DISPUTE SETTLEMENT

DS: Korea — Anti-Dumping Duties on Pneumatic Valves from Japan

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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Key facts

 

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Summary of the dispute to date

The summary below was up-to-date at

Consultations

Complaint by Japan

On 15 March 2016, Japan requested consultations with Korea regarding measures imposing anti-dumping duties on valves for pneumatic transmission from Japan and the documents and factual information underlying the imposition of those duties.

Japan claims that the measures are inconsistent with:

  • Articles 1, 3.1,3.2,3.4, 3.5, 4.1, 6.5, 6.5.1, 6.9, 12.2 and 12.2.2 of the Anti-Dumping Agreement; and
     
  • Article VI of the GATT 1994.

On 9 June 2016, Japan requested the establishment of a panel. At its meeting on 22 June 2016, the DSB deferred the establishment of a panel.

 

Panel and Appellate Body proceedings

At its meeting on 4 July 2016, the DSB established a panel. Brazil, Canada, China, Ecuador, the European Union, Norway, Singapore, Turkey, the United States and Viet Nam reserved their third-party rights. On 22 August 2016, Japan requested the Director-General to compose the panel. On 29 August 2016, the Director-General composed the panel.

On 7 March 2017, the Chair of the panel informed the DSB that, after consultation with the parties, the panel expected to issue its final report to the parties in the second half of 2017.

On 12 April 2018, the panel report was circulated to Members.

This dispute concerns anti-dumping duties imposed by Korea on imports of valves for pneumatic transmissions (pneumatic valves) originating from Japan, as described in the Resolution of Final Determination on Dumping and Injury to Domestic Industry of Valves for Pneumatic Transmissions from Japan adopted by the Korea Trade Commission (KTC) (Final Resolution) and the Report by the KTC's Office of Trade Investigation (OTI) (Final Report), both dated 20 January 2015.

At issue is the Korean investigating authorities' definition of the domestic industry, the Korean's investigating authorities' analysis of a significant increase of the imports under investigation, the effect of the imports under investigation on prices in the domestic market for like products, the impact of the imports under investigation on the domestic industry, and the Korean investigating authorities' demonstration of causation. Japan also challenged certain procedural aspects of the underlying investigation concerning the confidential treatment of information, the provision of non-confidential summaries of information treated as confidential, the disclosure of essential facts, and the provision in sufficient detail of the findings and conclusions reached.

TERMS OF REFERENCE

The Panel found that the following claims were not within its terms of reference because Japan's panel request failed to provide a brief summary of the legal basis of the complaint which was sufficient to present the problem clearly:

  1. Japan's claim under Articles 3.1 and 4.1 of the Anti-Dumping Agreement, concerning the definition of the domestic industry;
  2. Japan's claim under Articles 3.1 and 3.2 of the Anti-Dumping Agreement, concerning Korea's analysis of an increase in the volume of the dumped imports;
  3. Japan's claim under Articles 3.1 and 3.2 of the Anti-Dumping Agreement, concerning the consideration of the effect of the dumped imports on prices;
  4. Japan's claim under Articles 3.1 and 3.4 of the Anti-Dumping Agreement concerning the impact of the dumped import on the state of the domestic industry, with the exception of the allegations that the Korean Investigating Authorities failed to evaluate two of the specific factors listed in Article 3.4 (the ability to raise capital or investments and the magnitude of the margin of dumping);
  5. Japan's claim under Articles 3.1 and 3.5 of the Anti-Dumping Agreement, concerning the alleged failure by the Korean Investigating Authorities to consider adequately all known factors other than the dumped imports that were injuring the domestic industry at the same time, with the exception of the allegations concerning whether the Korean Investigating Authorities considered certain known factors in isolation and dismissed them without an adequate examination;
  6. Japan's claim under Article 6.9 of the Anti-Dumping Agreement, concerning the alleged failure by the Korean Investigating Authorities to inform interested parties of essential facts which formed the basis for the decision to impose definitive anti-dumping measures;
  7. Japan's claims under Articles 12.2 and 12.2.2 of the Anti-Dumping Agreement, concerning the alleged failure by the Korean Investigating Authorities to give proper public notice of their final determination; and
  8. Japan's consequential claim under Article VI of the GATT 1994.

The Panel found that the remaining claims were properly within its terms of reference.

Key Findings

Claims concerning the state of the domestic industry

The Panel found that Japan's did not demonstrate that the Korean Investigating Authorities acted inconsistently with Articles 3.1 and 3.4 of the Anti-Dumping Agreement with respect to their evaluation of the investment and funding ability of the domestic industry and of the magnitude of the margin of dumping. Concerning the ability to raise capital or investments, the Panel found that Japan did not demonstrate that the KTC's analysis was not objective and that its evaluation of the ability of the domestic industry to raise capital was not one that a reasonable and unbiased investigating authority could have done. Concerning the magnitude of the margin of dumping, the Panel found no textual basis for Japan's argument that, in order to evaluate the magnitude of the margins of dumping, an investigating authority was required to undertake some form of counterfactual analysis, specifically by adding the dumping margin to the actual prices of the dumped imports, or by comparing the magnitude of the dumping margin with the level of overselling. The Panel also found evidence that the KTC had evaluated the magnitude of the margins of dumping “as a substantive matter”.

Claims concerning causation

Volume

With respect to Japan's allegation that certain flaws in the KTC's analysis of the volume of dumped imports “independently” undermined its causation determination, the Panel found that: (1) the fact that the dumped imports decreased during the earlier part of the period of trend analysis did not, in itself, preclude the investigating authority from finding a causal link, particularly when, as in this case, the volume of the dumped imports increased sharply during the last year of the period of trend analysis, when dumping was found; and (2) the fact that the market share of dumped imports did not increase from 2010 to 2013 did not, in itself, make it unreasonable for the KTC to have concluded that the increase in the absolute volume of imports, and in particular the significant increase from 2012 to 2013, combined with the price effects of the dumped imports, caused injury to the domestic industry.

Price

With respect to Japan's allegation that the KTC failed to ensure price comparability between specific products or product segments of the dumped imports and the domestic like product, the Panel found that: (1) when an investigating authority compares the prices of the dumped imports and those of the domestic like product, it must ensure that the prices being compared are, in fact, properly comparable; (2) the KTC acted inconsistently with Articles 3.1 and 3.5 by failing to ensure price comparability in terms of the dates and sales quantities involved, when it compared the individual transaction prices of certain models of dumped imports with the average prices of corresponding models of the domestic like product.

With respect to Japan's allegation that diverging price trends showed that there was no market interaction between the dumped imports and the domestic like product, thus undermining the KTC's price suppression and depression analyses, the Panel found that:

  1. The absence of parallel price trends does not necessarily indicate a lack of competitive relationship between two products groups or that one group of products would not affect the prices of the other. Where price trends diverge, a reasonable investigating authority is expected to take this into account and explain why, nonetheless, it considers that the dumped imports affect the domestic like product prices.
    1. The different magnitude of the price decreases from 2012 to 2013 did not necessarily undermine the KTC's findings with respect to the competitive relationship between the dumped imports and the domestic like product. The KTC's explanation in this regard was reasonable and supported by the facts.
    2. The opposing price movements from 2011 to 2012 could suggest a lack of competition between the dumped imports and the domestic like product. The KTC did not disregard this possibility in its analysis. The KTC explained that the diverging trend from 2011 to 2012 was caused by a change in the product mix of the dumped imports. In certain product groups, the prices of the dumped imports stagnated or decreased, in line with the price trends of the corresponding domestic like products. The KTC's explanation was reasonable and supported by the facts.
  2. There was insufficient evidence on the record to conclude that the KTC considered whether the prices of “representative models” or resale prices of the dumped imports moved in parallel with domestic like product prices.
  3. The verified instances in which the dumped imports were sold at prices lower than those of the domestic like product supported the view that there was competition in the Korean market for valves.
  4. The KTC's price suppression and depression findings were not solely, or even principally, based on a consideration of average price trends. The KTC primarily relied upon the alleged price discrimination among different customers with respect to specific products or product ranges, and the strengthened marketing activities of one of the domestic importers.

Overall, based on the above, the Panel found that the different magnitude of the price decreases from 2012 to 2013, and the opposing price movements from 2011 to 2012, did not in themselves demonstrate that the KTC's determination of a causal relationship was inconsistent with Articles 3.1 and 3.5 of the Anti-Dumping Agreement.

With respect to Japan's allegation that consistent overselling by the dumped imports undermined the KTC's price effects analysis, and consequently its ultimate determination under Article 3.5, the Panel found that: (1) evidence on the record did not sufficiently demonstrate whether and how the OTI conducted the simulations and analyses, and reached the relevant conclusions as argued by Korea during the proceedings; and (2) customer statements, even combined with the large number of price comparisons in the evidence, did not adequately explain the KTC's price suppression and depression findings, in light of the consistent average price overselling by the dumped imports.

Impact on the state of the domestic industry

With respect to Japan's allegation that there was no logical connection between the effects of the dumped imports and the condition of the domestic industry, the Panel found that Japan failed to demonstrate that Korea acted inconsistently with Articles 3.1 and 3.5 of the Anti-Dumping Agreement with respect to: (1) the KTC's alleged failure to establish a logical link between its evaluation of certain factors having a bearing on the state of the domestic industry and its consideration of the volume of the dumped imports and the effect of the dumped imports on prices under Article 3.2; and (2) the examination of the impact of dumped imports on the domestic industry as a consequence of the KTC's alleged flawed price effects analysis.

With respect to Japan's allegation that the KTC improperly included dumped imports held in inventory in its consideration of the market share of the dumped imports, the Panel found that the relevant imports for purposes of determining causation in this case were Japanese valves which were “introduced into the commerce” of Korea at prices below normal value.

Finally, the Panel found that Japan failed to demonstrate that the KTC failed to properly take into account “positive trends” during the period of trend analysis with respect to sales and the ability to raise capital.

Sufficient correlation

The Panel found that Japan failed to demonstrate that the Korean investigating authorities acted inconsistently with Articles 3.1 and 3.5 of the Anti‑Dumping Agreement as a result of an insufficient correlation between the volume trends, price trends and profit trends and the state of the domestic industry that would support the existence of a causal relationship between the dumped imports and the injury to the domestic industry.

Non-attribution

The Panel found that Japan failed to demonstrate that the Korean investigating authorities acted inconsistently with Articles 3.1 and 3.5 by failing to adequately examine other known factors causing injury to the domestic industry at the same time as dumped imports and the cumulative effect of such other known factors.

Confidential treatment of information

The Panel found that Korea acted inconsistently with Article 6.5 of the Anti-Dumping Agreement with respect to the KTC's treatment of information provided by the applicants as confidential without requiring that good cause be shown. The Panel also found that Korea acted inconsistently with Article 6.5.1, with respect to the KTC's failure to require that the submitting parties provide a sufficient non-confidential summary of the information for which confidential treatment was sought.

Overall Conclusions and Recommendations

With respect to those claims that were within the Panel's terms of reference, the Panel concluded as follows.

Japan did not demonstrate that the Korean Investigating Authorities acted inconsistently with:

  1. Articles 3.1 and 3.4 of the Anti-Dumping Agreement with respect to their evaluation of the investment and funding ability of the domestic industry and of the magnitude of the margin of dumping;
  2. Articles 3.1 and 3.5 of the Anti-Dumping Agreement with respect to their conclusion that the dumped imports, through the effects of dumping, were causing injury to the domestic industry; and
  3. Articles 3.1 and 3.5 of the Anti-Dumping Agreement with respect to their examination of known factors other than the dumped imports that were injuring the domestic industry at the same time.

Japan demonstrated that the Korean Investigating Authorities acted inconsistently with:

  1. Articles 3.1 and 3.5 of the Anti-Dumping Agreement in their causation analysis as a result of flaws in their analysis of the effect of the dumped imports on prices in the domestic market;
  2. Article 6.5 of the Anti-Dumping Agreement with respect to their treatment of information provided by the applicants as confidential without requiring that good cause be shown;
  3. Article 6.5.1 of the Anti-Dumping Agreement with respect to their failure to require that the submitting parties provide a sufficient non-confidential summary of the information for which confidential treatment was sought; and,
  4. As a consequence of and to the extent of these inconsistencies, Korea's anti-dumping measures on imports of pneumatic valves from Japan were also inconsistent with Article 1 of the Anti-Dumping Agreement.

On 28 May 2018, Japan notified the DSB of its decision to appeal to the Appellate Body certain issues of law and legal interpretations in the panel report. On 4 June 2018, Korea notified the DSB of its decision to cross-appeal.

On 9 July 2019, the Chair of the Appellate Body notified the Chair of the DSB that the Appellate Body Report in these proceedings would be circulated to WTO Members no later than 10 September 2019. In an earlier communication, the Chair of the Appellate Body had explained that this was due to a number of factors, including the backlog of appeals pending with the Appellate Body at present and the overlap in the composition of all divisions resulting in part from the reduced number of Appellate Body Members.

On 10 September 2019, the Appellate Body report was circulated to Members.

Article 6.2 of the DSU and the panel's terms of reference

The Appellate Body recalled that the requirements under Article 6.2 of the DSU, including the requirement to “provide a brief summary of the legal basis of the complaint sufficient to present the problem clearly”, are central to the proper establishment of the jurisdiction of a panel. A panel request governs a panel's terms of reference and delimits the scope of the panel's jurisdiction, and fulfils a due process objective by providing the respondent and third parties notice regarding the nature of the complainant's case and by enabling them to respond accordingly. Whether a panel request complies with the requirements of Article 6.2 of the DSU must be determined on the face of the panel request, on a case-by-case basis. Defects in the panel request cannot be cured in the subsequent submissions of the parties during the panel proceedings, although submissions during the panel proceedings may be consulted in order to confirm the meaning of the words used in the panel request. The Appellate Body further noted that statements in certain past disputes, that “a brief summary of the legal basis of the complaint” within the meaning of Article 6.2 “aims to explain succinctly how or why the measure at issue is … violating the WTO obligation in question”, do not imply a new and different legal standard for complying with the requirements of Article 6.2. Finally, the Appellate Body recalled that a panel request need only provide the legal basis of the complaint, that is, the claims underlying this complaint, and not the arguments in support thereof

The Appellate Body found that the Panel erred in finding that Japan's claims concerning the definition of domestic industry (claim 7), the volume of the dumped imports (claim 1), the price effects of the dumped imports (claim 2), the disclosure of essential facts (claim 10) and part of Japan's claim concerning the impact of the dumped imports on the domestic industry (claim 3) were outside its terms of reference. The Appellate Body further found that the Panel did not err in finding that Japan's claims concerning causation (claims 4, 6, and part of claim 5), as well as its claims concerning the confidential treatment of information (claims 8 and 9) were within its terms of reference.

The Appellate Body indicated that, for each of these claims, the panel request plainly connected the measure at issue with the provisions of the covered agreements alleged to have been breached, thereby providing “a brief summary of the legal basis sufficient to present the problem clearly” within the meaning of Article 6.2 of the DSU. This is because, in each instance, the panel request identified the specific portion of the measure concerned, as well as the provisions of the covered agreements concerned. The Appellate Body found in certain instances that the nature of the provisions was such that they established a distinct, well-delineated obligation, such that referring to these provisions, along with the identification of the specific portion of the measure concerned, was sufficient for the claims to comply with the requirements of Article 6.2 of the DSU. Alternatively, where the provisions established more than a single, distinct obligation, the Appellate Body found that the narrative of the claims in question identified with sufficient precision the obligation concerned within the provision, so as to meet the requirements of Article 6.2 of the DSU.

Articles 4.1 and 3.1 of the Anti-Dumping Agreement: definition of the domestic industry

As a result of the Appellate Body's finding that claim 7 was within the Panel's terms of reference, the Appellate Body considered Japan's request to complete the legal analysis of whether the Korean investigating authorities acted inconsistently with Articles 3.1 and 4.1 of the Anti-Dumping Agreement by defining the domestic industry as the two applicants of the underlying anti-dumping investigation, whose production the Korean investigating authorities found to constitute a “major proportion” of the total domestic production of the like products. The Appellate Body recalled that, in defining the domestic industry as a major proportion of the total domestic production, an investigating authority is required to assess both quantitative and qualitative aspects, and ensure that it does not act in a manner that gives rise to a material risk of distortion. However, the Appellate Body noted that the Panel neither explored nor made findings with respect to the relevant issues and facts, and that there were insufficient undisputed facts on the Panel's record for determining whether the domestic industry definition at issue met the above requirements. Consequently, the Appellate Body was unable to complete the legal analysis.

Articles 3.1 and 3.4 of the Anti-Dumping Agreement: magnitude of the margin of dumping

The Appellate Body considered Japan's appeal that the Panel erred in finding that Japan failed to demonstrate that the KTC's evaluation of the magnitude of the margin of dumping was inconsistent with Articles 3.1 and 3.4 of the Anti-Dumping Agreement. The Appellate Body considered that Articles 3.1 and 3.4 require an investigating authority to evaluate the magnitude of the margin of dumping, and to assess its relevance and the weight to be attributed to it in the injury assessment. However, the Appellate Body did not consider that these provisions require any one of the factors listed in Article 3.4 to be evaluated in a particular manner or given a particular relevance or weight. The Appellate Body recalled the Panel's finding that the KTC observed that the dumping margins were significant, and consequently that dumping had a significant impact on prices of both the dumped product and the domestic like product. The Appellate Body further recalled that the KTC found evidence of a competitive relationship between the dumped imports and domestic like product, and that the Panel found no error in this regard. Consequently, the Appellate Body disagreed with Japan that the KTC's finding was “not explained at all”. In addition, the Appellate Body disagreed with Japan that the Korean investigating authorities were required to evaluate the magnitude of the margin of dumping in a particular manner, such as through some form of a counterfactual analysis, due to the particular circumstances of this case, namely the overselling by dumped imports. For these reasons, the Appellate Body upheld the Panel's finding.

Articles 3.1 and 3.5 of the Anti-Dumping Agreement: causation

The Appellate Body found that with respect to a claim under Article 3.5, a panel is tasked with reviewing an investigating authority's ultimate demonstration that “dumped imports are, through the effects of dumping, as set forth in paragraphs 2 and, 4 causing injury” to the domestic industry. In so doing, a panel is called upon to review whether the investigating authority properly linked the outcomes of its analyses conducted pursuant to Articles 3.2 and 3.4, taking into account the evidence and factors required under Article 3.5, in coming to a definitive determination regarding the causal relationship between dumped imports and injury to the domestic industry. The Appellate Body explained that a panel's review does not call for revisiting the question of whether each of the interlinked components of this determination itself meets the applicable requirements set out in Article 3.2 or 3.4 of the Anti-Dumping Agreement.

In the present dispute, under claim 6, Japan alleged that the KTC's causation determination was undermined by its flawed analyses of the volume of the dumped imports, the price effects, and the impact of the dumped imports on the state of the domestic industry, “irrespective and independent” of whether the Panel found the KTC's analyses of volume, price effects, and impact to be inconsistent with Articles 3.2 and 3.4. The Appellate Body found that the Panel effectively incorporated the requirements of Article 3.2 regarding the volume of dumped imports and price effects and Article 3.4 regarding the impact of the dumped imports on the domestic industry, rather than properly applying the requirements set out in Article 3.5, even though it was reviewing a claim under the latter provision. Consequently, the Appellate Body reversed the Panel's finding that Japan had demonstrated that the Korean investigating authorities acted inconsistently with Articles 3.1 and 3.5 of the Anti‑Dumping Agreement in their causation analysis as a result of flaws in their analysis of the effect of the dumped imports on prices in the domestic market. However, as further described below, in completing the legal analysis, the Appellate Body found that Korea acted inconsistently with Articles 3.1 and 3.2, second sentence, of the Anti-Dumping Agreement on the basis of the same flaws in the Korean investigating authorities' price effects analysis that the Panel had identified under Articles 3.1 and 3.5.

Under claim 4, Japan alleged that the KTC failed to demonstrate that the dumped imports were causing injury to the domestic industry since there was insufficient correlation between, inter alia, the profit trends and the state of the domestic industry to support the existence of a causal relationship between the dumped imports and the injury to the domestic industry. The Appellate Body found that neither the Panel nor the KTC ignored the alleged lack of correlation between the domestic-industry profit, dumped import prices, and the volume and market share of the dumped imports. Accordingly, the Appellate Body found no error in the Panel's finding that Japan failed to establish that the insufficient correlation between dumped imports and trends in domestic industry profits demonstrates that a reasonable and unbiased investigating authority could not have properly found the required causal relationship between the dumped imports and injury to the domestic industry in light of the facts and arguments that were before the KTC. Consequently, the Appellate Body upheld the Panel's finding that Japan had not demonstrated that the Korean investigating authorities acted inconsistently with Articles 3.1 and 3.5 of the Anti‑Dumping Agreement with respect to their conclusion that the dumped imports, through the effects of dumping, were causing injury to the domestic industry, insofar as Japan's argument regarding insufficient correlation between dumped imports and trends in domestic industry profits was concerned.

Completion of the legal analysis under Articles 3.1, 3.2, and 3.4 of the Anti-Dumping Agreement

With respect to Japan's request to complete the legal analysis under Articles 3.1 and 3.2, first sentence, the Appellate Body noted that the Panel's analysis of Japan's identical arguments in the context of claim 6 properly reviewed the requirements set out in Article 3.2, first sentence. However, the Appellate Body found that Japan's arguments in the context of its request for completion under Articles 3.1 and 3.2 concerning the volume of dumped imports encompassed broader considerations that the Panel did not sufficiently explore with the parties. The Appellate Body further noted that the underlying factual bases pertaining to these issues were contested between the parties. Consequently, the Appellate Body found itself unable to complete the legal analysis as to whether the Korean measures are inconsistent with Articles 3.1 and 3.2 of the Anti‑Dumping Agreement with respect to the Korean investigating authorities' consideration of the volume of dumped imports.

With respect to Japan's request to complete the legal analysis under Articles 3.1 and 3.2, second sentence, the Appellate Body noted that Japan raised identical arguments in the context of claim 6 with respect to the issues of price comparability and price overselling by dumped imports. The Appellate Body recalled that the Panel's analyses and findings, although made in the context of claim 6, were nonetheless in line with and properly conducted under the requirements set out in Article 3.2, second sentence. Thus, the Appellate Body found that it was able to complete the legal analysis in part. The Appellate Body found that the Korean investigating authorities acted inconsistently with Articles 3.1 and 3.2 of the Anti‑Dumping Agreement: (i) to the extent that they found price-suppressing and -depressing effects of dumped imports based on the relevant price comparisons without ensuring price comparability; and (ii) in the absence of any explanation and analysis of how and to what extent the prices of the domestic like product were affected in light of the consistent overselling by dumped imports when finding price suppression and price depression.

The Appellate Body also found that the Korean investigating authorities did not act inconsistently with Articles 3.1 and 3.2 with respect to their consideration of diverging price trends. However, with respect to the other arguments by Japan regarding the KTC's price effects analysis, the Appellate Body noted that the Panel never explored these arguments with the parties, and that the parties disagreed with respect to the factual bases underlying these arguments. Therefore, the Appellate Body found itself unable to complete the legal analysis as to whether the Korean investigating authorities acted inconsistently with Articles 3.1 and 3.2 on the basis of the remainder of Japan's arguments.

With respect to Japan's request to complete the legal analysis under Articles 3.1 and 3.4 regarding the impact of the dumped imports on the domestic industry, the Appellate Body noted that Japan raised certain identical arguments in the context of claim 6. The Appellate Body recalled that it agreed with the Panel that, in order to properly examine the impact of dumped imports on the domestic industry for purposes of Article 3.4, an investigating authority is not required to link that examination with its consideration of the volume and the price effects of the dumped imports. The Appellate Body also recalled that it had rejected Japan's understanding that Article 3.4 contemplates an exhaustive analysis of all known factors that may cause injury to the domestic industry. However, the Appellate Body noted that Japan's arguments in the context of its request for completion under Articles 3.1 and 3.4 encompassed broader considerations which would require it to review the KTC's examination of, and the weight it attributed to, each of the factors listed in Article 3.4 regarding which the Panel made no findings. Consequently, the Appellate Body found itself unable to complete the legal analysis as to whether the Korean investigating authorities acted inconsistently with Articles 3.1 and 3.4 of the Anti‑Dumping Agreement on the basis of Japan's argument that the KTC failed to adequately explain how imports had negatively impacted the domestic like products as a whole in light of positive trends experienced by the domestic industry.

Articles 6.5 and 6.5.1 of the Anti-Dumping Agreement: confidential treatment of information

The Appellate Body found that, under Article 6.5, an investigating authority is required to objectively assess whether the request for confidential treatment has been sufficiently substantiated such that “good cause” has been shown. The fact that the investigating authority has conducted this objective assessment must be discernible from its published report or related supporting documents. The Appellate Body considered that the Panel's analysis comported with the legal standard under Article 6.5 and consequently foundthat the Panel did not err in its interpretation of this provision.

Korea argued that the Panel erred in its application of the law to the facts because, based on a proper application of Article 6.5, the KTC was not obliged to make specific statements about each of the requests for confidentiality other than to satisfy itself that good cause was shown before treating the information in question as confidential. However, the Appellate Body recalled the Panel's finding that it could not “conclude that the Korean Investigating Authorities actually engaged in a consideration of whether the submitters of the information had shown good cause”. Specifically, the Panel found no evidence on the record “linking the information for which confidential treatment was granted to the categories of information warranting confidential treatment identified in Korean law”. Given these Panel findings, the Appellate Body rejected Korea's claim and found that the Panel did not err in its application of Article 6.5. Consequently, the Appellate Body upheld the Panel's finding that the Korean investigating authorities acted inconsistently with Article 6.5 of the Anti‑Dumping Agreement.

The Appellate Body also rejected Korea's claim that the Panel erred in its application of Article 6.5.1 of the Anti-Dumping Agreement by finding that the KTC failed to require the applicants to furnish non-confidential summaries of the information submitted in confidence. The Appellate Body agreed with the Panel that, “[i]n the complete absence of data, and with no narrative summary with respect to the deleted information, the ‘Disclosed’ versions of the three communications identified by Japan cannot be said to contain a summary in sufficient detail to ‘permit a reasonable understanding of the substance of the information submitted in confidence’.” Thus, the Appellate Body upheld the Panel's finding that the Korean investigating authorities acted inconsistently with Article 6.5.1 of the Anti‑Dumping Agreement.

Article 6.9 of the Anti-Dumping Agreement: disclosure of essential facts

Having reversed the Panel's finding that Japan's claim under Article 6.9 of the Anti‑Dumping Agreement was outside its terms of reference, the Appellate Body turned to Japan's request for the Appellate Body to complete the analysis and find that Korea acted inconsistently with Article 6.9 due to the KTC's failure to disclose the “essential facts” before its “final determination”.

Because key issues were left unexplored by the Panel and there was a lack of sufficient factual findings by the Panel and uncontested facts on the record, the Appellate Body found that it was unable to complete the analysis and determine whether Korea had acted inconsistently with Article 6.9 of the Anti-Dumping Agreement by failing to disclose the “essential facts” under consideration.

At its meeting on 30 September 2019, the DSB adopted the Appellate Body report and panel report, as modified by the Appellate Body report.

 

Reasonable period of time

At the DSB meetings on 30 September 2019 and 28 October 2019, Korea informed the DSB that it intended to implement the DSB's recommendations and rulings in this dispute but that it would need a reasonable period of time to do so. On 14 November 2019, Korea and Japan informed the DSB that they had agreed that the reasonable period of time for Korea to implement the DSB's recommendations and rulings would be eight months. Accordingly, the reasonable period of time was set to expire on 30 May 2020.

On 15 June 2020, Korea and Japan informed the DSB of Agreed Procedures under Articles 21 and 22 of the DSU (sequencing agreement).

 

Implementation of adopted reports

On 28 May 2020, Korea informed the DSB of its compliance in this dispute. In this respect, Korea explained that the Korea Trade Commission (KTC) had issued the final resolution of the re-investigation into imports of valves for pneumatic transmissions originating in Japan. Following its review of the KTC’s final resolution, the Ministry of Economy and Finance of Korea made its final re-determination, which was published in the Official Gazette on 29 May 2020. Korea submitted that it had therefore fully implemented the DSB's recommendations in this dispute.

 

 

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