that exporter's transactions to a particular purchaser (as opposed to other purchasers) or to a particular region (as opposed to the remainder of the territory of the importing Member) or during a particular time period (as opposed to the remainder of the investigation period). For there to be a pattern, the export prices in the sub-set (considered as a whole) must be lower than the export prices outside the sub-set (considered as a whole). The WA-T comparison methodology may only be applied to the export transactions constituting the relevant pattern. The WA-T methodology cannot be applied to the export transactions that fall outside the sub-set constituting the pattern. All export transactions in the sub-set must be fully taken into account irrespective of whether they are above or below normal value. When combining intermediate results of comparisons between a weighted average normal value and individual export transactions, export transactions above normal value must be treated as having been made at the price at which they were actually made, and the results of such intermediate comparisons must not be set to zero before determining the dumped amount for the targeted sub-set as a whole (no zeroing). 24

25 DS471 US Anti-Dumping Methodologies (China) Howthe USDOC identified the pattern to unmask dumping? => Nails test: (1) the standard deviation test: aimed at finding a pattern of export prices which differed among different purchasers, regions or time periods (compared to the WA price); and (2) the price gap test: aimed at establishing whether the differences identified under the standard deviation test were significant (both applied on a model basis, with each model being assigned a control number (CONNUM), and then examined only those CONNUMs that were sold to both the alleged target and the non-targets purchasers/time periods). The USDOC established the existence of patterns of export prices which differed significantly among different purchasers in the Coated Paper investigation and among different time periods in the Steel Cylinders and OCTG investigations. The USDOC then evaluated the difference between the dumping margins calculated using the W-W methodology (without zeroing) and those calculated using the W-T methodology (with zeroing). The USDOC found differences in the dumping margins that showed that the W-W methodology concealed differences in price patterns between the targeted and non-targeted groups by averaging low-priced sales to the targeted group with high-priced sales to the non-targeted group. This was the reason provided by the USDOC in relation to its obligations under the explanation clause of Article ADA. As a result, the USDOC applied the W-T methodology to all export transactions of the Chinese exporters involved in the three challenged investigations using zeroing. 25

26 DS471 US Anti-Dumping Methodologies (China) Article 2.4.2, second sentence, ADA The Panel found that the US violated this provision by disregarding non-target prices below the alleged target price under the price gap test (=> the pattern clause of Article does not permit an investigating authority to conclude that the pattern of export prices to the alleged target differs significantly from those to non-targets by considering only the export prices to nontargeted purchasers or time periods which are higher than those to the alleged target ). The Panel also found that violations since the USDOC s justification to use the WA-T methodology was premised on the use of zeroing and because the USDOC had apply the WA-T methodology to all export transactions (not just the pattern). However, the Panel rejected China s claims with respect to certain alleged quantitative and qualitative issueswith the Nails test. [The issue of zeroing in WA-T was not appealed because of the AB had issued its report in US Washing Machines. Yet, the US comes again in DS534]. 26

27 DS471 US Anti-Dumping Methodologies (China) Article 2.4.2, second sentence,ada China took issue with how the USDOC identified a pattern, arguing that the standard deviation test assumed that export prices were normally or symmetrically distributed during theperiod concerned. The AB rejected China s claim: investigating authorities enjoy a margin of discretion regarding the methods or tools they wish to use in establishing the existence of a pattern. Yet, prices in the pattern need to differ significantly from the prices not in the pattern. The fact that a large number of export prices may fall below the one standard deviation threshold where the distribution of the export price data is not normal or single-peaked and symmetrical does not necessarily preclude an investigating authority from finding that the export prices to the "target" differ significantly from the other export prices and form a pattern within the meaning of the second sentence of Article ADA. 27

28 DS471 US Anti-Dumping Methodologies (China) Article 2.4.2, second sentence, ADA China also challenged the price gap test applied by the USDOC in the three challenged investigations in order to determine whether the differences identified under the standard deviation test were significant. The AB agreed with the Panel that China had not shown, as a matter of fact, that the USDOC s target price gap was based on prices located at the tail of the distribution of the export price data, whereas the weighted average non-target price gap was based on prices located nearer to the peak of that distribution. 28

29 DS471 US Anti-Dumping Methodologies (China) Article 2.4.2, second sentence, ADA China claimed that the Panel erred in its interpretation and application of Article 2.4.2, second sentence because it failed to recognize that investigating authorities are required to consider objective market factors in determining whether relevant pricing differences are significant. The AB rejected this qualitative analysis: IAs are not required to examine the reasons for the relevant price differences in export prices, or whether those differences are unconnected to targeted dumping, in order to assess whether export prices differ significantly. 29

30 DS471 US Anti-Dumping Methodologies (China) Article 6.8 and Annex II(7) ADA - Adverse Facts Available Norm ("AFA Norm") As such challenged of the AFA Norm by China. The AB found the existence of a general rule with prospective application, but did not complete the analysis. The Appellate Body explained that, to evaluate the conformity of the AFA norm with Article 6.8 and Annex II(7), it "would need to examine the process of reasoning and evaluation of all substantiated facts on the record adopted by the USDOC for its selection of which 'facts available' reasonably replace the missing 'necessary information.'" Here, it was "unable to evaluate the process that the USDOC undertakes for its selection of which 'facts available' reasonably replace the missing 'necessary information' with a view to arriving at an accurate determination." On this basis, the Appellate Body did "not accede to China's request" to complete the analysis in relation to whether the AFA Norm is inconsistent with Article 6.8 and Annex II(7). WARNING 30

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32 DS442 EU Fatty Alcohols (Indonesia) Indonesia challenged the imposition of anti-dumping duties by the EU on certain fatty alcohols. Claims under Articles 2.3/2.4, 3.1/3.5 and 6.7 ADA 32

33 DS442 EU Fatty Alcohols (Indonesia) Article 2.4 ADA (Adjustments) Article 2(10)(i) of the EU Basic Anti-Dumping Regulation (treatment of trading commissions in the calculation of dumping margins): An adjustment shall be made for differences in commissions paid in respect of the sales under consideration. The term commissions shall be understood to include the mark-up received by a trader of the product or the like product if the functions of such a trader are similar to those of an agent working on a commission basis. The EU authorities determined that a mark-up granted by an Indonesian producer of fatty alcohols (PT Musim Mas) to its related trader (ICOF-S) was a difference affecting prices and price comparability of the product under investigation ( = downward adjustment to the export price and compared it with the normal value to establish the dumping margin). Indonesia claimed that the EU authorities mischaracterized the mark-up as a trading commission rather than as a transfer of funds between PT Musim Mas and ICOF- S that is "simply an allocation, or shifting, of funds (profits) from 'one pocket to another'" within a single economic entity, and therefore adjusted the export price for a factor which did not affect price comparability (unfair comparison between the export price and the normal value inconsistent with Article 2.4 ADA + consequential claim under Article 2.3 ADA). 33

34 DS442 EU Fatty Alcohols (Indonesia) Article 2.4 ADA (Adjustments) The Panel disagreed with Indonesia s premise (i.e. that the existence of a single economic entity necessarily means that the payment of a mark-up between related entities can never affect price comparability) and concluded that Indonesia did not demonstrate that the EU authorities acted inconsistently with Article 2.4 by making an improper deduction for a factor that did not affect price comparability. The Panel found that, in examining the role of ICOF-S under the framework of Article 2(10)(i) of the EU Basic Anti-Dumping Regulation, the EU authorities relied on several evidentiary bases to arrive at their finding that ICOF-S had functions similar to an agent working on a commission basis. Moreover, the Panel considered that the EU authorities' explanations corroborated their finding that the mark-up paid by PT Musim Mas to ICOF- S represented a payment for which there was no corresponding pricing component on the domestic side. Accordingly, the Panel held that the EU authorities' explanations supported their finding that the mark-up constituted a difference affecting price comparability within the meaning of Article

35 DS442 EU Fatty Alcohols (Indonesia) The Appellate Body confirmed the Panel s findings: The text of Article 2.4 does not contain the words "single economic entity", nor does it contain any explicit reference to affiliations or relationships betweendifferententities. Yet, the nature and degree of affiliation between related companies is a relevant issue to determine whether any allowances should be made to ensure a fair comparison between the normal value and the export price. In the case at hand, the AB agreed with the Panel s assessment on whether or how the relationship between closely affiliated entities might affect the determination of priceadjustments. 35

36 DS442 EU Fatty Alcohols (Indonesia) Article 6.7 ADA (Verification Reports) The Commission failed to make available or disclose the results of the onthe-spot investigations on the premises of PT Musim Mas and its related companies. Disclosure of essential facts disclose or make available the results of theverification visit. Results" of the verification are connected to and informed by the questionsposed by theinvestigating authorities, theresponses thereto, the advance notice provided by the authorities to the investigated firm, and the additional evidence collected during the on-the-spot investigation. The firms to which the results of the investigation pertain must be accorded access to the results of the verification visits, regardless of whether information could or could not be verified (i.e., both the fact that the accuracy of information was confirmed and the fact that the accuracy ofinformation could not beconfirmed). 36

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38 DS488 US OCTG (Korea) This dispute concerned certain aspects of the final anti-dumping measure imposed by the United States on imports of oil country tubular goods (OCTG) from Korea. Claims under Articles 2 and 6 ADA 38

39 DS488 US OCTG (Korea) Article 2.2 ADA NV: Use of third-country export prices When there are no sales of the like product in the ordinary course of trade in the domestic market of the exporting country or when, because of the particular market situation or the low volume of the sales in the domestic market of the exporting country[*], such sales do not permit a proper comparison, the margin of dumping shall be determined by comparison with a comparable price of the like product when exported to an appropriate third country, provided that this price is representative, or with the cost of production in the country of origin plus a reasonable amount for administrative, selling and general costs and for profits. 39

40 DS488 US OCTG (Korea) Article 2.2 ADA NV: Use of third-country export prices Viability test : where domestic market sales cannot be used to determine normal value, third-country export sales of the foreign like product can be used for this purpose, subject to certain conditions. In particular, third-country export sales of the foreign like product can be used for determining normal value if such sales are 5% or more of the quantity or value of sales of the subject merchandise to or in the United States. The USDOC, after concluding that two Korean exporting producers did not meet this test, had constructed the normal value. Korea broughtan as such and as applied challenged. 40

41 DS488 US OCTG (Korea) The Panel rejected Korea s claims: Article 2.2 ADA in the alternative IAs have discretion to choose between third-country export prices OR constructed normal value. Establishing its own criteria to apply one or the other is not as such inconsistent with Article 2.2 ADA. Article 2.2 ADA does not impose any obligation on a Member to examine whether a respondent's third-country export prices are representative if it has opted to use constructed normal value to determinenormal value (no as applied violation either). 41

42 DS488 US OCTG (Korea) Article ADA Profit rates when constructing NV The USDOC constructed the normal value of the Korean exporting producers (cost of production). Yet, it used the profit data of a company outside Korea rather than the profit data of the Korean companies whose normal value was beingconstructed. Korea claimed that the USDOC's rejection of the profit data of the Korean respondents and its use of the profit data of the company outside Korea were inconsistent with Article ADA. 42

43 DS488 US OCTG (Korea) Article ADA Profit rates when constructing NV The Panel found that Article chapeau did not permit the USDOC to reject the actual data pertaining to the Korean respondents' domestic market sales of the like product in the period of investigation because these sales were made in low volumes. Even if low-volume sales can be discarded for the NV determination, the amount of profit and SG&A on those low-volume sales that are in the ordinary course of trade must be used. Thus, obligation to use the actual data (similar to DS473, EU Biodiesel (Argentina)). 43

44 DS488 US OCTG (Korea) Article ADA Profit rates when constructing NV Article 2.2.2(i) ADA provides for profit rate determination on the basis of the actual amounts incurred and realized by the exporter in question in respect of production and sales in the domestic market of the country of origin of the same general category of products. The same language also appears in Article 2.2.2(iii) ADA to calculate the profit cap. Thus, IAs must determine which products fall within the same general category of products. Korea challenged the USDOC's definition of the same general category of products in the underlying investigation, asserting that the USDOC's focus on down hole applications as the defining factor of products constituting the same general category of products as OCTG resulted in a definition that was narrower than the USDOC's definition of the foreign like product. The Panel found that scope of the same general category of products must be understood to be broader, not narrower than that of the like product, as defined by the investigating authority, so it concluded that the USDOC had infringed Articles 2.2.2(i) and (iii) ADA. 44

45 DS488 US OCTG (Korea) Article ADA Rejection of costs based on affiliation When constructing NV, obligation to use costs on the basis of records kept by the exporter or producer under investigation, provided that such records are in accordance with the generally accepted accounting principles of the exporting country and reasonably reflect the costs associated with the production and sale of the product under consideration. The USDOC rejected certain costs because the relationship of affiliation betweentheinput supplier andtheexporting producer. Question: Is an IA permitted to conclude that the exporter's records do not "reasonably reflect" the costs associated with production and sale of the product under consideration becauseofsuch affiliation? 45

46 DS488 US OCTG (Korea) Article ADA Rejection of costs based on affiliation The Panel noted that the key issue addressed in EU Biodiesel was whether the prices recorded in an exporter's records reflected arm's length prices. According to the Panel, when the transactions between the exporter and an associated or non-independent entity are found not to be at arm's length, the costs reflected in the exporter's records cannot be said to be accurate or reliable or suitably and sufficiently correspond to, i.e. reasonably reflect, the costs associated with production and sale of the product under consideration. The Panel found that the USDOC acted consistently with the ADA since it examined the differences in prices charged by the input supplier to unrelated parties. 46

47 DS488 US OCTG (Korea) Article 2.3 ADA Export Price In cases where there is no export price or where it appears to the authorities concerned that the export price is unreliable because of association or a compensatory arrangement between the exporter and the importer or a third party, the export price may be constructed ( ). Question: Does an IA have to further examine whether the export price is reliable in a situation where it has already found to be an association between two companies? Association = where an exporter and the importer or a third party do not act independently of one another. The Panel noted that, because of the association at issue, the investigating authority perceives the export price not to be trustworthy. Yet, the Panel reviewed the evidence showing that indeed the companies at issue were joined or united for a common purpose, thus finding that the export prices could have appeared unreliable. 47

48 DS488 US OCTG (Korea) Articles 6.2, 6.4 and 6.9 ADA Access to File + Disclosure Korea complaint against the USDOC s use of profit data from a company in a third country. The USDOC had rejected such data it is preliminary determination. At definitive stage, and after some submissions by the petitioner and other interested parties, the USDOC used such profit data when constructing NV. Korea argued that this late finding violated due process/rights of defence in Article 6 ADA. 48

49 DS488 US OCTG (Korea) Articles 6.2, 6.4 and 6.9 ADA Access to file + disclosure The Panel found no violation of Article 6.2 ADA because exporting producers provided their views on the use of such data. Even at the latest stage, when the petitioner had submitted the audited information of the third country company, exporting producers could have made more substantial rebuttals. The Panel found no violation of Article 6.4 ADA because the decision to accept such data is not the same as hiding the data from the record. The Panel found no violation of Article 6.9 ADA because the acceptance of such profit data is not an essential fact ( = consideration/reasoning with regard to such data). The profit data itself was disclosed. [Incidentally, Korea also brought arguments under Article ADA (failure to address arguments in the final determination) and Article X:3(a) GATT (different approach in other determinations) but 49 the Panel found noviolations].

50 DS488 US OCTG (Korea) Articles 6.10 and ADA Limited examination of cooperating exporters The USDOC only examined two exporting producers and rejected individual examination in view of (i) the complexities of the case, (ii) time constraints, and (iii) resources constraints (including the fact that there were other overlapping investigations). The Panel found that what triggers the limited examination under Article 6.10 is the large number of exporters institutional resource constraints and administrative burden OK as reasoning (like in DS405, EU Footwear (China)). Plus same reasoning could also serve to reject individual examination under Article ADA. 50

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52 DS491 US AD/CVD Coated Paper (Indonesia) This dispute concerns the anti-dumping and countervailing duties imposed by the United States on imports of certain coated paper from Indonesia, and Section 771(11)(B) of the Tariff Act of 1930 ( USITC s tie voting rule ). Claims under Articles 3.5, 3.7 and 3.8 ADA (threat on injury case) and Articles 14(d), 12.7 and 2.1 SCMA. 52

53 DS491 US AD/CVD Coated Paper (Indonesia) Article 3.5 ADA (Causation in the context of threat of injury) Indonesia argued that the non-attribution requirement can be disaggregated into three separate requirements: (a) non-attribution of injury caused by other factors to subject imports; (b) concrete examination of other factors using economic models or constructs (quantification); and (c) isolation of factors other than subject imports causing injury (i.e. identification of other factors affecting the domestic industry). The Panel rejected this: need to separate and distinguish the injurious effects of the other factors from the injurious effects of the subject imports plus satisfactory explanation of the nature and extent of those other factors. The Panel also noted that while it might, depending on the record information and circumstances, be useful to undertake a quantitative assessment of the impact of other factors, "there is no requirement that it do so," and "an adequately reasoned explanation of the qualitative effects of other factors based on the evidence before it will suffice. The Panel also found that, IAs should consider and address the likely future impact of such other factors. 53

54 DS491 US AD/CVD Coated Paper (Indonesia) Article 3.7 ADA (Threat of Injury) Indonesia claimed that the USITC had based its findings on conjecture and remote possibility (the USITC's affirmative threat of injury determination concluded that subject imports would gain market share at the expense of the domestic industry, and that subject imports would have adverse price effects on domestic prices). The Panel found that both (i) events that took place during the POI as well as (ii) other potential events provide the background against which an investigating authority can evaluate the likelihood of future events. Thus, any projection must be reasoned. The Panel also confirmed that there is no need to find negative price effects during the POI as a prerequisite for concluding that negative price effects will occur in theimminent future. 54

55 DS491 US AD/CVD Coated Paper (Indonesia) Article 3.8 ADA (Special care on threat of injury cases) The Panel did not add any additional obligation (to the one already include in Article 3.1 ADA) requiring IAs to resolve some issues in favour of the exporters (i.e. the projections merely require appropriate reasoning on an objective basis). On the USITC s tie-vote rule (i.e. in case of a draw in voting, there shall be a positive determination of injury), the Panel confirmed that Article 3.8 establishes no disciplines on Members' decision-making procedures in determining whether a domestic industry is threatened with injury and whether to apply measures. 55

56 DS491 US AD/CVD Coated Paper (Indonesia) Article 14(d) SCMA (Rejection of in-country prices as benchmarks to calculate benefit) Question: whether the USDOC improperly determined that the GOI's provision of standing timber (licenses) and logs (through an export ban on logs) conferred a benefit because it concluded that there were no marketbased prices in Indonesia for stumpage and as a result resorted to an outof-country benchmark. Facts: over 93% of timber harvested in the POI was from GOI land, and almost all (99%) of the forest land in Indonesia was owned by the GOI GOI s predominant supplier. Indonesia s claim: being the predominant suppliers is not enough to reject in-country private prices (need to show distortion). 56

57 DS491 US AD/CVD Coated Paper (Indonesia) Article 14(d) SCMA (Rejection of in-country prices as benchmarks to calculate benefit) The Panel found that the USDOC had not only based its determination on the GOI's market share; the USDOC had also considered certain features of the market for standing timber that rendered it distorted, namely the fact that the GOI administratively set the stumpage fees, the Indonesian ban on log exports, the negligible level of log imports and the "aberrationally low" prices of log imports into Indonesia relative to the surrounding region. The Panel confirmed in casu that the few import prices were not representative (less than 1% relative to domestic production, which made it likelythat import priceswould haveto matchthegovernment prices) and confirmed the use of exports from Malaysia to Indonesia (WTA database duly adjusted). 57

58 DS491 US AD/CVD Coated Paper (Indonesia) Article 12.7 SCMA (Facts Available) The USDOC had established subsidisation on the basis that there was a relationship of affiliation between a company purchasing the debts of an exporting producer. Such affiliation was inferred from the lack of cooperation of the GOI. Indonesia challenged the use of FA (both having recourse to FA as well as the information used). 58

59 DS491 US AD/CVD Coated Paper (Indonesia) Article 12.7 SCMA (Facts Available) The Panel found that the GOI failed to provide all the information sought by the USDOC, information in the sole possession of the GOI and which was necessary to determine whether there was an affiliation (the Panel dismissed Indonesia s attempt to invoke developing country s difficulties in providing therequested information). The Panel also agreed with the inference in this case from the GOI s lack of cooperation plus evidence on the file (newspapers and reports) suggesting the existence of the affiliation. The Panel noted that the answer to the question was binary ( yes/no affiliation) so that Article 12.7 SCMA does not require the authority to perform a comparative evaluation as there simply were not different facts for the USDOC to consider when drawing an inference. 59

60 DS491 US AD/CVD Coated Paper (Indonesia) Article 2.1 SCMA (De Facto Specificity) Article 2.1(c) SCMA states that a subsidy may be found de facto specific by looking at certain factors, such as the use of a subsidy programme by a limited numberof certain enterprises. Indonesia challenged the USDOC's de facto specificity determinations with respect to the three subsidies at issue in this dispute, i.e. the provision of standing timber, the log export ban, and the debt buy-back, arguing that they were inconsistent with Article 2.1(c) SCMA because, in each case, the USDOC failed to determine that the subsidies "were part of a plan or scheme intended to confer a benefit", i.e. a "subsidy programme". In the case of the provision of standing timber, the USDOC found that standing timber was provided by the GOI to 5 of 23 industry categories recognized by the GOI during the POI, including the paper industry. Based on this finding, the USDOC determined that the provision of stumpage was limited to a group of industries and therefore was specific. The USDOC made a similar determination with respect to the log export ban. Finally, the USDOC determined that the debt buy-back constituted a company-specific subsidy. 60

61 DS491 US AD/CVD Coated Paper (Indonesia) Article 2.1 SCMA (De Facto Specificity) The Panel found that the USDOC had identify sufficiently the existence of three subsidy programmes on the basis of the relevant documents > there was no need to identify whether the relevant laws or regulations governing the subsidy programme explicitly provide for both elements of the subsidy, i.e. a financial contribution conferring a benefit (only that the specific instance of its application amounted to a subsidy). 61

62 DS491 US AD/CVD Coated Paper (Indonesia) RESULT = The Panel found no violations. 62

63 Summary of 2017 Topics Dumping Injury Procedural Issues Subsidies Other Article 2.2 ADA Normal Value Article 3.1 ADA Positive Evidence / Objective Assessment Articles 6.2/6.4/6.9 ADA Access to File / Disclosure Article 14(d) SCMA In-country Benchmark AFA Norm Article 2.3 ADA Export Price Article 3.2 ADA Volume / Price Effects Article 6.7 ADA Verification Reports Article 12.7 SCMA Facts Available Tie- Vote Article 2.4 ADA Fair Comparison / Adjustments Article 3.4 ADA Material Injury Articles 6.10/ ADA Limited Examination of Cooperating Exporters Article 2.1 SCMA Specificity Article ADA Article 3.5 ADA W-T Methodology Causation Articles 3.7 and 3.8 ADA Threat of Injury / Special Care 63

64 Summary of 2017 Topics: Won/Lost (by the Defendant) Dumping Injury Procedural Issues Subsidies Other Article 2.2 ADA Normal Value (DS488) Article 3.1 ADA Positive Evidence / Objective Assessment (DS483) Articles 6.2/6.4/6.9 ADA Access to File / Disclosure) (DS488) Article 14(d) SCMA In-country Benchmark (DS491) (DS491) AFA Norm (DS471) Article 2.3 ADA Export Price (DS488) Article 3.2 ADA Volume / Price Effects (DS483) Article 6.7 ADA Verification Reports (DS442) Article 12.7 SCMA Facts Available (DS491) Tie-Vote (DS491) Article 2.4 ADA Fair Comparison / Adjustments (DS442) Article ADA W-T Methodology (DS471) Article 3.4 ADA Material Injury (DS483) Article 3.5 ADA Causation (DS491) (DS483) Articles 3.7 and 3.8 ADA Articles 6.10/ ADA Limited Examination of Cooperating Exporters (DS488) Article 2.1 SCMA Specificity (DS491) Threat of Injury / Special Care (DS491) 64