DISPUTE SETTLEMENT: DISPUTE DS440

China — Anti-Dumping and Countervailing Duties on Certain Automobiles from the United States


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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Current status  back to top

 

Key facts  back to top

Short title:
Complainant:
Respondent:
Third Parties:
Agreements cited:
(as cited in request for consultations)
Request for Consultations received:
Panel Report circulated: 23 May 2014

  

Summary of the dispute to date  back to top

The summary below was up-to-date at

Consultations

Complaint by the United States

On 5 July 2012, the United States requested consultations with China with regard to Notice No. 20 [2011] and Notice No. 84 [2011] of the Ministry of Commerce of the People's Republic of China (“MOFCOM”) imposing anti-dumping and countervailing duties on certain automobiles from the United States, including any and all annexes.

The United States alleges that these measures appear to be inconsistent with:

  • Articles 1, 3.1, 3.2, 3.4, 3.5, 4.1, 5.3, 5.4, 6.2, 6.5.1, 6.8 (including Annex II, paragraph 1), 6.9, 12.2, and 12.2.2 of the Anti-Dumping Agreement;
     
  • Articles 10, 11.3, 11.4, 12.4.1, 12.7, 12.8, 15.1, 15.2, 15.4, 15.5, 16.1 22.3, and 22.5 of the SCM Agreement; and
     
  • Article VI of the GATT 1994. 

On 17 September 2012, the United States requested the establishment of a panel.  At its meeting on 28 September 2012, the DSB deferred the establishment of a panel.

 

Panel and Appellate Body proceedings

At its meeting on 23 October 2012, the DSB established a panel.  Colombia, the European Union, India, Japan, Korea, Oman, Saudi Arabia and Turkey reserved their third party rights.  On 1 February 2013, the United States requested the Director-General to determine the composition of the panel.  On 11 February 2013, the Director-General composed the panel. On 25 September 2013, the Chair of the panel informed the DSB that its expects to issue its final report to the parties by March 2014, in accordance with the timetable adopted after consultation with the parties.

On 23 May 2014, the panel report was circulated to Members.

Summary of key findings

This dispute involves claims by the United States regarding certain substantive and procedural aspects of the investigations that resulted in the imposition by China of anti-dumping and countervailing measures on certain automobiles from the United States with engine displacements equal to or greater than 2500 cubic centimetres (“cc”).

Regarding China's substantive obligations, the United States raised claims under Articles 3.1, 3.2, 3.5, 4.1, 6.8 and Annex II of the Anti-Dumping Agreement, and Articles 12.7, 15.1, 15.2, 15.5, and 16.1 of the SCM Agreement. The Panel found that MOFCOM erred in its determination of the residual anti-dumping and countervailing duty rates for unknown exporters of the subject product. The Panel thus concluded that these residual duty rates did not conform to the requirements of Article 6.8 and Annex II of the Anti-Dumping Agreement, and Article 12.7 of the SCM Agreement. The Panel also found a number of inconsistencies relating to MOFCOM's price effects and causation determinations, contrary to the requirements of Articles 3.1, 3.2 and 3.5 of the Anti-Dumping Agreement, and Articles 15.1, 15.2 and 15.5 of the SCM Agreement.

The Panel rejected the US claim that MOFCOM's definition of the domestic industry in the investigations at issue was inconsistent with Article 4.1 Anti-Dumping Agreement and Article 16.1 of the SCM Agreement.                                                                                                Regarding China's procedural obligations, the United States raised claims under Articles 6.5.1, 6.9, 12.2, and 12.2.2 of the Anti-Dumping Agreement, and Articles 12.4.1, 12.8, 22.3, and 22.5 of the SCM Agreement. The Panel found that MOFCOM erred in failing to provide interested parties with adequate non-confidential summaries of certain confidential information in the petition, contrary to the requirements of Article 6.5.1 of the Anti-Dumping Agreement and Article 12.4.1 of the SCM Agreement. The Panel also found that MOFCOM failed to disclose to US respondents the essential facts which formed the basis of its decision to impose definitive anti-dumping duties, as required under Article 6.9 of the Anti-Dumping Agreement.

The Panel rejected the US claims that MOFCOM's public notices failed to disclose the essential facts and findings and conclusions reached on all issues of fact and law considered material by MOFCOM in relation to the determination of the residual duty rates. Accordingly, the Panel found that the United States failed to establish that China acted inconsistently with Articles 6.9, 12.2, 12.2.2 of the Anti-Dumping Agreement, and Articles 12.8, 22.3 and 22.5 of the SCM Agreement.

As a consequence of these violations, the Panel also found that China acted inconsistently with the general obligation set forth in Article 1 of the Anti-Dumping Agreement and Article 10 of the SCM Agreement to conduct investigations consistently with the provisions of these Agreements.

On the basis of the above, and pursuant to Article 19.1 of the Dispute Settlement Understanding, the Panel recommended that the Dispute Settlement Body request China to bring its relevant measures into conformity with its obligations under the Anti-Dumping and SCM Agreements.

At its meeting on 18 June 2014, the DSB adopted the panel report.

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