DISPUTE SETTLEMENT

DS: Morocco — Definitive Anti-Dumping Measures on School Exercise Books from Tunisia

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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Summary of the dispute to date

The summary below was up-to-date at

Consultations

Complaint by Tunisia (See also DS555)

On 21 February 2019, Tunisia requested consultations with Morocco concerning definitive anti-dumping duties imposed by Morocco on imports of school exercise books. This is the second consultations request submitted by Tunisia against Morocco on a similar matter (see DS555, concerning provisional anti-dumping duties imposed by Morocco on imports of school exercise books from Tunisia).

Tunisia claimed that the challenged measures appear to be inconsistent with:

  • Articles 1, 2.1, 2.2, 2.2.1, 2.2.1.1, 2.2.2, 2.4, 3.1, 3.2, 3.4, 3.5, 4.1, 5.2, 5.3, 5.8, 5.10, 6.5, 6.5.1, 6.8, 9, 11, 12.2, 12.2.2, 18.1 and paragraphs 1, 3, 5, and 6 of Annex II of the Anti-Dumping Agreement; and
     
  • Articles II:1(a), II:1(b), VI:1 and VI:6(a) of the GATT 1994.

 

Panel and Appellate Body proceedings

On 19 September 2019, Tunisia requested the establishment of a panel. At its meeting on 30 September 2019, the DSB deferred the establishment of a panel.

At its meeting on 28 October 2019, the DSB established a panel. Brazil, Canada, China, the European Union, Japan, Madagascar, the Russian Federation and the United States reserved their third-party rights.

On 9 March 2020, Tunisia requested the Director-General to compose the panel. On 19 March 2020, the Director-General composed the panel.

On 17 November 2020, the Chair of the panel informed the DSB that, due to the number and complexity of the questions before the panel in this case, the panel intended to issue its final report to the parties on the first half of 2021.

On 27 July 2021, the panel report was circulated to Members.

This dispute, brought to the WTO in September 2019, concerns a definitive anti-dumping measure imposed by Morocco on imports of school exercise books from Tunisia following an investigation opened by the Ministry of Industry, Investment, Trade and the Digital Economy (MIICEN) of Morocco in May 2017.

Allegations by Tunisia concerning calculation of the dumping margin

Tunisia contested firstly several aspects of the dumping margin calculation used by the Moroccan investigating authority.

  • The first of these concerned the construction of the normal value established by MIICEN and, specifically, whether including certain distribution costs in the normal value was compatible with Article 2.2 of the Anti-Dumping Agreement.
     
  • The second concerned the “reasonable amount of profit” (within the meaning of Article 2.2) and, notably, whether MIICEN could exclude certain domestic sales of exercise books from this amount, on the grounds that those models were not exported.

On these two issues, the Panel agreed with Tunisia by considering that the construction of the normal value used by MIICEN was incompatible with Article 2.2 and that the amount attributed to profits was incompatible with Articles 2.2 and 2.2.2 of the Anti-Dumping Agreement.

Secondly, Tunisia contested the “fair” comparison between the normal value and the export price of the exercise books. There again Tunisia contested two aspects of the dumping margin calculation used by MIICEN:

  • The first aspect concerned the mathematical formula used by the investigating authority to calculate the dumping margin (and specifically the choice of the numerator and the denominator).
     
  • The second concerned MIICEN's refusal to make any allowances for the physical characteristics of certain exercise books sold under licence.

The Panel agreed with Tunisia on the first issue by finding that the mathematical formula used for calculating the dumping margin neither allowed for a dumping margin to be expressed nor reflected the dumping margin of each of the Tunisian exporters that had taken part in the investigation. In the Panel's view, that error led to an unfair comparison between the normal value and the export price of the exercise books and thus ran counter to Article 2.4 of the Anti-Dumping Agreement.

As to the request to make allowances by the Tunisian exporters on the grounds that certain models of the exercise books were sold under licence, the Panel considered that the exporters had not demonstrated how such a difference affected the comparability between the normal value and the export price of the exercise books. The Panel did, however, find that MIICEN did not elaborate in its final determination on “the reasons for the acceptance or rejection of relevant arguments or claims made by the exporters” concerning the impact of licences on the comparability of the prices, in violation of Article 12.2.2 of the Anti-Dumping Agreement.

Allegations by Tunisia concerning determination of injury and the causal link between imports and injury

Tunisia requested that the Panel find that determination of injury caused to the domestic industry was incompatible with Articles 3.1, 3.2 and 3.4 of the Anti-Dumping Agreement.

Regarding the impact of imports on prices, the Panel considered that Morocco had acted in a manner that was incompatible with Articles 3.1 and 3.2 of the Anti-Dumping Agreement by not carrying out an “objective examination” of price undercutting, price depression and prevention of price increases. Furthermore, the Panel considered that Article 3.2 of the Anti-Dumping Agreement did not allow the investigating authority to compare the price of Tunisian imports with a hypothetical price of the domestic product in order to examine the existence of price undercutting. In the Panel's view, the fact that MIICEN had applied this method was incompatible with Article 3.2. Lastly, the Panel also found that MIICEN had not carried out an “objective examination” of evolution in sales, market share and productivity of the domestic market, as well as profitability within the meaning of Articles 3.1 and 3.4 of the Anti-Dumping Agreement.

Regarding determination of a causal link, Tunisia requested that the Panel find that an injury analysis incompatible with Articles 3.1, 3.2 and 3.4 of the Anti-Dumping Agreement could not lead to a proper causation analysis. The Panel found in favour of Tunisia on this issue and found the causation analysis conducted by Morocco to be incompatible with Articles 3.1 and 3.5 of the Anti-Dumping Agreement

Lastly, Tunisia requested that the Panel find that MIICEN was bound to examine the competition of Imprimerie Moderne as a “known factor” causing injury to the domestic industry. The Panel found that the evidence before the investigating authority did not demonstrate that the competition of Imprimerie Moderne was a cause of injury and that Morocco had therefore not violated Articles 3.1 and 3.5 of the Anti-Dumping Agreement.

Allegations by Tunisia concerning MIICEN's examination of the application made by domestic producers

Tunisia alleged that the investigating authority had not properly examined the evidence of dumping contained in the application made by domestic producers and that the decision to initiate an investigation was therefore incompatible with Articles 5.2, 5.3 and 5.8 of the Anti-Dumping Agreement.

The Panel found that while Article 5.2 of the Anti-Dumping Agreement set forth what the application should contain, it did not impose any direct obligation on the investigating authority. It considered, however, that the investigating authority was bound, by virtue of Article 5.3, to examine the accuracy and adequacy of the evidence provided in the application to determine whether there was sufficient evidence to justify the initiation of an investigation. The Panel subsequently found that MIICEN had not duly examined the evidence related to the export price, the normal value and certain adjustments. It therefore found that Morocco had violated Article 5.3 of the Anti-Dumping Agreement.

On 28 July 2021, Morocco notified the DSB of its decision to appeal to the Appellate Body certain issues of law and legal interpretations in the panel report. On 16 August 2021, Tunisia requested the Chair of the DSB to circulate a communication noting that Morocco had not served an appellant's submission. Consequently, Tunisia confirmed that it was not in a position to exercise its right to serve an appellee's submission within the required time frame given that Tunisia did not know which specific arguments Morocco intended to raise.

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