DISPUTE SETTLEMENT

DS: United States — Countervailing Duties on Certain Carbon Steel Products from Brazil

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.

  

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Key facts

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(as cited in request for consultations)
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Summary of the dispute to date

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Consultations

Complaint by Brazil.

On 21 December 2000, Brazil requested consultations with the US concerning an aspect of US countervailing duty practice and the imposition of countervailing duties on certain carbon steel products originating in Brazil. Brazil is concerned with the practice of the US of applying its countervailing duty laws so as to consistently find that privatized companies benefit from pre-privatization subsidy benefits, and the unwillingness of the United States to bring its practice into conformity with the SCM Agreement. In addition, Brazil is concerned with the results of a continued imposition of an order and a final countervailing duty decision by the US based on a finding that the benefits from equity infusions provided to companies prior to their privatization are passed through to the companies following a change in ownership and control.

Brazil considered that findings that three companies were benefiting from subsidies provided prior to their privatization are in breach of Articles 1.1(b), 10, 14, 19 and 21 of the SCM Agreement, in so far as they are based on supposed benefits from equity infusions granted to the companies prior to their privatization. In addition, Brazil considers that the decision not to terminate the investigation is in breach of Article 11.9 of the SCM Agreement. Brazil notes that the Commerce Department relied on the same analysis of subsidization following a privatization, which was found to be inconsistent with WTO obligations by the Appellate Body in US Ś Lead and Bismuth II.

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