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Complaint by India.
On 3 August 1998, India requested
consultations with the EC in respect of Council Regulation (EC) No 2398/97
of 28 November 1997 on imports of cotton-type bed-linen from India. India
asserted that the EC initiated anti-dumping proceedings against imports of
cotton- type bed-linen from India by publishing a notice of initiation in
September 1996. Provisional anti-dumping duties were imposed by EC Council
Regulation No 1069/97 of 12 June 1997. This was followed by the imposition
of definitive duties in accordance with the above-mentioned EC Council
Regulation No 2398/97 of 28 November 1997. India contended that:
the determination of standing, the initiation, the
determination of dumping and injury as well as the explanations of the EC
authorities’ findings are inconsistent with WTO law.
the EC authorities’ establishment of the facts was not
proper and that the EC’s evaluation of facts was not unbiased and
the EC has not taken into account the special situation
of India as a developing country.
there were violations of Articles 2.2.2, 3.1, 3.2, 3.4,
3.5, 5.2, 5.3, 5.4, 5.8, 6, 12.2.2, and 15 of the Anti-Dumping Agreement,
and Articles I and VI of the GATT 1994.
On 7 September 1999, India requested the establishment of
a panel. At its meeting on 22 September 1999, the DSB deferred the
establishment of a panel.
Panel and Appellate Body proceedings
Further to a second request to establish a panel
by India, the DSB established a panel at its meeting on 27 October 1999.
Egypt, Japan and the US reserved their third-party rights. On 12 January
2000, India requested the Director-General to determine the composition of
the Panel. On 24 January 2000, the Panel was composed. The panel report
was circulated on 30 October 2000. The panel concluded that:
- the EC did not act inconsistently with its
obligations under Articles 2.2, 2.2.2, 3.1, 3.4, 3.5, 5.3, 5.4, and 12.2.2
of the AD Agreement in:
calculating the amount for profit in constructing normal
considering all imports from India (and Egypt and
Pakistan) as dumped in the analysis of injury caused by dumped imports;
considering information for producers comprising the
domestic industry but not among the sampled producers in analysing the
state of the industry;
examining the accuracy and adequacy of the evidence prior
establishing industry support for the application; and
providing public notice of its final determination.
- The panel, however, also concluded that the EC acted
inconsistently with its obligations under Articles 2.4.2, 3.4, and 15 of
the AD Agreement in:
determining the existence of margins of dumping on the
basis of a methodology incorporating the practice of zeroing;
failing to evaluate all relevant factors having a bearing
on the state of the domestic industry, and specifically all the factors
set forth in Article 3.4;
considering information for producers not part of the
domestic industry as defined by the investigating authority in analysing
the state of the industry; and
failing to explore possibilities of constructive remedies
before applying anti-dumping duties.
On 1 December 2000, the EC notified the DSB of its
intention to appeal certain issues of law covered in the Panel Report and
legal interpretations developed by the Panel. The Appellate Body
circulated its report on 1 March 2001. The Appellate Body:
upheld the finding of the Panel that the practice of
“zeroing” when establishing “the existence of margins of
dumping”, as applied by the EC in the anti-dumping investigation at
issue in this dispute, is inconsistent with Article 2.4.2 of the
reversed the findings of the Panel that:
the method for calculating amounts for administrative,
selling and general costs and profits provided for in Article
2.2.2(ii) of the Anti-Dumping Agreement may be applied where there is data
on administrative, selling and general costs
and profits for only one other exporter or producer; and
in calculating the amount for profits under Article
2.2.2(ii) of the Anti-Dumping Agreement, a Member may exclude sales by
other exporters or producers that are not made in the ordinary course of
as a consequence, concluded that the EC, in
calculating amounts for administrative, selling and general costs and
profits in the anti-dumping investigation at issue in this dispute, acted
inconsistently with Article 2.2.2(ii) of the Anti-Dumping Agreement.
The DSB adopted the Appellate Body report and the Panel
report, as modified by the Appellate Body report, on 12 March 2001.
Implementation of adopted reports
At the DSB meeting of 5 April 2001,
the EC announced its intention to implement the DSB’s recommendations in
this case and said that it would need a reasonable period of time to do
so. India said that the EC could complete its implementation process
within a very short period of time. On 26 April 2001, the parties to the
dispute notified the DSB that they had mutually agreed that the reasonable
period of time shall be five months and two days, that is from 12 March
2001 until 14 August 2001.
The EC amended its regulation imposing a definitive
anti-dumping duty on imports of cotton-type bed linen originating in
Egypt, India and Pakistan and suspending its application with regard to
imports originating in India by the deadline of 14 August 2001. However,
India, at the 23 August meeting of the DSB, made a statement whereby it
expressed the view that the new EC Regulation did not bring the EC
legislation into full compliance with the DSB’s recommendations.
On 13 September 2001, India and the EC informed the DSB
that they had reached an understanding regarding the procedures under
Articles 21 and 22 of the DSU. This understanding foresees that if on the
basis of the results of proceedings under Article 21.5 that might be
initiated by India, India decides to initiate proceedings under Article
22, the EC would not assert that India is precluded from doing so because
its request was made outside the 30 day time-period.
On 8 March 2002, India requested consultations under Article 21.5 of the DSU. On 4 April 2002, India requested the
establishment of a compliance panel. In particular, India claimed that the
EC had violated Articles 2, 3, 5.7, 6, 9, 12 and 15 of the Anti-Dumping
Accordingly, India requested the Panel to
The re-determination, as amended, and the
subsequent actions as identified above, are inconsistent with the
above provisions of the Anti-Dumping Agreement and GATT 1994; and
By failing to withdraw the measures found to be
inconsistent with the Anti-Dumping Agreement and to bring its measures
into conformity with its obligations under the Anti-Dumping Agreement
and GATT 1994, the EC has failed to comply with the DSB
recommendations and rulings in this dispute.
At the DSB meeting on 17 April 2002, India informed the
DSB that pursuant to an understanding reached between the EC and India, it
was requesting the withdrawal of the item from the agenda in accordance
with Rule 6 of the Rules of Procedure for WTO meetings. The DSB agreed to
On 7 May 2002, India again requested the establishment
of a compliance panel. At the DSB meeting on 22 May 2002, it was agreed
that, if possible, the matter would be referred to the original panel.
Japan and the United States reserved their third party rights to
participate in the proceedings. On 27 May 2002, Korea reserved its third
party rights. On 25 June 2002, the compliance panel was composed. On 19
August 2002, the Chairman of the Panel informed the DSB that it expected
to complete its work in November 2002. On 29 November 2002, the report was
circulated to Members. The Panel concluded that the EC’s definitive
anti-dumping measure on imports of bed linen from India, EC Regulation
1644/2001, is not inconsistent with the AD Agreement or the DSU and that,
therefore, the EC had implemented the recommendation of the original
Panel, the Appellate Body, and the DSB to bring its measure into
conformity with its obligations under the AD Agreement.
On 8 January 2003, India informed the DSB that it
intended to appeal certain issues of law and legal interpretations
developed by the Panel in its Report. On 6 March 2003, the Appellate Body
informed the DSB that it was not able to circulate its report within the
60-day deadline and that it intended to do so no later than 8 April 2003.
On 8 April 2003, the Appellate Body circulated its Report. The Appellate
- upheld the Panel’s finding that India’s claim under
Article 3.5 was not properly before the Panel and, consequently, declined
to rule on it,
- reversed the Panel’s finding that the EC did not
act inconsistently with paragraphs 1 and 2 of Article 3 of the
- declined to rule on the Panel’s finding that the EC
applied the second alternative in the second sentence of Article 6.10 for
limiting its examination in this investigation; and
- found that the Panel properly discharged its duties
under Article 17.6 of the Anti-Dumping Agreement and Article 11 of the DSU
and, therefore, upheld the Panel’s finding that the EC had information
before it on the relevant economic factors listed in Article 3.4 of the
Anti-Dumping Agreement when making its injury determination.
The Appellate Body recommended that the DSB request the
EC to bring its measure into conformity with the Anti-Dumping Agreement.
At its meeting on 24 April 2003, the DSB adopted the Appellate Body Report
and the Panel Report, as modified by the Appellate Body Report.
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