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Panels set in separate disputes against the United States

by Chakravarthi Raghavan

Geneva, 10 Sep 2001 - Three separate panels were set in disputes relating to the steel sector, raised by the European Communities against the US.

One dispute related to 12 countervailing duty orders on steel imports from several EU members (France, Italy, Germany, Spain, Sweden and the UK) by the US on the ground of subsidisation of the steel exported to the US from privatized steel companies.

In an earlier case brought by the EC against the US over such orders relating to a privatized British steel company, the Appellate Body of the WTO had held that the way the state contribution of the past to a previously state-owned company had been ‘carried’ over to the privatized company to calculate subsidisation was contrary to the WTO rules on subsidies and countervailing measures.

While agreeing to implement the ruling, the US has resisted EU pressures that the ruling should be applied to other similar cases.

The orders now raised as a dispute related to six orders imposed after the WTO, and involving original imposition of countervailing measures for subsidy. Two others relate to the so-called administrative reviews, and four in terms of the sunset review clause of the subsidies agreement.

Under Art.21.3 of the subsidies and countervailing measures agreement, countervailing duty orders are to be valid for 5 years and are to be terminated at the end of the period, unless a review is undertaken before the expiry of the 5-year period to determine whether the expiry of the duty would lead to continuation or recurrence of the subsidy.

A second complaint related to US imposition of countervailing duties on certain corrosion resistant carbon steel flat steel products from Germany, where the EC complaint was that the amount of countervailing duty (established before the WTO) was less than the 1% de minimis level, and hence could not be continued in terms of the sunset review clause provisions.

A third complaint, also involving the steel sector, related to the US safeguard measures against imports from Britain of circulated welded quality line pipe.

The original request also related to imports of steel wire rod, but this was not pressed, with the EC explaining that in view of the consultations being held, the panel need not look into this.

The US for its part objected to the EC complaint which, while listing several of the provisions of the Safeguards Agreement and of GATT 1994 which had been violated, said that the US actions was in breach of its obligations under the GATT 1994 and of the Safeguards Agreement “.... in particular, but not necessarily exclusively.”

This, the US said, could mean that the EC could expand its complaints of violations, at the hearing stage, beyond the particulars set out in the complaint.

A final dispute, by Canada and Mexico, related to the provisions of the US law, “Continued Dumping and Subsidy Offset Act of 2000,” under which the complainants in dumping and subsidy cases would be compensated out of the countervailing duties levied.

A similar complaint by nine co-complainants on the identical issue had been referred to a panel by the DSB at its last meeting. The separate complaints by Mexico and Canada were sent to the same panel.

In other issues, the US said it was going to implement the ruling against it in a case by Japan over anti-dumping measures on certain hot-rolled steel products from Japan. Japan said it had hoped that the United States would have automatically issued orders to its authorities not to use the methodology of calculations complained of. In any event, Japan said it was ready to enter into consultations with the United States over the reasonable period of time required. – SUNS4963

The above article first appeared in the South-North Development Monitor (SUNS) of which Chakravarthi Raghavan is the Chief Editor.

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