DS437: US — Countervailing measures on certain products from China

China believed that the Appellate Body (AB) findings, together with the unappealed panel findings, constituted an emphatic rejection of the United States’ entire analytical framework for determining the existence of alleged input subsidies. In particular, China welcomed the AB’s rejection of the US approach to the interpretation of “public body”, the rejection of the US method for evaluating market distortion in determining whether the provision of financial contribution has conferred a benefit, the AB’s interpretative analysis on specificity — especially its reversal of the panel’s findings in relation to the proper identification of a subsidy programme and in relation to the identification of the granting authority — and its findings on adverse facts available determinations. However, China regretted that the AB was unable to complete the analysis on specificity and facts available due to insufficient analysis by the panel.

The United States raised two concerns with the AB report: the proper role of panels and the AB in dispute settlement, and the AB’s findings with respect to the treatment of entities associated with the government for the purpose of determining market benchmarks. On the first issue, the US considered that the AB report had departed from previous practices by developing legal interpretations without regard to the case made by China. Moreover, it regretted the AB’s finding that the panel had breached its responsibility by not conducting independent examinations of arguments and issues never raised by China. On the second issue, the US regretted that the AB repeated its findings in the dispute “US — Carbon Steel (India)”. On the other hand, the US welcomed the AB’s rejection of China’s legal theories on the issues of subsidy programme and specificity.

The US reiterated its concern with the AB’s failure to consult with the parties before exceeding the 90-day time-limit and it urged the AB to return to its pre-2011 practice. The US also expressed disappointment that China had not agreed to a letter confirming that a report issued after the 90-day deadline would be considered consistent with Article 17.5 of the Dispute Settlement Understanding, thus departing from past practices.

Speaking as third parties, Australia commented on the AB’s recurrent delay in the completion of the appeal proceedings due to its current workload. In this regard, it encouraged as few departures as possible from normal appeal timeframes and consultations with the parties in the event of a delay, so as to preserve the transparency and predictability of dispute settlement proceedings. Canada welcomed the AB’s rejection of China’s argument with regard to benefit calculation and its formalistic approach to specificity analysis. With regard to the AB’s increased workload, Canada reiterated its interest in discussing practical steps to alleviate the pressure on the dispute settlement system. India welcomed the AB’s findings on benchmark prices for the purpose of determining a benefit and the clarification of the legal standard regarding application of facts available.

The DSB adopted the Appellate Body report contained in document WT/DS437/AB/R and the panel report contained in document WT/DS437/R and Add.1, as modified by the Appellate Body report.

 

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Other business 

Under “Other Business”, the United States made a statement with regard to its intention to implement the recommendations of the Dispute Settlement Body (DSB) in the dispute “United States — Countervailing Measures on Certain Hot-Rolled Carbon Steel Flat Products from India (DS436)”. The US said that it needed a reasonable period of time for implemention. India welcomed the US statement and stood ready to discuss with the US a reasonable period of time for implementation. India urged the US to comply with the DSB’s recommendations as soon as possible.