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DISPUTE SETTLEMENT: DISPUTE DS268

United States — Sunset Reviews of Anti-Dumping Measures on Oil Country Tubular Goods from Argentina

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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See also: One-page summary of key findings of this dispute

Appellate Body and Panel Compliance Reports (Article 21.5) Adopted

Complaint by Argentina.

On 26 January 2006, Argentina requested consultations under Article 21.5 of the DSU and paragraph 1 of the parties' Agreed Procedures under Articles 21 and 22 of the DSU. On 6 March 2006, Argentina requested the establishment of a panel under Article 21.5 of the DSU. At its meeting on 17 March 2006, the DSB referred the matter raised by Argentina to the original Panel. China, the European Communities, Japan and Mexico reserved their third-party rights. Subsequently, Korea reserved its third-party right. On 20 March 2006, the compliance panel was composed. On 16 June 2006, the Chairman of the Panel informed the DSB that it would not be able to complete its work within 90 days in light of scheduling conflicts and that it expected to complete its work in November 2006.

On 30 November 2006, the Article 21.5 panel report was circulated to Members. The Panel found that certain waiver provisions under the US Tariff Act of 1930 remain inconsistent with the rules governing sunset reviews found in Article 11.3 of the Anti-Dumping Agreement.  The Panel also found that the US Department of Commerce acted inconsistently with Article 11.3 of the Anti-Dumping Agreement in its determination of likelihood of continuation or recurrence of dumping for the purposes of its revised sunset determination in the Section 129 proceedings at issue. The Panel concluded that the US Department of Commerce did not act inconsistently with the relevant provisions of the Anti-Dumping Agreement in developing a new factual basis for its Section 129 determination, or in respect of certain evidentiary and procedural issues.

On 12 January 2007, the United States decided to appeal to the Appellate Body certain issues of law covered in the Article 21.5 panel report and certain legal interpretations developed by the Panel in this dispute. On 24 January 2007, Argentina decided to appeal to the Appellate Body certain issues of law covered in the Article 21.5 panel report and certain legal interpretations developed by the Panel in this dispute. On 6 March 2007, the Chairman of the Appellate Body informed the DSB that due to the time required for completion and translation of the report. the Appellate Body would not be able to circulate its report within the 60-day period. It estimated that the report would be circulated no later than 12 April 2007.

On 12 April 2007, the Appellate Body report was circulated to Members. The Appellate Body:

• reversed the Panel's finding that Section 751(c)(4)(B) of the Tariff Act, operating in conjunction with Section 751(c)(4)(A) of the Tariff Act and Section 351.218(d)(2) of the Regulations, is inconsistent with Article 11.3 of the Anti-Dumping Agreement; and in the light of this finding, did not consider it necessary to examine whether the Panel failed to make an objective assessment of the matter before it, as required by Article 11 of the DSU;
    
• upheld the Panel's finding that the USDOC's volume analysis was properly before the Panel;
    
• upheld the Panel's finding that the USDOC did not act inconsistently with the United States' obligations under Articles 11.3 and 11.4 of the Anti-Dumping Agreement by developing a new factual basis pertaining to the original review period for purposes of its Section 129 Determination; and found that the Panel did not fail to make an objective assessment of the matter before it, as required by Article 11 of the DSU, by considering certain provisions of the DSU as appropriate context; and
    
• rejected Argentina's claim that, in declining to make a suggestion pursuant to Article 19.1 of the DSU, the Panel did not properly fulfil its duties under Articles 11 and 112.7 of the DSU.

At its meeting on 11 May 2007, the DSB adopted the Article 21.5 Appellate Body report and Panel report, as modified by the Appellate Body report.

Appellate Body and Panel Reports Adopted

On 7 October 2002, Argentina requested consultations with the US regarding the final determinations of the US Department of Commerce (“DOC”) and the US International Trade Commission (“ITC”) in the sunset reviews of the anti-dumping duty order on OCTG from Argentina, issued on 7 November 2000 (65 Federal Register 66701) and June 2001 (USITC Pub. No. 3434), respectively, and the DOC’s determination to continue the anti-dumping duty order on OCTG from Argentina, issued on 25 July 2001 (66 Federal Register 38630).

Argentina considered that general US laws, regulations, policies and procedures related to the administration of sunset reviews and the application of anti-dumping measures were inconsistent either on their face or as applied with Articles 1, 2, 3, 5, 6, 11, 12, and 18 of the Anti-Dumping Agreement (ADA); Articles VI and X of the General Agreement on Tariffs and Trade (GATT) 1994; and Article XVI:4 of the WTO Agreement.

Furthermore, Argentina claimed that the sunset review conducted by the DOC is inconsistent with Articles 2, 5, 5.8, 11.3, 11.4, 12.1, and 12.3 of the ADA. It also claimed that the sunset review conducted by the ITC was inconsistent with Articles 3 and 11.3 of the ADA.

On 3 April 2003, Argentina requested the establishment of a panel. At its meeting on 15 April 2003, the DSB deferred the establishment of the panel. Further to a second request by Argentina, the DSB established a panel at its meeting on 19 May 2003. The EC, Japan, Korea, Mexico and Chinese Taipei reserved their third-party rights.

On 22 August 2003, Argentina requested the Director-General to compose the panel. On 4 September 2003, the Director-General composed the panel.

On 4 March 2004, the Chairman of the Panel informed the DSB that it would not be able to complete its work in six months in light of scheduling conflicts and that the Panel expected to complete its work in June 2004.

On 16 July 2004, the report of the Panel was circulated to Members. The Panel found that:

• Certain provisions of United States’ law regarding waivers in sunset reviews and certain provisions of the Sunset Policy Bulletin (SPB) concerning the DOC’s obligation to determine likelihood of continuation or recurrence of dumping in sunset reviews are inconsistent with the US obligations under certain provisions of the ADA. With respect to the DOC’s likelihood determinations in the OCTG sunset review, the Panel finds that the DOC acted inconsistently with certain provisions of the ADA, but did not act inconsistently with other provisions of that Agreement;
   
• The US law’s standard for the likelihood of continuation or recurrence of injury determinations in sunset reviews and the ITC’s determinations in the OCTG sunset review are not inconsistent with the relevant articles of the ADA.

On 31 August 2004, United States notified its intention to appeal certain issues of law and legal interpretations developed by the Panel. On 28 October 2004, the Chairman of the Appellate Body informed the DSB that the Appellate Body would not be able to circulate its Report within 60-day period due to the time required for completion and translation of the Report, and that the Appellate Body expected to complete its work no later than 29 November 2004.

On 29 November 2004, the Appellate Body Report was circulated to Members. The Appellate Body:

with respect to the issues appealed by the United States:

• upheld the Panel’s finding that Argentina’s challenges to certain provisions of United States law-namely, Sections 751(c) and 752(c) of the Tariff Act of 1930, the Statement of Administrative Action, and the Sunset Policy Bulletin-were set out with sufficient clarity in Argentina’s request for the establishment of a panel, as required by Article 6.2 of the DSU;
   
• upheld the Panel’s finding that the Sunset Policy Bulletin is a “measure” subject to WTO dispute settlement proceedings;
   
• found that the Panel did not meet its obligation under Article 11 of the DSU to “make an objective assessment of the matter before it”, with respect to the Panel’s analysis leading to its conclusion that the Sunset Policy Bulletin is inconsistent with Article 11.3 of the Anti-Dumping Agreement (governing reviews of anti-dumping duties after five years) because the Panel relied solely on overall statistics and did not appear to conduct a qualitative analysis of the cases filed in evidence. Consequently, the Appellate Body reversed this conclusion of the Panel;
   
• upheld the Panel’s finding that Section 751(c)(4)(B) of the Tariff Act of 1930 and Section 351.218(d)(2)(iii) of the USDOC Regulations-provisions that allow for parties to be considered to have waived their rights to participation in a sunset review proceeding under certain circumstances-are inconsistent with Article 11.3 of the Anti-Dumping Agreement because the USDOC’s determinations based on such waivers do not qualify as reasoned conclusions based on positive evidence;
   
• upheld the Panel’s finding that Section 351.218(d)(2)(iii) of the USDOC Regulations — a provision that allows for parties to be “deemed” to have waived their rights to participation in a sunset review proceeding under certain circumstances — is inconsistent with Articles 6.1 and 6.2 of the Anti-Dumping Agreement because the deemed waiver negates a party’s ample opportunity to present evidence and full opportunity to defend its interests as required by Article 6.1 and 6.2; and
   
• found that the Panel, in the course of arriving at its conclusions on waivers (points 4 and 5 above), did not fail to meet its obligations under Article 11 of the DSU to “make an objective assessment of the matter before it, including an objective assessment of the facts of the case”;

with respect to the issues appealed by Argentina:

• upheld the Panel’s finding that the disciplines in Article 3 of the Anti-Dumping Agreement regarding original determination of injury do not apply to investigating authorities when making determinations in sunset reviews. The Appellate Body further found that the Panel did not err in its interpretation of the term “injury” in Article 11.3 of the Anti-Dumping Agreement, or in its analysis with respect to the factors that must be considered by an investigating authority when making a determination in a sunset review;
   
• upheld the Panel’s finding that investigating authorities are not prohibited, by virtue of Article 11.3 of the Anti-Dumping Agreement, from “cumulating” the effects of likely dumped imports when determining whether injury to the domestic industry would be likely to continue or recur after termination of anti-dumping duties. The Appellate Body further upheld the Panel’s finding that the conditions applicable to such “cumulation” set out in Article 3.3 of the Anti-Dumping Agreement do not apply in the context of sunset reviews under Article 11.3;
   
• found that the Panel did not err in its interpretation of the term “likely” in Article 11.3 of the Anti-Dumping Agreement, and upheld the Panel’s finding that the determination made by the United States International Trade Commission (“USITC”), with respect to the likelihood of continuation or recurrence of injury to the domestic industry upon termination of anti-dumping duties, was not inconsistent with Article 11.3 of the Anti-Dumping Agreement;
   
• upheld the Panel’s finding that Sections 752(a)(1) and 752(a)(5) of the Tariff Act of 1930-which allow the USITC to consider the likelihood of injury recurring “within a reasonably foreseeable time”-are not inconsistent with Article 11.3 of the Anti-Dumping Agreement. The Appellate Body further upheld the Panel’s finding that the United States did not act inconsistently with Article 11.3 of the Anti-Dumping Agreement in the application of these provisions by the USITC in the sunset review determination underlying this dispute; and
   
• declined to rule on Argentina’s conditional appeal of two issues, one under the Anti-Dumping Agreement relating to the “practice” of the USODC in sunset reviews, and the other under the GATT 1994 relating to the administration of sunset review laws by the USDOC.

At its meeting on 17 December 2004, the DSB adopted the Appellate Body report and the Panel report, as modified by the Appellate Body report.

Implementation Status of Adopted Reports

At the DSB meeting on 14 January 2005, the United States stated that it was the intention of the US to implement the recommendations and rulings of the DSB in a manner that respected its WTO obligations, and that it would consult with Argentina to exploring the possibility of reaching an agreement on the reasonable period of time to implement the recommendations and rulings of the DSB. On 11 March 2005, Argentina requested the DSB that the reasonable period of time be determined through binding arbitration pursuant to Article 21.3(c) of the DSU, as Argentina and the United Stated were not able to reach an agreement. On 16 March 2005, Argentina and the United States informed the DSB that both parties had agreed the period of time for this binding arbitration shall be completed no later than 60 days after the date of the appointment of the arbitrator, as the 90-day period under Artcile 21.3 (c) was about to expire.

On 8 April 2005, Mr. A.V. Ganesan, Member of the Appellate Body, informed Argentina and the United States that he accepts the appointment to serve as arbitrator.

On 7 June 2005, the Award of the Arbitrator was circulated to Members. He determined that the reasonable period of time in this case is 12 months and would thus expire on 17 December 2005.

At the DSB meeting on 20 December 2005, the United States informed the DSB that it had implemented the DSB recommendations and rulings in this case. Argentina expressed doubts as to whether the US had fully implemented the DSB recommendations and rulings. On 5 January 2006, the parties informed the DSB of agreed procedures under Articles 21 and 22 of the DSU.

On 26 January 2006, Argentina requested consultations under Article 21.5 of the DSU. At its meeting on 17 March 2006, the DSB referred the matter raised by Argentina to the original panel. China, the European Communities, Japan and Mexico reserved their third-party rights. Subsequently, Korea reserved its third-party rights. On 20 March 2006, the compliance panel was composed.

For details of the Article 21.5 panel, see above.

On 21 May 2007, Argentina requested authorization from the DSB to suspend concessions pursuant to Article 22.2 of the DSU. On 1 June 2007, the United States requested, in accordance with Article 22.6 of the DSU, that the matter be referred to arbitration, since they objected to the level of suspension of concessions proposed by Argentina. At its meeting on 4 June 2007, the DSB decided to refer the matter to arbitration. On 21 June 2007, the parties jointly requested the arbitrator to suspend the Article 22.6 arbitration proceeding until either party subsequently requests its resumption. In accordance with the parties' joint request, the arbitrators suspended the arbitration proceeding, until either party subsequently requests its resumption. The arbitrators also took note of the parties' agreement that, if either party decides to request resumption of the arbitration proceedings, that party will provide the other party with 30 days' advance notice before making such a request.

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