DISPUTE SETTLEMENT

DS: Australia — Anti-Dumping and Countervailing Duty Measures on Certain Products from China

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 China

On 24 June 2021, China requested consultations with Australia with respect to anti-dumping and countervailing measures imposed by Australia on imports of certain products originating in China, inter alia, wind towers, deep drawn stainless steel sinks and railway wheels.

China claimed that the anti-dumping measures on wind towers, deep drawn stainless steel sinks and railway wheels appear to be inconsistent with:

  • Articles 2.1, 2.2, 2.2.1.1, 2.2.2, 2.4 and 9.3 of the Anti-Dumping Agreement; and
     
  • Articles VI:1 and VI:2 of the GATT 1994.

China claimed that the countervailing measures on deep drawn stainless steel sinks appear to be inconsistent with:

  • Articles 1.1(a)(1),1.1(b), 2.1(c), 11.1, 11.2, 11.3 and 14(d) of the SCM Agreement.

 

Panel and Appellate Body proceedings

On 13 January 2022, China requested the establishment of a panel. At its meeting on 25 January 2022, the DSB deferred the establishment of the panel.

At its meeting on 28 February 2022, the DSB established a panel. Argentina, Brazil, Canada, the European Union, India, Japan, Korea, Malaysia, Mexico, Norway, the Russian Federation, Singapore, Switzerland, Chinese Taipei, United Kingdom, United States, and Viet Nam reserved their third-party rights.

On 28 April 2022, Australia and China informed the DSB that they had agreed to Procedures for Arbitration under Article 25 of the DSU in this dispute. Such procedures were entered into by Australia and China to give effect to the communication JOB/DSB/1/Add.12 (“Multi-Party Interim Appeal Arbitration Arrangement Pursuant To Article 25 Of The DSU (MPIA)”) and with the objective of setting a framework for an Arbitrator to decide on any appeal of any final panel report issued in this dispute, if the Appellate Body is not able to hear such an appeal under Articles 16.4 and 17 of the DSU.

Following the agreement of the parties, the panel was composed on 5 September 2022.

On 23 February 2023, the Chair of the panel informed the DSB that taking account of the working procedures and the timetable that were prepared in consultation with the parties, the volume of the submissions received and the complexity of the issues presented, and scheduling conflicts arising from, inter alia, panelist involvement in other WTO disputes, the panel did not expect to issue its final report to the parties before the end of 2023, at the earliest. The Chair of the panel apprised the DSB that the report would be available to the public once it was circulated to the Members in all three official languages, and that the date of circulation depends on completion of translation. On 1 December 2023, the Chair of the panel informed the DSB that the panel expected to issue its final report to the parties during the first quarter of 2024.

On 26 March 2024, the panel report was circulated to Members.

Factual background

China challenges Australia's measures concerning a series of anti‑dumping/countervailing duties proceedings with respect to three different products, i.e. wind towers, deep drawn stainless steel sinks (stainless steel sinks), and railway wheels. China challenges anti‑dumping measures in each of the three proceedings. China challenges countervailing measures with respect to the stainless steel sinks proceedings only. Australia requested that the Panel reject China's claims in this dispute in their entirety.

Expiry of measures and terms of reference

With respect to wind towers and stainless steel sinks, Australia argued that the Panel should decline to make findings and recommendations with respect to multiple claims because, in Australia's view: (a) the claims were directed against measures that expired before the date of the Panel’s establishment; and (b) China's panel request failed to satisfy the requirements of Article 6.2 of the DSU.

The Panel found that certain claims under the Anti-Dumping Agreement, and all claims made under the SCM Agreement, related to aspects of the anti-dumping and countervailing orders that had expired before the establishment of the Panel. On that basis, the Panel declined to issue findings or recommendations with respect to those claims. The Panel also found that it was unnecessary to address Australia's challenges under Article 6.2 of the DSU.

The Panel's findings

With respect to railway wheels, the Australian investigating authority, the Anti-Dumping Commission (the ADC) had only completed an original investigation. However, for wind towers, the ADC had completed an original investigation and a sunset review (the parties referred to sunset reviews as “expiry reviews”). For stainless steel sinks, the ADC had completed an original investigation, multiple interim reviews, and an expiry review. For each of the latter two products, with limited exceptions, China brought claims against all segments (investigations, interim reviews, and expiry reviews). For those two products, the Panel considered it generally sufficient to make findings with respect to the expiry reviews only.

Wind towers

The Panel found that, in the expiry review, the ADC acted inconsistently with:

  • Article 2.2.1.1 of the Anti-Dumping Agreement because the ADC improperly rejected using the examined exporter's record costs for steel plate in constructing normal value;
  • Article 2.2 of the Anti‑Dumping Agreement by “uplifting” the examined exporter's steel plate costs when constructing normal value, and then transferring that methodology over onto the ADC's calculation of normal values for the uncooperative and all other exporters, without a reasoned and adequate explanation as to why the uplifted costs, without any adjustments to adapt such uplifted costs to the exporter's circumstances, represented a cost of production in China for the examined exporter;
  • Article 2.2 of the Anti-Dumping Agreement by determining that domestic sales of wind towers did not permit a proper comparison with export sales on the basis of a “relevance” test that has no basis in Article 2.2; and
  • Article 9.3 of the Anti-Dumping Agreement and Article VI:2 of the GATT 1994 to the extent that the ADC acted inconsistently with Article 2 of the Anti-Dumping Agreement.

The Panel found that China had not demonstrated that the ADC acted inconsistently with Article 2.2.2 of the Anti-Dumping Agreement, by applying a profit rate to improperly uplifted cost data, because China failed to make a prima facie case in this context.

The Panel found it unnecessary to examine certain other claims raises by China under the provisions of Article 2 of the Anti-Dumping Agreement because the relevant issues had already been addressed under the Panel's other findings.

Stainless steel sinks

The Panel found that the ADC, in the expiry review, acted inconsistently with:

  • Article 2.2 of the Anti‑Dumping Agreement by failing to provide a reasoned and adequate explanation as to why surrogate costs of production chosen for performing the ordinary course of trade test represented a cost of production in China. The Panel also found a consequential violation of Article 2.2.1;
  • Article 2.4 of the Anti-Dumping Agreement by: (i) comparing export models to export models for purposes of performing a fair comparison as between the normal value and export price for a certain examined exporter; (ii) making an adjustment for taxation vid-a-vis a normal value that was flawed due to the improper use of surrogate costs in applying the ordinary-course-of-trade test; and (iii) treating accessories purchased by a certain examined exporter from third‑party suppliers differently from accessories produced by the exporter without an adequate and reasonable explanation; and
  • Article 9.3 of the Anti-Dumping Agreement and Article VI:2 of the GATT 1994 to the extent that the ADC acted inconsistently with Article 2 of the Anti-Dumping Agreement.

The Panel found that China had not demonstrated that the ADC acted inconsistently with:

  • Article 2.2.1.1 of the Anti-Dumping Agreement in the expiry review, and thus also acted inconsistently with Article 2.2.1 of the Anti-Dumping Agreement, by rejecting exporters' record costs for purposes of performing the ordinary‑course‑of-trade test;
  • Article 2.4 of the Anti-Dumping Agreement in the expiry review in determining that the VAT recoverability difference between domestic and export sales affected price comparability between the normal value and export price; and
  • Article 2.4 of the Anti‑Dumping Agreement in the expiry review by using an averaging methodology in calculating the adjustments to account for differences in accessories for a certain examined exporter.

The Panel found it unnecessary to examine: (1) certain other claims raised by China under the provisions of Article 2 of the Anti-Dumping Agreement because the relevant issues had already been addressed under the Panel's other findings, or because the challenged aspects of the anti-dumping order had expired before panel establishment; and (2) all of China's claims raised under the SCM Agreement because the challenged aspects of the countervailing duty order expired before Panel establishment.

Railway wheels

The Panel found that the ADC, in the original investigation, acted inconsistently with:

  • Article 2.2.1.1 of the Anti-Dumping Agreement because the ADC improperly departed from using the examined exporter's record costs of production when constructing normal value;
  • Article 2.2 of the Anti‑Dumping Agreement by failing to provide a reasoned and adequate explanation as to why uplifted costs of production used in constructing normal value, without any adjustments to adapt such uplifted costs to the examined exporter's circumstances in China (other than SG&A adjustments), represented a cost of production in China for the examined exporter;
  • Article 2.2.2(i) of the Anti-Dumping Agreement by failing to calculate profit on the basis of the actual amounts realized by the examined exporter in respect of “sales in the domestic market of the country of origin”. The ADC also acted inconsistently with Article 2.2.2(i) of the Anti-Dumping Agreement by using surrogate costs of production in its profit determination; and
  • Article 9.3 of the Anti‑Dumping Agreement and Article VI:2 of the GATT 1994 to the extent that the ADC acted inconsistently with Article 2 of the Anti-Dumping Agreement.

The Panel found it unnecessary to examine certain other claims raised by China under the provisions of Article 2 of the Anti-Dumping Agreement because the relevant issues had already been addressed under the Panel's other findings.

The Panel's recommendation and suggestion

The Panel recommended that Australia bring its measures into conformity with its obligations under the GATT 1994 and the Anti‑Dumping Agreement.

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.