DISPUTE SETTLEMENT

DS: Korea — Sunset Review of Anti-Dumping Duties on Stainless Steel Bars

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.

  

See also:

back to top

Current status

 

back to top

Key facts

 

back to top

Latest document

  

back to top

Summary of the dispute to date

The summary below was up-to-date at

Consultations

Complaint by Japan

On 18 June 2018, Japan requested consultations with Korea concerning Korea’s determination to continue the imposition of anti-dumping duties on stainless steel bars from Japan, based on the conclusion of the third sunset review of anti-dumping duties on stainless steel bars from Japan, India and Spain.

Japan claimed that the measures appear to be inconsistent with:

  • Articles 1, 6.5, 6.8, 6.9, 11.3, 11.4, 12.2, 12.3 and paragraphs 3 and 7 of Annex II of the Anti-Dumping Agreement; and
     
  • Article VI of the GATT 1994.

 

Panel and Appellate Body proceedings

On 13 September 2018, Japan requested the establishment of a panel. At its meeting on 26 September 2018, the DSB deferred the establishment of a panel.

At its meeting on 29 October 2018, the DSB established a panel. China, the European Union, India, Kazakhstan, the Russian Federation, Chinese Taipei and the United States reserved their third-party rights.

On 14 January 2019, Japan requested the Director-General to compose the panel. On 21 January 2019, the Director-General composed the panel.

On 3 September 2019, the Chair of the panel informed the DSB that the panel expected to issue its final report to the parties in the middle portion of 2020. The Chair noted that the panel's work had been delayed due to a lack of personnel in the Secretariat available to staff disputes. On 30 July 2020, the Chair of the panel informed the DSB that due to the volume of materials submitted during these proceedings and logistical constraints arising from the current circumstances, the panel expected to issue its final report to the parties in the latter half of 2020.

On 30 November 2020, the panel report was circulated to Members.

This dispute concerns anti-dumping duties imposed by Korea on certain stainless steel bars from Japan.

Japan's claims concerning price and volume effects and “other injury factors” under Article 11.3 of the Anti-Dumping Agreement

Japan claimed that Korea's investigating authority made a number of errors in its assessment of prices and volumes when concluding that, once the anti-dumping measures are terminated, the resulting drop in prices and increase in imports would be likely to lead to a recurrence of injury. The Panel found that Korea's investigating authority erred by failing to reconcile a tension in its own findings on this point. On the one hand, the authority found that the Japanese pricing level upon the termination of the duties would lead to a weakening of Korean price competitiveness and an increase in Japanese imports. On the other hand, the authority found that the Korean market was price-sensitive and that the Japanese pricing level would remain significantly higher than Korean and third-country prices even if the duties were terminated. For the Panel, the significance of this tension was magnified by the authority's factual finding that a large volume of low‑priced imports from third countries was already present and exerting price pressure in the Korean market. By failing to address how the significantly higher‑priced Japanese imports could weaken Korean price competitiveness and be shipped in larger volumes in this context, the authority failed to resolve the tension in its own findings. Accordingly, the authority failed to undertake an “unbiased and objective” evaluation of the facts on this point, which the Panel found to result in an inconsistency with Article 11.3.

Japan also claimed that Korea's investigating authority failed to account for three factors that could explain the likely recurrence of injury instead of the termination of the duties on Japan. These three factors were: (a) the impact of the large volume of low‑priced imports from third countries; (b) the cost of raw materials; and (c) weak demand in both the domestic and export markets. The Panel decided not to examine the first factor because its substance was already addressed in its assessment of Japan's claims concerning price and volume effects. For the remaining factors, the Panel found that Japan had failed to establish a prima facie case of inconsistency with Article 11.3. The Panel reasoned that Japan's case was limited to pointing out that these factors had been recognized by the authority as sources of injury during the period of review without explaining how those specific injury factors would sever or diminish the link between lifting the anti‑dumping duties and the likelihood that this would lead to a recurrence of injury.

Japan's claims concerning capacity utilization under Articles 6.8 and 11.3 of the Anti-Dumping Agreement

Japan claimed that Korea's investigating authority acted inconsistently with Articles 6.8 and 11.3 by rejecting the production capacity figures submitted by the Japanese exporters and instead relying on another source for Japan's production capacity as part of its determination of Japan's capacity utilization rate. The Panel found that Korea's investigating authority initially requested production capacity figures from the Japanese exporters based on certain parameters, and subsequently changed its preferred parameters without adequately conveying this change to the Japanese exporters. Accordingly, the Panel found that Korea's authority acted inconsistently with Articles 6.8 and 11.3 by rejecting the Japanese exporters' production capacity figures on the basis of their failure to comply with new parameters of which they had not been informed.

Japan's claim concerning confidentiality under Article 6.5 of the Anti-Dumping Agreement

Japan claimed that Korea's investigating authority acted inconsistently with Article 6.5 with respect to its treatment of 102 pieces of information as confidential in the underlying review. The Panel accepted Japan's claim that Korea's authority failed to ensure that there was “good cause” for treating these pieces of information as confidential, whilst observing that there is merit in Korea's general system for protecting information as confidential.

Judicial economy

In view of the aforementioned findings of inconsistency, the Panel decided that findings on Japan's additional claims under Articles 6.5.1, 6.9, 11.3, 11.4, 12.2, 12.2.2, 12.3 of the Anti-Dumping Agreement, paragraphs 3 and 7 of Annex II to the Anti-Dumping Agreement, and Article VI:6(a) of the GATT, would add nothing to the way in which Korea chooses to comply with those inconsistencies. The Panel therefore decided to exercise judicial economy over those claims.

On 22 January 2021, Korea notified the DSB of its decision to appeal to the Appellate Body certain issues of law and legal interpretations in the panel report. On 27 January 2021, Japan informed the DSB that it had taken note of Korea's notification of its appeal and that, given the current non-operational situation of the Appellate Body, it considered that all the procedural deadlines set out in the Appellate Body's Working Procedures were suspended. Japan indicated that, until the Appellate Body resumes its operation and sets the schedule for this appeal, Japan reserved its full rights to file its own appeal on errors (if any) in the issues of law covered in the panel report and legal interpretations developed by the panel, and submit any relevant submissions for this case.

 

Share


Follow this dispute

  

Problems viewing this page? If so, please contact [email protected] giving details of the operating system and web browser you are using.