Info Service on WTO and Trade Issues (Jan18/03)
24 January 2018
Third World Network
US given till 22 August 2018 to comply in AD dispute with China
Published in SUNS #8605 dated 23 January 2018
Geneva, 22 Jan (Kanaga Raja) - An Arbitrator at the World Trade Organisation
(WTO) has given the United States until 22 August 2018 to implement
the recommendations and rulings of the Dispute Settlement Body (DSB)
in a dispute over certain US methodologies and their application to
anti-dumping (AD) proceedings involving China.
In an award issued on 19 January, the Arbitrator determined that the
"reasonable period of time" for the US to implement the
DSB recommendations and rulings in the dispute is 15 months from the
date on which the DSB adopted the Panel and Appellate Body Reports
in this dispute on 22 May 2017.
Thus, the reasonable period of time for implementation will expire
on 22 August 2018.
According to the report by the Arbitrator (WT/DS471/RPT), the dispute
concerns China's challenge of certain methodologies used by the United
States in anti-dumping investigations.
The Panel found certain of the United States' measures at issue to
be inconsistent "as such" or "as applied" with
various provisions of the Agreement on Implementation of Article VI
of the General Agreement on Tariffs and Trade 1994 (Anti-Dumping Agreement)
and the General Agreement on Tariffs and Trade 1994 (GATT 1994).
These Panel findings were not appealed by the United States and, in
ruling on China's appeal, the Appellate Body did not make any additional
findings of inconsistency with the covered agreements.
At the meeting of the DSB on 19 June 2017, the United States indicated
its intention to implement the DSB's recommendations and rulings in
this dispute, and stated that it would need a reasonable period of
time in which to do so.
According to the WTO Arbitrator, the dispute underlying this arbitration
concerns China's challenge of certain methodologies and their use
by the USDOC (US Department of Commerce) in a number of anti-dumping
At the hearing, the parties accepted that the United States' implementing
obligations relate to the findings made by the Panel that are set
forth in paragraphs 8.1.a through 8.1.c of the Panel Report, and that
the measures at issue could generally be summarized as follows:
a. in respect of the Single Rate Presumption (SRP):
i. the USDOC's presumption that, in anti-dumping proceedings involving
a non-market economy (NME), exporters form part of an NME-wide entity
and are assigned a single anti-dumping duty rate unless each exporter
demonstrates, through the fulfilment of the criteria set out in the
"Separate Rate Test", an absence of de jure and de facto
governmental control of its export activities; and
ii. the USDOC's determinations to apply the SRP in the 38 anti-dumping
determinations challenged by China (namely, 13 original investigations
and 25 administrative reviews);
b. in respect of the weighted average-to-transaction (W-T) methodology
applied in three of the 38 anti-dumping determinations challenged
by China (namely, three original investigations):
i. the USDOC's determinations to apply the W-T methodology on the
-- its identification of a pattern of export prices which differ significantly
among different purchasers, regions or time periods; and
-- its explanation as to why such differences could not be taken into
account by the comparison methodologies that are normally to be used;
ii. the USDOC's application of the W-T methodology to all export transactions;
iii. the USDOC's use of zeroing under the W-T methodology; and
c. the USDOC's use of zeroing under the W-T methodology in one of
the 38 anti-dumping determinations challenged by China (namely, one
In ruling on the claims raised by China against these measures, the
a. the SRP to be inconsistent "as such" with Article 6.10
and Article 9.2 of the Anti-Dumping Agreement;
b. the United States to have acted inconsistently with Article 6.10
and Article 9.2 of the Anti-Dumping Agreement because the USDOC applied
the SRP in the 38 anti-dumping determinations challenged by China;
c. the United States to have acted inconsistently with Article 2.4.2
of the Anti-Dumping Agreement because of certain steps taken by the
USDOC in relation to the W-T methodology and its use of zeroing under
the W-T methodology in three original anti-dumping investigations;
d. the United States to have acted inconsistently with Article 2.4.2
of the Anti-Dumping Agreement and Article VI:2 of the GATT 1994 because
of the USDOC's use of zeroing under the W-T methodology in one administrative
Accordingly, said the Arbitrator, for purposes of this arbitration,
the United States' implementation obligations pertain to the recommendations
and rulings of the DSB with respect to one finding of "as such"
inconsistency pertaining to the SRP, as well as several findings of
"as applied" inconsistency pertaining to the USDOC's use
of the SRP in 38 anti-dumping determinations and the USDOC's use of
the W-T methodology, including its use of zeroing under that methodology,
in four of these 38 anti-dumping determinations.
According to the Arbitrator's report, the United States considers
that the Arbitrator should determine that 24 months is a reasonable
period of time for implementing the DSB's recommendations and rulings
in this dispute, due to "the number and magnitude of modifications
to the challenged measures, the procedural requirements under US law,
the complexity of the issues involved, and the current resource demands
and constraints on the USDOC".
The United States highlights "the breadth and complexity of the
DSB's recommendations", in particular in light of the "as
applied" findings, which relate to 38 anti-dumping determinations,
and "the significant additional analysis that the USDOC likely
will be required to undertake".
Regarding the chosen means of implementation, the United States intends
to undertake two distinct sets of proceedings: (i) one proceeding
pursuant to Section 123(g) of the Uruguay Round Agreements Act (URAA)
to address the "as such" recommendations and rulings of
the DSB pertaining to the SRP; and (ii) 38 separate proceedings pursuant
to Section 129(b) of the URAA to address the DSB's "as applied"
recommendations and rulings relating to the USDOC's use of the SRP
in 38 anti-dumping determinations, as well as its use of the W-T methodology,
and zeroing under that methodology, in certain of those determinations.
According to the United States, while these two sets of proceedings
must be undertaken sequentially, there can be "a small degree
of overlap" between them.
In particular, the United States proposes to commence the Section
129 proceedings once the preliminary determination in the Section
123 proceeding has been issued.
According to the Arbitrator, China does not question the USDOC's recourse
to proceedings under Section 123 and Section 129 of the URAA for purposes
of implementation in this dispute.
In particular, China does not question that a Section 123 proceeding
is an appropriate way to implement the DSB's "as such" recommendations
and rulings pertaining to the SRP.
Nor does China object to the degree of overlap between these proceedings
that the United States indicates would occur.
Rather, China accepts as reasonable the United States' proposal to
commence the proceedings pursuant to Section 129 once the preliminary
determination pursuant to Section 123 has been issued.
China nevertheless argues that the amount of time sought by the United
States, both for its Section 123 proceeding and for the multiple Section
129 proceedings, is "unreasonably long" in the circumstances
of this case.
In China's view, the United States' proposal for 24 months "far
exceeds what is reasonable under the circumstances" of this dispute,
and submits that a period of 6 months is a reasonable period of time
Following his analysis, the Arbitrator determined that the "reasonable
period of time" for the United States to implement the recommendations
and rulings of the DSB in this dispute is 15 months, from 22 May 2017,
that is, from the date on which the DSB adopted the Panel and Appellate
Body Reports in this dispute.
The reasonable period of time for implementation will expire on 22