WTO: 2011 NEWS ITEMS

DISPUTE SETTLEMENT

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NOTE:
This summary has been prepared by the WTO Secretariat’s Information and External Relations Division to help public understanding about developments in WTO disputes. It is not a legal interpretation of the issues, and it is not intended as a complete account of the issues. These can be found in the reports themselves and in the minutes of the Dispute Settlement Body’s meetings.

DS397: European communities — definitive anti-dumping measures on certain iron or steel fasteners from china

The DSB adopted the Panel and Appellate Body reports (WT/DS397/R and WT/DS397/AB/R) which reviewed anti-dumping measures taken by the EU on imports of iron and steel products from China.

China stated that hundreds of thousands of Chinese enterprises, mostly small and medium ones, which suffered from the EU's anti-dumping measures, would applaud the decision made today. China said that the EU was one of the most frequent users of anti-dumping measures among WTO members. China said that since 1979, the EU had initiated over 160 anti-dumping measures against Chinese products. China added that unwarranted use of anti-dumping measures not only distorted world trade, but also seriously undermined the legitimate interests of exporting countries, especially developing countries such as China. China recalled that in responding to some of these measures on 31 July 2009, China launched its first trade dispute against the EU in the WTO, complaining that anti-dumping duties on certain iron or steel fasteners from China were discriminatory and protectionist. China said it also challenged in this case certain systematic wrong doings carried out repeatedly, for years, by the EU in its anti-dumping investigations. China welcomed the unequivocal confirmation by the Appellate Body and the Panel that the individual treatment regime laid down in Article 9.5 of the EU's Basic Anti-dumping Regulation (see here) was both “as such” and “as applied” inconsistent with WTO law. China stated that this provision required suppliers from certain WTO members, such as China, to meet additional conditions before they could qualify for individual treatment and be granted an individual duty and dumping margin. China also welcomed the Appellate Body's conclusion that section 15 of its Protocol of Accession (see here) did not contain an open-ended exception and did not provide a legal basis for the EU's presumption in Article 9.5 of its Basic Anti-dumping Regulation. China invited the EU to take the necessary positive steps to ensure prompt and full compliance with the reports' findings.

The EU regretted that Article 9.5 of its Basic Anti-dumping Regulation had been found to be WTO-inconsistent “as such” and “as applied” in this case. According to the EU, Article 9.5 was conceived as an important provision which prevented the state from channelling all dumped exports via the state company with the lowest duty rate. The EU was satisfied with two considerations put forward by the Appellate Body.

According to the EU, the Appellate Body recognized that there may be circumstances where exporters and producers from non-market economies could be grouped in a single entity when calculating a dumping margin and imposing a duty. For instance, several distinct exporters may be treated as one single exporter because of structural and commercial integration or due to control or material influence by the state. According to the EU, the Appellate Body stated that the economic structure of a member may be used as evidence before an investigating authority to determine whether the state and a number of exporters or producers subject to an investigation constitute a single entity.

The US expressed concerns on the Panel and Appellate Body consideration of Articles 6.10 and 9.2 of the Anti-dumping Agreement (see here), arguing that they did not appreciate fully the difficulties that investigating authorities encounter when determining anti-dumping margins for non-market economy exporters. The US added that the Appellate Body correctly recognized that the Anti-dumping Agreement neither defined “exporter” nor “producer”, nor set out the specific criteria for the investigating authority to examine, before concluding that a particular firm or group of firms constituted an “exporter” or “producer”. The US noted that the Appellate Body underscored the importance of properly defining the domestic industry for purposes of the injury analysis. The US also said that the Appellate Body report was circulated outside the 90-day period stipulated in Article 17.5 of the Dispute Settlement Understanding (see here).

  

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The next meeting of the DSB will be held on 2 September 2011.

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