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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(as cited in request for consultations)
|Request for Consultations received:|
|Panel Report circulated:||6 November 2018|
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Summary of the dispute to date
The summary below was up-to-date at
Complaint by Japan
On 20 December 2016, Japan requested consultations with India concerning certain measures imposed by India on imports of iron and steel products into India.
Japan claimed that the measures appear to be inconsistent with:
- Articles 2.1, 3.1, 4.1(a), 4.1(b), 4.1(c), 4.2(a), 4.2(b), 4.2(c), 5.1, 7.1, 11.1(a), 12.1, 12.2, 12.3 and 12.4 of the Agreement on Safeguards; and
- Articles I:1, II:1(b), XI:1 and XIX:1(a) of the GATT 1994.
On 17 January 2017, Chinese Taipei requested to join the consultations. On 18 January 2017, the Russian Federation requested to join the consultations. On 19 January 2017, Ukraine requested to join the consultations.
Panel and Appellate Body proceedings
On 9 March 2017, Japan requested the establishment of a panel. At its meeting on 21 March 2017, the DSB deferred the establishment of a panel. At its meeting on 3 April 2017, the DSB established a panel. Australia, China, the European Union, Indonesia, Kazakhstan, Korea, Oman, Qatar, the Russian Federation, Singapore, Chinese Taipei, Ukraine, the United States and Viet Nam reserved their third-party rights.
On 12 June 2017, Japan requested the Director-General to compose the panel. On 22 June 2017, the Director-General composed the panel.
On 22 May 2018, the Chair of the panel informed the DSB that the panel expected to issue its final report to the parties by the second half of 2018. In its communication, the Chair also informed the DSB that the report would be available to the public once it was circulated to the Members in all three official languages, and that the date of circulation depended on completion of translation.
This dispute between Japan and India concerned a safeguard measure imposed by India on imports of certain steel products. Japan claimed that the measure at issue was inconsistent with various provisions of the Agreement on Safeguards and the GATT 1994.
Japan challenged different aspects of the Indian competent authority's determination relating to: unforeseen developments and the effect of GATT obligations; increased imports; the definition of domestic industry; serious injury or threat thereof; causal link between increased imports and serious injury caused to the domestic industry; other factors causing injury to the domestic industry simultaneously with increased imports; the level of duties imposed; and the duration of the safeguard measure. Japan also made procedural claims regarding the obligation to notify the WTO Committee on Safeguards and to provide an adequate opportunity for prior consultations. In addition, Japan claimed that the measure at issue was inconsistent with Article I of the GATT 1994 and Article II:1(b), second sentence, of the GATT 1994.
As a preliminary matter, the Panel addressed India's request that since the measure at issue had expired, Japan's complaint was incompatible with Article 3.7 of the DSU. The Panel found that in the circumstances of the present case, the expiry of the measure after the establishment of the Panel did not excuse the Panel from exercising its function under Article 11 of the DSU to make findings with respect to the matter raised by Japan, as well as to make recommendations to the extent that the measure continued to have any effects.
Before addressing Japan's substantive and procedural claims, the Panel considered whether the measure at issue constituted a safeguard measure within the meaning of Article XIX of the GATT 1994 and the Agreement on Safeguards. The Panel considered that the measure resulted in a suspension of India's obligations under the GATT 1994, namely Article II:1(b), second sentence, and was designed to remedy an alleged situation of serious injury to the domestic industry brought about by an increase in imports of certain steel products. The Panel thus concluded that the measure at issue constituted a safeguard measure and that the provisions of Article XIX of the GATT 1994 and the Agreement on Safeguards were applicable to the dispute.
With respect to Japan's substantive claims, the Panel's main findings were:
- India acted inconsistently with Article XIX:1(a) of the GATT 1994, by failing to demonstrate that the unforeseen developments and the effect of GATT obligations resulted in an increase in imports of the product concerned causing or threatening to cause serious injury to the relevant domestic industry in India.
- India acted inconsistently with Articles 2.1 and 4.2(a) of the Agreement on Safeguards and Article XIX:1 of the GATT 1994, by failing to evaluate the rate and amount of the increase in imports on the basis of objective data, when it analysed the increase in imports at least partly on annualized data, and by failing to objectively examine the trends in imports.
- Japan did not demonstrate that India failed to meet the requirement of “a major proportion” of the total domestic production of the product concerned under Article 4.1(c) of the Agreement on Safeguards, when it defined the domestic industry.
- India acted inconsistently with Articles 4.1(a) and 4.2(a) of the Agreement on Safeguards, by failing to properly evaluate and sufficiently explain the changes in import prices and their effect on the domestic industry's prices and therefore on profitability. The Panel, however, rejected Japan's arguments that the Indian competent authority failed to assess the captive segment of the market, when it evaluated the share of the domestic market taken by increased imports. The Panel also rejected Japan's argument that India failed to provide any explanation regarding the positive trends in certain injury factors.
- India acted inconsistently with Articles 4.1(b) and 4.2(a) of the Agreement on Safeguards, because its finding of a threat of serious injury was not adequately addressed or analysed in the Final Findings.
- India acted inconsistently with Article 4.2(b) of the Agreement on Safeguards, by failing to demonstrate the existence of a causal link between the increased imports and serious injury suffered by the domestic industry, and by failing to conduct a proper non-attribution analysis.
- India acted inconsistently with Articles 3.1 and 4.2(c) of the Agreement on Safeguards, by failing to provide reasoned conclusions on all pertinent issues of fact and law.
With regard to procedural claims, the Panel's main findings were:
- Japan did not demonstrate that India acted inconsistently with Articles 12.1(a), (b) and (c) and 12.2 of the Agreement on Safeguards, with respect to the notifications to the Committee on Safeguards of the initiation of a safeguard investigation relating to serious injury or threat thereof, the findings of serious injury in the investigation, and the decision to apply a definitive safeguard measure.
- India acted inconsistently with Article 12.2 of the Agreement on Safeguards, by failing to provide the Committee on Safeguards with a precise description of the product involved and a precise description of the proposed measure.
- India acted inconsistently with Article 12.3 of the Agreement on Safeguards, by failing to provide Japan, and other Members with a substantial export interest in the product subject to the proposed safeguard measure, with an adequate opportunity for prior consultations with a view to reviewing all pertinent information.
- India acted inconsistently with Article 12.4 of the Agreement on Safeguards, by failing to notify the Committee on Safeguards before taking the provisional safeguard measure at issue.
The Panel exercised judicial economy on several claims, including Japan's claim on Articles 5.1 and 7.1 of the Agreement on Safeguards with respect to the duration of the safeguard measure and the level of the duties imposed.
On 14 December 2018, India notified the DSB of its decision to appeal to the Appellate Body certain issues of law and legal interpretations in the panel report. On 21 December 2018, Japan notified the DSB of its decision to cross-appeal.
On 12 February 2019, upon expiry of the 60-day period provided for in Article 17.5 of the DSU, the Appellate Body informed the DSB that it would not be able to circulate the Appellate Body report in this appeal by the end of the 60-day period, nor within the 90-day time-frame provided for in Article 17.5 of the DSU. The Appellate Body referred to the size of the panel record and the complexity of issued that had been appealed. The Appellate Body also noted the backlog of appeals pending with the Appellate Body at present, and the fact that all appeals filed since 1 October 2018 were composed of the same three remaining Appellate Body Members. In its communication the Appellate Body indicated that, as communicated to the participants, it would not be possible to staff this appeal for some time, and expressed appreciation for the participants' understanding. The Appellate Body informed the DSB that the Appellate Body would communicate appropriately with participants as soon as it knew more precisely when the Division can schedule the hearing in this appeal.
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