DS: United States — Countervailing Duties on Certain Corrosion-Resistant Carbon Steel Flat Products from Germany

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Current status

 

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Key facts

 

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Latest document

  

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Summary of the dispute to date

The summary below was up-to-date at

Consultations

Complaint by the European Communities.

On 10 November 2000, the EC requested consultations with the US in respect of countervailing duties imposed by the US on imports of certain corrosion-resistant carbon steel flat products (“corrosion resistant steel”), dealt with under US case number C-428-817. This dispute related, in particular, to the final results of a full sunset review of the above measure, carried out by the US Department of Commerce (“DOC”) and published in the US Federal Register No. 65 FR 47407 of 2 August 2000. In this decision, the DOC found that revocation of the countervailing duty order would be likely to lead to continuation or recurrence of a countervailable subsidy. The EC considered that this finding is inconsistent with the obligations of the US under the SCM Agreement and, in particular, in breach of Articles 10, 11.9 and 21 (notably 21.3) thereof.

 

Panel and Appellate Body proceedings

On 5 February 2001, the EC requested further consultations. As the consultations failed, a panel was established by the DSB on 10 September 2001 further to the request of the EC. Japan and Norway reserved their third-party rights. On 18 October 2001, the EC requested the Director-General to determine the composition of the Panel. On 26 October 2001, the Director-General composed the Panel. On 12 April 2002, the Chairman of the Panel informed the DSB that the Panel would not be able to complete its work within six months due to the parties’ wish to use the maximum time periods prescribed in Appendix 3 of the DSU. The Panel expected to complete its work by July 2002.

On 3 July 2002, the Panel circulated its report to Members. The Panel concluded that:

• US CVD law and the accompanying regulations are consistent with Article 21, paragraphs 1 and 3, and Article 10 of the SCM Agreement in respect of the application of evidentiary standards to the self-initiation of sunset reviews;
   
• US CVD law and the accompanying regulations are inconsistent with Article 21.3 of the SCM Agreement in respect of the application of a 0.5 per cent de minimis standard to sunset reviews, and therefore violate Article 32.5 of the SCM Agreement and, consequently, also Article XVI:4 of the WTO Agreement;
   
• the United States, in applying a 0.5 per cent de minimis standard to the instant sunset review, acted in violation of Article 21.3 of the SCM Agreement;
   
• US CVD law and the accompanying regulations and statement of policy practices are consistent with Article 21.3 of the SCM Agreement in respect of the obligation to determine the likelihood of continuation or recurrence of subsidisation in sunset reviews; and
   
• the United States, in failing to determine properly the likelihood of continuation or recurrence of subsidisation in the sunset review on carbon steel, acted in violation of Article 21.3 of the SCM Agreement.

The Panel recommended that the DSB request the United States to bring its measures mentioned in paragraphs (b), (c) and (e) into conformity with its obligations under the WTO Agreement.

One member of the Panel dissociated himself from the Panel assessment relating to the US CVD law as such and as applied in the sunset review on carbon steel in respect of application of a de minimis standard to sunset reviews. This member did not share the view of the majority of the Panel that the silence in Article 21.3 of the SCM Agreement as to the applicability of a de minimis standard to sunset reviews means that this standard applies to sunset reviews. Accordingly, and contrary to the Panel’s above findings, this member concluded that:

• US CVD law and the accompanying regulations are consistent with Article 21.3 of the SCM Agreement in respect of the application of a 0.5 per cent de minimis standard to sunset reviews; and
   
• the United States, in applying a 0.5 per cent de minimis standard to the instant sunset review, did not act in violation of Article 21.3 of the SCM Agreement.

On 30 August 2002, the US notified its decision to appeal to the Appellate Body certain issues of law covered in the Panel report. The Report was circulated to Members on 28 November 2002. The Appellate Body:

• upheld Panel findings relating to the Panel’s terms of reference; the consistency of United States law with obligations relating to the self-initiation of sunset reviews by domestic authorities; and the consistency of United States law with obligations relating to the determination to be made in a sunset review;
   
• reversed the Panel’s interpretation of Article 21.3 of the Agreement on Subsidies and Countervailing Measures as regards de minimis subsidization in sunset reviews. Accordingly, the Appellate Body also reversed the related Panel findings that United States law, as such and as applied, were inconsistent with that provision.

On 19 December 2002, the DSB adopted the Appellate Body Report and the Panel Report, as modified by the Appellate Body Report.

 

Implementation of adopted reports

The US had fully implemented the DSB’s recommendations and rulings on 1 April 2004 by revoking the countervailing duty order on corrosion-resistant carbon steel flat products from Germany.

At the DSB meeting on 20 April 2004, the United States informed that the US had fully implemented the DSB’s recommendations and rulings.