DS: Canada — Anti-Dumping Measures on Imports of Certain Carbon Steel Welded Pipe from The Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu

This dispute concerned the anti-dumping measures imposed by Canada on certain CSWP from Chinese Taipei, as well as certain provisions of Canada's underlying legislation. Chinese Taipei brought a number of claims in respect of Canada's treatment of exporters with de minimis margins of dumping. Chinese Taipei also claimed that Canada had failed to undertake a non-attribution analysis in respect of the effect of subsidization of certain dumped imports and the effect of overcapacity in the domestic industry. Chinese Taipei also challenged the use of facts available for establishing the dumping margin and duty rate for imports from non-cooperating exporters from Chinese Taipei. Chinese Taipei pursued several claims concerning the imposition of anti-dumping duties on imports of new product types or models for which prospective normal values had not been established during the original investigation. Chinese Taipei's “as such” claims concerned certain provisions of Canada's anti-dumping legislation which relate to the treatment of exporters with de minimis margins of dumping.

Claims concerning the treatment of exporters with de minimis margins of dumping

Chinese Taipei claimed that, contrary to the second sentence of Article 5.8 of the Anti-Dumping Agreement, Canada had failed to immediately terminate the investigation in respect of Chinese Taipei exporters with final de minimis margins of dumping. The Panel considered that the term “margin of dumping” requires immediate termination of an investigation in respect of exporters that have individual de minimis margins of dumping, rather than in respect of country-wide margins of dumping that are de minimis. The Panel reached this conclusion for contextual considerations and for lack of cogent reasons to depart from the panel and Appellate Body findings in Mexico — Anti-Dumping Measures on Rice regarding the same issue. The Panel therefore upheld Chinese Taipei's claim.

Chinese Taipei also claimed that Canada had failed to comply with the requirement in the first sentence of Article 6.10 to determine a single margin of dumping for each known exporter when it based the de minimis test provided for in Article 5.8 on a country-wide margin of dumping. The Panel rejected this claim because it found that it lacked any factual and legal foundations.

Chinese Taipei claimed that Canada acted inconsistently with Article 7.1(ii) by imposing provisional measures on imports from a Chinese Taipei exporter with a preliminary margin of dumping below the de minimis threshold set forth in Article 5.8. The Panel considered that the term “dumping” in Article 7.1(ii) does not contain a de minimis element and therefore rejected Chinese Taipei's claim.

Chinese Taipei also contended that the imposition of provisional and definitive anti-dumping duties on imports from exporters with de minimis margins of dumping was inconsistent with Articles 1, 7.5, and 9.2 of the Anti-Dumping Agreement, and Article VI:2 of the GATT 1994. The Panel considered that, as a result of the obligation to immediately terminate the investigation pursuant to Article 5.8, it follows that exporters with final de minimis margins of dumping should not be treated as “sources found to be dumped” for the purpose of duty imposition under Article 9.2. With regard to the imposition of definitive anti-dumping measures, the Panel therefore upheld Chinese Taipei's claims under Article 9.2 of the Anti-Dumping Agreement, as well as under Article 1 of the Anti-Dumping Agreement and Article VI:2 of the GATT 1994. In light of its findings under Article 7.1(ii), the Panel considered that at the stage of its preliminary determination Canada was entitled to treat exporters with preliminary de minimis margins of dumping as “sources found to be dumped”. It thus rejected Chinese Taipei's claims under Article 7.5 of the Anti-Dumping Agreement, as well as under Article 1 of the Anti-Dumping Agreement and Article VI:2 of the GATT 1994.

Chinese Taipei challenged Canada's treatment of imports from Chinese Taipei exporters with final de minimis margins of dumping as “dumped imports” within the meaning of Article 3.1, 3.2, 3.4, 3.5 and 3.7 for the purpose of the determinations of injury and causation. The Panel upheld Chinese Taipei's claim. It found that as a result of the requirement to immediately terminate the investigation with respect to exporters with final de minimis margins of dumping, imports from such exporters should not be treated as “dumped” in the analysis and final determinations of injury and causation.

Claim regarding the non-attribution analysis

Chinese Taipei claimed that Canada had failed, contrary to Article 3.5, to conduct a non-attribution analysis in respect of the effect of subsidization of certain dumped imports from India as well as the effect of overcapacity in the domestic industry. The Panel rejected Chinese Taipei's claim. It found, on textual and contextual grounds, that there is no requirement under Article 3.5 to separate the effect of subsidization from the effect of the dumping. It also found that Chinese Taipei had not established that overcapacity was an injurious factor “known” to the Canadian investigating authority that should have been examined pursuant to the non-attribution requirement.

Claim regarding the use of facts available

Chinese Taipei challenged the way in which Canada used facts available for determining the dumping margin and duty rate for imports from non-cooperating exporters from Chinese Taipei, namely by relying on the highest transaction-specific amount of dumping for a cooperative exporter from any country subject to the investigation. The Panel upheld Chinese Taipei's claim. It found that Canada had applied facts available without undertaking a comparative evaluation and assessment of all the available facts on the record, contrary to Article 6.8 and Annex II, paragraph 7.

Claims concerning the imposition of anti-dumping duties on imports of new product types or models

Canada uses a prospective normal value system for imposing anti-dumping duties. Chinese Taipei pursued several claims concerning Canada's imposition of anti-dumping duties on imports of new product types or models from investigated and cooperative exporters from Chinese Taipei for which prospective normal values had not been established during the original investigation. In particular, Chinese Taipei challenged the imposition of these anti-dumping duties under Article 9.3 as in excess of those exporters' margins of dumping as established under Article 2. The Panel considered that the chapeau of Article 9.3 establishes a fundamental link between the amount of the anti-dumping duty imposed or collected in respect of a given exporter and a margin of dumping established for that exporter. By applying anti-dumping duties on imports of new product types or models for investigated and cooperative exporters on the basis of the residual duty rate established for “all other exporters”, rather than using the margins of dumping established during the investigation for the particular exporters at issue, or updating their margins of dumping, the Panel found Canada to have failed to preserve this fundamental link, thereby acting inconsistently with Article 9.3. The Panel thus upheld Chinese Taipei's claim. Chinese Taipei also claimed that Canada violated Article 6.8 and Annex II by resorting to facts available for the calculation of the duty rate for imports of new product models or types from cooperating Chinese Taipei exporters. The Panel upheld this claim because Canada had not applied facts available on the basis of the conditions set forth in Article 6.8 and Annex II. It also saw no basis for using facts available outside of those conditions. The Panel did not find it necessary to address additional claims by Chinese Taipei under Articles 2.2 and 6.10.

“As such” claims

Chinese Taipei also brought challenges against certain provisions of Canada's underlying anti-dumping legislation, the SIMA and SIMR, under Articles 1, 3.1, 3.2, 3.4, 3.5, 3.7, 5.8, 7.1(ii), 7.5, 9.2 and 18.4 of the Anti-Dumping Agreement, Articles VI and VI:2 of the GATT 1994, and Article XVI:4 of the Marrakesh Agreement. These “as such” claims concern the treatment of exporters with de minimis margins of dumping and mirror the corresponding “as applied” claims above. In particular, the Panel rejected Canada's contention that discretion existed under the SIMA to immediately terminate investigations in respect of exporters with de minimis margins of dumping, as required by Article 5.8 of the Anti-Dumping Agreement. As a result, Chinese Taipei's claims were upheld to the extent that they relate to the treatment of exporters with final de minimis margins of dumping, but rejected to the extent that they relate to the treatment of exporters with preliminary de minimis margins of dumping.