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DISPUTE SETTLEMENT: DISPUTE DS162

United States — Anti-Dumping Act of 1916

This summary has been prepared by the Secretariat under its own responsibility. The summary is for general information only and is not intended to affect the rights and obligations of Members.

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Appellate Body and Panel Reports Adopted

Complaint by Japan.

On 10 February 1999, Japan requested consultations with the US in respect of the US Anti-Dumping Act of 1916, 15 USC. 72 (1994), (“US 1916 Act”). Japan alleged that the US 1916 Act stipulates that the importation or sale of imported goods within the US market in certain circumstances is unlawful, constituting a criminal offence and inviting civil liability. Japan further alleged that judicial decisions under the US 1916 Act are made without the procedural safeguards provided for in the Anti-Dumping Agreement. Japan stated that a court action had been brought under the US 1916 Act against affiliates of Japanese companies. Japan contended that the US 1916 Act is inconsistent with Articles III, VI and XI of GATT 1994, and the Anti-Dumping Agreement.

On 3 June 1999, Japan requested the establishment of a panel. At its meeting on 16 June 1999, the DSB deferred the establishment of a panel. Further to a second request to establish a panel by Japan, the DSB established a panel at its meeting on 26 July 1999. The EC and India reserved their third-party rights. On 11 August 1999, the Panel was composed. The report of the panel was circulated to Members on 29 May 2000. The panel considered that Article VI:1 of GATT 1994 applies to any situation where a Member addresses the type of transnational price discrimination defined in that Article. The panel then found that, on the basis of the terms of the 1916 Act, its legislative history and its interpretation by US courts, the transnational price discrimination test found in the 1916 Act met the definition of Article VI:1 of GATT 1994. The panel next went on to find that:

• by providing for the imposition of treble damages, fines or imprisonment, instead of anti-dumping duties, the 1916 Act violated Article VI:2 of the GATT 1994 and Article 18.1 of the Anti-Dumping Agreement;
   
• by not providing for a number of procedural requirements found in Article VI:1 of the GATT 1994 and the Anti-Dumping Agreement, the 1916 Act violated Articles VI:1 of the GATT 1994 and Articles 1, 4.1, 5.1, 5.2, 5.4 and 18.1 of the Anti-Dumping Agreement; and
   
• by violating Articles VI:1 and VI:2 of the GATT 1994, and Articles 1, 4.1, 5.1, 5.2, 5.4 and 18.1 of the Anti-Dumping Agreement, the 1916 Act violated Article XVI:4 of the WTO Agreement and Article 18.4 of the Anti-Dumping Agreement.

On 29 May 2000, the US notified its intention to appeal certain issues of law and legal interpretations developed by the panel. The Appellate Body examined this appeal with that of WT/DS136. The Appellate Body report was circulated to Members on 28 August 2000. The Appellate Body upheld all of the findings and conclusions of the panel that were appealed.

The DSB adopted the Appellate Body report and the Panel report, as upheld by the Appellate Body report, on 26 September 2000.

Implementation Status of Adopted Reports

Complaints by the European Communities (WT/DS136) and Japan (WT/DS162).

At the DSB meeting of 23 October 2000, the US stated that it was its intention to implement the DSB’s recommendations and rulings. The US also stated that it would require a reasonable period of time for implementation and that it would consult with the EC and Japan on this matter. On 17 November 2000, the EC and Japan requested that the reasonable period of time be determined by arbitration pursuant to Article 21.3(c) of the DSU. The arbitrator circulated his report on 28 February 2001. He decided that the reasonable period of time in this case was 10 months and would thus expire on 26 July 2001. At its meeting on 24 July 2001, the DSB agreed to the US proposal to extend the reasonable period of time until 31 December 2001 or the end of the current session of the US Congress, whichever earlier. This extension had been agreed with the parties.

At the DSB meeting on 18 December 2001, the US informed that on 23 July 2001 it submitted proposed legislation to the US Congress repealing the 1916 Act and terminating all pending actions under the Act.. It added that, since the US Congress has not yet been adjourned, the US Administration continued to seek passage of the proposed legislation. Japan urged the US to complete the implementation within the reasonable period of time. However, in the event of non-compliance by the US, Japan will use its rights under Article 22 of the DSU. The EC also indicated that if the US would fail to comply with the DSB’s recommendations, it would have no choice, but to request the authorization to suspend concessions or other obligations under Article 22.2 of the DSU. On 7 January 2002, on the grounds that that the US had failed to bring its measures into conformity within the reasonable period of time, the EC and Japan requested authorisation to suspend concessions pursuant to Article 22.2 of the DSU. Both Members propose that the suspension of concessions takes the form of an equivalent legislation to the Anti-Dumping Act of 1916 against imports from the US. On 17 January 2002, the US objected to the levels of suspension of obligations proposed by the EC and Japan and requested the DSB to refer the matter to arbitration, in accordance with Article 22.6 of the DSU. The US claimed that the principles and procedures of Article 22.3 had not been followed by the EC and Japan. At the DSB meeting on 18 January 2002, the matter was referred to arbitration. During the meeting, the parties indicated that they were still engaged in consultations and would be requesting the arbitrators, once appointed, to suspend their work with a view to exploring the possibility of finding a mutually satisfactory solution. On 25 February 2002, the US submitted to the DSB a status report regarding implementation of the DSB recommendations and rulings. On 27 February 2002, the parties requested the arbitrator to suspend the arbitration proceeding noting that a proposal to repeal the 1916 Act and to terminate cases pending under the Act was being examined by the US Congress. The parties noted, however, that the arbitration proceeding could be reactivated at the request of either party after 30 June 2002 if no substantial progress would have been made in resolving the dispute by then.

At the DSB meeting on 17 April 2002, the US submitted its Status Report regarding implementation of the DSB recommendations and rulings. The US stated that a bill had already been introduced to repeal the 1916 Antidumping Act and terminate some pending cases. While acknowledging the progress made, the EC and Japan stressed the necessity for prompt compliance. Japan noted that under its bilateral agreement with the US, either party could re-activate the arbitration proceedings after 30 June 2002.

At the DSB meeting on 22 May 2002, the US submitted its status report regarding the implementation of the DSB recommendations and rulings. The US stated that on 23 April 2002 a bill had been introduced in the US Senate which would repeal the 1916 Act and apply to all pending court cases.

At the DSB meeting on 24 June 2002, the US submitted a status report where it stated that a bill had already been introduced in the US Congress to repeal the 1916 Anti-Dumping Act and to terminate some pending cases, and that it was continuing its efforts to find a mutually satisfactory solution to this dispute with the EC and Japan. The EC and Japan expressed concern about the lack of progress in this matter and urged the US to repeal the 1916 Act as soon as possible. Japan cautioned the US that it might reactivate arbitration proceedings if the 1916 Act was not repealed by 30 June. At the DSB meeting on 29 July 2002, the US reiterated the above statement. The EC and Japan expressed concern about the lack of progress in this matter and urged the United States to repeal the 1916 Act as soon as possible. They noted that proceedings against some of their companies might resume very soon and that it was imperative for swift action to be taken by the United States to prevent their companies from incurring huge expenses to defend themselves under legislation which had been found to be inconsistent with WTO rules

At the DSB meeting on 1 October 2002, the US submitted its status report and, in reference to the concerns expressed by the EC and Japan at the previous meetings of the DSB, stated that the bills currently before the Congress would repeal the 1916 Act and apply to all pending cases. The EC and Japan expressed concern about the lack of progress and indicated that swift action was imperative to prevent their companies from incurring huge expenses under WTO-inconsistent legislation.

At the DSB meeting on 11 November 2002, the US indicated that that the US Administration would continue to work with the US Congress following the Congressional recess to achieve further progress in resolving this dispute. The EC and Japan expressed concern about the lack of progress in this matter and urged the United States to repeal the 1916 Act without further delay. They noted that proceedings against some of their companies had resumed and that it was imperative for swift action to be taken by the US to prevent their companies from incurring huge expenses to defend themselves under legislation which had been found to be inconsistent with WTO rules. The EC said that the US status report was incomplete, as it did not mention the bill introduced by Representative Henry Hyde last June, which if adopted, would repeal the 1916 Act, but would not affect pending cases. For the EC, this would be unacceptable, as it would not fully comply with the recommendations and rulings of the DSB

At the DSB meeting on 28 November 2002, the US reiterated that the bills repealing the 1916 Act which had been introduced in the US Congress, would apply to all pending court cases. It further stated that the US Administration would continue to work with the US Congress after the Congressional recess to achieve further progress in resolving this dispute. The EC and Japan expressed concern about the lack of progress in this matter and urged the US to repeal the 1916 Act without further delay. They also reiterated their concern about the bill introduced by Representative Henry Hyde on June 2002, which if adopted, would repeal the 1916 Act, but would not affect pending cases. They noted that such a result would be unacceptable, as it would not fully comply with the recommendations and rulings of the DSB. At the DSB meeting on 27 January 2003, the US repeated its previous status reports and the EC and Japan reiterated their concerns.

Given that no legislation had been adopted to repeal the 1916 Act and to terminate the cases pending before the US courts, on 19 September 2003 the EC requested the Arbitrators to reactivate the arbitration proceeding in dispute WT/DS136. In accordance with the request from the EC, the Arbitrators resumed the arbitration proceeding on the same day.

In respect of the arbitration proceeding in dispute WT/DS136, on 24 February 2004 the decision by the Arbitrators was circulated to Members. In light of the fact that the nullification or impairment results from the 1916 Act “as such”, and not from particular instances of application of that law, the Arbitrators decided to set a number of parameters ((i) damages paid by EC companies as a result of judgements under the 1916 Act and (ii) amount of any settlement reached between an EC company and a US complainant pursuant to a 1916 Act complaint) with which the EC will have to comply when calculating by itself the amount of countermeasures it plans to impose, rather than setting a fixed value of trade which the EC should not exceed when suspending its WTO obligations against the US.

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