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See also: One-page summary of key findings of this dispute
Complaint by Japan. (See also DS136)
On 10 February 1999, Japan requested consultations with the United States in respect of the US Anti-Dumping Act of 1916, 15 U.S.C. 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 the 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.
Panel and Appellate Body proceedings
Further to a second request to establish a panel by Japan, the DSB established a panel at its meeting on 26 July 1999. The European Communities and India reserved their third-party rights. On 11 August 1999, the panel was composed. On 2 February 2000 the Chairman of the panel informed the DSB pursuant to Article 12.9 of the DSU that due to administrative constraints the panel would not be able to issue its report within six months and that it expected to issue its final report to the parties in early April 2000. The panel report (with the exception of Sections III and IV, which were circulated on 25 September 2000) was circulated to Members on 29 May 2000. The panel considered that Article VI:1 of the 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 the 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 United States notified the DSB of its decision to appeal certain issues of law and legal interpretations developed by the panel. Japan also 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.
On 28 August 2000, the Appellate Body report was circulated to Members. The Appellate Body upheld all of the findings and conclusions of the panel that were appealed.
On 26 September 2000, the DSB adopted the Appellate Body report and the Panel report, as upheld by the Appellate Body report.
Reasonable period of time
At the DSB meeting of 23 October 2000, the United States informed the DSB that it intended to implement the DSB’s recommendations and rulings. The United States also stated that it would require a reasonable period of time for implementation and that it would consult with Japan on this matter. On 17 November 2000, 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 award 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. On 12 July 2001, the United States proposed that the reasonable period of time for implementation be extended until 31 December 2001 or the end of the current session of the US Congress, whichever was earlier and informed the DSB it would consult with Japan on this matter. Japan did not object to this proposal, which was agreed by the DSB at its meeting on 24 July 2001.
Proceedings under Article 22 of the DSU (remedies)
On 7 January 2002, on the grounds that that the United States had failed to bring its measures into conformity within the reasonable period of time, Japan requested authorization to suspend concessions pursuant to Article 22.2 of the DSU. Japan proposed that the suspension of concessions takes the form of an equivalent legislation to the Anti-Dumping Act of 1916 against imports from the United States. On 17 January 2002, the United States objected to the level of suspension of obligations proposed by Japan and requested the DSB to refer the matter to arbitration, in accordance with Article 22.6 of the DSU. At the DSB meeting on 18 January 2002, it was agreed that the matter raised by the United States be referred to arbitration . 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.
Implementation of adopted reports
At the DSB meeting on 26 November 2004, the United States reported that the US Congress had completed steps to repeal the 1916 Act, thereby implementing the DSB's recommendations and rulings. At the DSB meeting of 17 December 2004, the United States informed that on 3 December 2004, the US President had signed into law the Miscellaneous Trade and Technical Corrections Act of 2004. That Act included a provision that repealed the 1916 Act. United States reiterated its statement at the DSB November meeting that that action had brought the United States into compliance with the DSB's recommendations and rulings in this dispute.
At the DSB meeting on 19 July 2006, Japan referred to the pending litigation against the Japanese company which as a result of the ruling becoming final in June 2006, obliged that Japanese company to pay more than USD 35 million of treble damage plus attorneys' fees and costs of suit under the 1916 Anti-Dumping Act. Japan reiterated its call to the United States to take appropriate action in good faith to address Japan's concerns so as to achieve a satisfactory settlement of this matter. In response the United States confirmed that the legislation it adopted to repeal the 1916 Act had not affected this ongoing litigation and the court proceeding had revealed that the Japanese company in question had not only engaged in dumping, it had, in the words of the 1916 Act, done so with “the intent of destroying or injuring an industry in the United States”. As a result, the company's US competitor had been forced to close plants and to lay off employees during this period. Japan informed the DSB that he intended to convey the discussion at the present meeting to his capital and, if necessary, his delegation would revert to it.
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