DISPUTE SETTLEMENT

DS: United States — Anti-Dumping Administrative Reviews and Other Measures Related to Imports of Certain Orange Juice 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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Summary of the dispute to date

The summary below was up-to-date at

Consultations

Complaint by Brazil. 

On 27 November 2008, Brazil requested consultations with regard to:

  1. certain determinations of the United States Department of Commerce (USDOC) concerning the imports of certain orange juice from Brazil;
     
  2. any actions taken by United States Customs and Border Protection (USCBP) to collect definitive anti-dumping duties at duty assessment rates established in periodic reviews covered by the preceding paragraph, including through the issuance of USCBP liquidations instructions and notices; and
     
  3. certain US laws, regulations, administrative procedures, practices and methodologies.

Brazil is concerned that these laws, regulations, administrative procedures, practices and methodologies are as such, and as applied in the determinations and actions identified above, inconsistent with the obligations of the United States under the WTO Agreement and the Agreements annexed thereto.  Brazil alleges that the provisions with which these measures appear to be inconsistent include, but are not limited to Articles II, VI:1 and VI:2 of the GATT 1994, Articles 1, 2.1, 2.4, 2.4.2, 9.1, 9.3, 11.2 and 18.4 of the Anti-Dumping Agreement, and Article XVI:4 of the WTO Agreement.

On 10 December 2008, Japan requested to join the consultations.

On 22 May 2009, Brazil requested further consultations with regard to complementary matters.  Brazil considers that these complementary measures are inconsistent with:

  • Articles II, VI:1 and VI:2 of the GATT 1994;
     
  • Articles 1, 2.1, 2.4, 2.4.2, 9.1, 9.3, 11.2 and 18.4 of the Anti-Dumping Agreement; and
     
  • Article XVI:4 of the WTO Agreement.

On 5 June 2009, Japan requested to join the further consultations.

On 20 August 2009, Brazil requested the establishment of a panel.  At its meeting on 31 August 2009, the DSB deferred the establishment of a panel.

 

Panel and Appellate Body proceedings

At its meeting on 25 September 2009, the DSB established a panel.  Argentina, the European Communities, Japan, Korea, Thailand and Chinese Taipei reserved their third-party rights.  Subsequently, Mexico reserved its third-party rights. On 29 April 2010, Brazil requested the Director-General to compose the panel.  On 10 May 2010, the Director-General composed the panel. On 19 July 2010, the Chairman of the panel informed the DSB that it would not be possible for the panel to complete its work in six months in light of scheduling conflicts.  The panel expected to complete it work in February 2011.

On 25 March 2011, the panel report was circulated to Members.

  1. In this dispute, Brazil challenged the 2005-2007 and 2007-2008 anti-dumping duty administrative reviews conducted by the United States Department of Commerce (“USDOC”) on imports of certain orange juice from Brazil (“the First and Second Administrative Reviews”), as well as the USDOC's continued use of “zeroing procedures” in successive anti-dumping proceedings, in relation to the anti-dumping duty order issued in respect of imports of certain orange juice from Brazil.
     
  2. Brazil claimed that the United States' use of “zeroing” to determine the weighted average margins of dumping (relied upon to set cash deposit rates) and the importer-specific assessment rates of two respondents in the First and Second Administrative Reviews was inconsistent with Articles 2.4, 2.4.2 and 9.3 of the AD Agreement, and Article VI:2 of the GATT 1994.  In addition, Brazil claimed that the USDOC's “continued use” of “zeroing” in successive proceedings under of the orange juice anti-dumping duty order amounted to “ongoing conduct” that is inconsistent with Articles 2.4, 2.4.2 and 9.3 of the AD Agreement and Article VI:2 of the GATT 1994.
     
  3. The Panel found the United States had acted inconsistently with Article 2.4 of the AD Agreement when the USDOC used “zeroing” to determine margins of dumping (relied upon to set cash deposit rates) and importer-specific assessment rates in the First and Second Administrative Reviews.  Likewise, the Panel concluded that the United States' “continued use“ of “zeroing” under the orange juice anti-dumping duty order was inconsistent with Article 2.4 of the AD Agreement.  The Panel considered it was unnecessary, for the purpose of satisfactorily resolving the dispute, to make additional findings with respect to Brazil's claims that the same measures were also inconsistent with Articles 2.4.2 and 9.3 of the AD Agreement and Article VI:2 of the GATT 1994.  On this basis, the Panel decided to exercise judicial economy and declined to make any findings in respect of these claims.  The Panel recommended that the DSB request the United States to bring its measures into conformity with its obligations under the AD Agreement.
     
  4. The panel report addresses two main issues: (i) the use of “zeroing” by the USDOC in the First and Second Administrative Reviews; and (ii) the notion of “continued zeroing”.  With respect to the latter issue, the Panel examined whether the “continued use” of “zeroing” as “ongoing conduct” is a “measure” susceptible to WTO dispute settlement.  The Panel noted that, conceptually, the alleged “measure” challenged by Brazil appeared to be very similar, if not identical, to the “ongoing conduct” measure that was the subject of the European Communities' complaint in US — Continued Zeroing.  The Panel described this measure as conduct that is currently taking place and is likely to continue in the future, recalling that the Appellate Body in US — Continued Zeroing had found that such a measure was susceptible to WTO dispute settlement. 

On 8 April 2011, Brazil and the United States requested the DSB to adopt a draft decision extending the 60-day time period stipulated in Article 16.4 of the DSU, to 17 June 2011.  At its meeting on 21 April 2011, the DSB agreed that, upon a request by Brazil and the United States, the DSB, shall no later than 17 June 2011, adopt the panel report, unless the DSB decides by consensus not to do so or Brazil or the United States notifies the DSB of its decision to appeal pursuant to Article 16.4 of the DSU.

At its meeting on 17 June 2011, the DSB adopted the panel report.

 

Reasonable period of time

On 17 June 2011, Brazil and the United States notified the DSB that they had agreed that the reasonable period of time for the United States to implement the DSB recommendations and rulings shall be 9 months.  Accordingly, the reasonable period of time expired on 17 March 2012.

 

Implementation of adopted reports

At the DSB meeting on 19 December 2011, the United States informed the DSB that the US Department of Commerce was continuing its work on the December 2010 proposal to change the calculation of weighted average dumping margins and assessment rates in certain anti‑dumping proceedings.  At the DSB meeting on 23 March 2012, the United States reported that following a five year sunset review, the USITC recently made a determination to revoke the existing anti-dumping order on orange juice as of 9 March 2011.  Brazil said it was still assessing whether the US implementation measure would resolve the dispute or whether it would need to pursue its rights through implementation and retaliation panels.

On 3 April 2012, Brazil and the United States informed the DSB of Agreed Procedures regarding Articles 21 and 22 of the DSU.

 

Settled or terminated

On 14 February 2013, the United States and Brazil informed the DSB of a mutually satisfactory solution to this dispute.  The parties noted that in their Understanding of 3 April 2012, they had agreed to consult before the end of 2012 in order to achieve a resolution to the dispute.  As a result of these consultations, the parties had reached a mutually satisfactory solution.

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