As at the previous committee meeting in April, Japan once again voiced its concerns about the sharp rise in the number of anti-dumping (AD) measures initiated against steel imports.  The number of dumping investigations initiated by members in the steel sector stood at 23 in both 2012 and 2013 respectively, Japan noted; however it rose sharply to 41 investigations in 2015. 

Japan said it was concerned oversupply in steel was mainly due to expansion of production capacity among emerging economies that did not have an economic justification and that this was triggering a rise in trade remedy measures globally.  It urged members to examine whether their investigations met the strict requirements set out under WTO rules. 

 

Specific concerns

Some of the specific concerns raised regarding the anti-dumping practices of members included the following:

• China and the Russian Federation expressed concerns with the investigations initiated by the European Union on imports of cold-rolled and hot-rolled steel.  Russia said the EU arrived at excessive dumping margins which led to the imposition of excessive AD duties on Russian cold-rolled steel, and that it was concerned the EU would take a similar approach with regards to an investigation on imported hot-rolled steel.  China said it was concerned about the EU’s investigation on hot-rolled steel products and that there was insufficient evidence to justify the investigation.  China urged the EU to reconsider its findings in the final determination.
  
  The EU said it disagreed with both Russia and China and that it was confident its investigations were fully conducted in line with WTO requirements.

• Six WTO members took the floor to question India about its recent anti-dumping actions.  China said it was concerned about recent Indian practices, noting that 18 AD investigations had been initiated against Chinese imports in 2016 alone.  China said it was particularly concerned about an Indian practice called “complete value chains,” whereby it asks all companies in an exporting chain — including both related and unrelated companies — to respond to questionnaires in an investigation.  Both Japan and Ukraine questioned several aspects of India’s investigation into Japanese and Ukrainian cold-rolled steel which resulted in a preliminary determination of dumping last August and which they said were inconsistent with WTO rules, while Qatar said India’s ongoing AD investigation on benzene violated several procedural requirements and failed to demonstrate injury to domestic producers of linear alkyl benzene in India.  The EU said it had “serious doubts” about India’s decision to launch an AD investigation on styrene butadiene rubber and urged it to wrap up the investigation without imposing any measure.
  
  India said it would pass on the concerns to its capital and respond later.

• Turkey criticized AD duties imposed on Turkish imports by, among others, 1) the Dominican Republic on steel rods and bars for concrete reinforcement 2) Indonesia on wheat flour 3) Israel on float glass 4) Thailand on hot-rolled steel and 5) China on acrylic fibre.  Turkey questioned the reasons for the initiation of the investigations or imposition of duties in each of the cases. 
  
  Turkey was also criticized by Ukraine and Chinese Taipei for longstanding AD measures imposed on various imports.  Ukraine hit out at Turkey’s AD duties on copper wire rod, which has been in place for more than 10 years, while Chinese Taipei expressed specific concern about AD measures on motorcycles and bicycle tires which were extended by Turkey in July and August this year.  The Russian Federation also questioned Turkey over reports that its steel industry had requested a new investigation of hot-rolled coil steel from Russia, following the withdrawal of a similar petition by the industry in April.
  
  Turkey responded that there was no limit under WTO rules regarding the duration of an AD measure as long as the investigation authority determines beforehand that the lifting of the duties would be likely to lead to the continuation or reoccurrence of dumping in line with Article 11.3 of the WTO’s Anti-Dumping Agreement (ADA).

• Japan once again voiced concerns over longstanding AD measures imposed by the United States on imported Japanese products.  There are currently 70 measures in place, including six in force more than 20 years and one that has been in place longer than 37 years, Japan said.  Japan noted that an Appellate Body ruling made it clear that an AD measure can be extended beyond the normal 5-year limit only if the authorities determine further dumping is probable, not plausible. 
  
  The United States responded that there was no justification for Japan’s “chronic” complaints.  The measures are being applied in accordance with WTO rules, and of 64 measures against Japan that were reviewed, 80% were removed, the United States said.  It noted that for the oldest measures, the targeted Japanese firms refused to participate in the AD reviews, resulting in the continuation of the measures.
  
  Separately, Brazil cited specific concerns about an investigation initiated by the United States on imported hot-rolled and cold-rolled steel.  It echoed Japan’s concerns about the rising use of trade defence measures in the steel sector and said the trend was currently increasing.

• Russia challenged Australia over its AD investigation on ammonium nitrate, and in particular the finding by its authorities that Russian producers benefitted from artificially low gas prices, thus prompting the use of gas prices charged at the German border to determine the domestic cost of production, or “normal value,” of ammonium nitrate.  Russia said the Appellate Body’s recent ruling in the EU-Biodiesel case made it clear that the cost of production should be based on records kept by producers. 
  
  Australia said these concerns were taken into account in the anti-dumping commission’s final report, and that no interested party had sought a review of the conclusions in the 30-day response period.

• Ukraine challenged investigations by the Russian Federation which led to the imposition of AD duties on bars and rods and ferrosilicon manganese from Ukraine as well as a new investigation on hot-rolled steel.  Russia said its actions were in accordance with WTO rules.

China’s Protocol of Accession

China once again reminded members that provisions under Section 15 of its 2001 Protocol of Accession to the WTO relating to the “surrogate” methodology in anti-dumping investigations will expire on 11 December 2016. According to these provisions, when Chinese producers cannot clearly show that market economy conditions prevail, an investigating authority may use a surrogate (or analogue) country methodology that, according to China, results in much higher prices than those reported by Chinese producers (and thus higher anti-dumping duties).  Once this expires, China said, members will not be allowed to use this surrogate methodology and must conduct their investigations in compliance with the general rule fixed under the ADA and use Chinese prices or costs as the basis for calculating the dumping margin.  China said it appreciated the commitment of many members to abandon this practice in advance and asked that those still using the surrogate methodology honour their WTO obligations and terminate the use of the surrogate methodology on time.

The United States said that contrary to China’s assertion, the language in the Protocol does not require members to stop using the analogue country methodology in AD investigations; China’s interpretation would deprive the provisions of the protocol that do not expire of any meaning.  In order to resolve this, the United States and China should work together to accelerate progress towards an economy in China that is more market-determined so as to avoid continuing this debate in the WTO, the United States said.

Mexico noted there were differences between members on this issue and asked China whether there was room for dialogue on the issue or whether China only considered that other countries should stop using the surrogate methodology. China said there was plenty of dialogue on the issue when it was negotiated 15 years ago and that now was not the appropriate time to be having that dialogue again; it was time for members to start fulfilling their obligations under the Protocol.  China added it was ready to discuss with members how to fulfil their commitments under the Protocol before 11 December.