DISPUTE SETTLEMENT

DS: United States — Safeguard measure on imports of large residential washers

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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Current status

 

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Key facts

 

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Summary of the dispute to date

The summary below was up-to-date at

Consultations

Complaint by Korea

On 14 May 2018, Korea requested consultations with the United States concerning definitive safeguard measures imposed by the United States on imports of large residential washers.

Korea claimed that the measures appear to be inconsistent with:

  • Articles 1, 2.1, 2.2, 3.1, 3.2, 4.1, 4.2, 5.1, 7.1, 7.4, 8.1, 12.1, 12.2 and 12.3 of the Agreement on Safeguards; and
     
  • Article I:1, II, X:3 and XIX:1(a) of the GATT 1994.

On 25 May 2018, Thailand requested to join the consultations. Subsequently, the United States informed the DSB that it had accepted the request of Thailand to join the consultations.

 

Panel and Appellate Body proceedings

On 14 August 2018, Korea requested the establishment of a panel. At its meeting on 27 August 2018, the DSB deferred the establishment of a panel.

At its meeting on 26 September 2018, the DSB established a panel. Brazil, China, the European Union, Egypt, India, Japan, Kazakhstan, Mexico, Norway, the Russian Federation, Thailand and Viet Nam reserved their third-party rights.

On 20 June 2019, Korea requested the Director-General to compose the panel. On 1 July 2019, the Director-General composed the panel.

On 9 December 2019, the Chair of the panel informed the DSB that the beginning of the panel's work had been delayed as a result of a lack of available experienced lawyers in the Secretariat. The Chair's communication indicated that the panel expected to issue its final report to the parties in the first quarter of 2021. On 26 March 2021, the Chair of the panel informed the DSB that due to the global COVID-19 pandemic, the panel was unable to organize in-person meetings with the parties in 2020, and that although the panel explored the possibility of holding the first substantive meeting through virtual and other means in 2020 itself, in light of the views of the parties, the panel decided not to do so. The Chair of the panel apprised the DSB that due to the resulting delay in the panel proceedings, the panel expected to issue its final report to the parties by the end of 2021.

On 8 February 2022, the panel report was circulated to Members.

FACTUAL BACKGROUND

The dispute concerns the definitive safeguard measure imposed by the United States on imports of large residential washers (LRWs), as well as certain parts of such LRWs. The United States imposed this measure following a determination made by the United States International Trade Commission (USITC) pursuant to its investigation.

The Panel's findings

With respect to Korea's claims challenging the absence of a reasoned and adequate explanation on “unforeseen developments” and the “obligations incurred” by the United States, which would have resulted in the alleged increased imports of LRWs causing serious injury, the Panel found that the USITC acted inconsistently with Article XIX:1(a) of the GATT 1994 and Article 3.1 of the Agreement on Safeguards because its report did not contain a reasoned and adequate explanation on “unforeseen developments” and the “obligations incurred” by the United States, within the meaning of Article XIX:1(a) of the GATT 1994.

Regarding Korea's claims challenging the USITC's definition of the domestic industry, the Panel found that the USITC acted inconsistently with Article 4.1(c) of the Agreement on Safeguards because it included LRW parts in the definition of the domestic industry based on (1) its finding of likeness but no competitive relationship between imported and domestically produced LRW parts; and (2) how it applied a “product line” approach.

With regard to Korea's claims challenging the USITC's finding on imports in increased quantities within the meaning of Article 2.1 of the Agreement on Safeguards, the Panel found that the USITC acted inconsistently with Articles 2.1 and 3.1 of the Agreement on Safeguards because it failed to provide a reasoned and adequate explanation in support of its finding on increased imports.

With respect to Korea's claims challenging the USITC's serious injury finding, the Panel found that the USITC acted inconsistently with Articles 4.2(a) and 3.1 of the Agreement on Safeguards by failing to provide a reasonable and adequate explanation of the reasons for excluding the profit and loss data of the producer of belt‑driven washers from the profit data used to determine the profitability of the domestic industry. With regard to Korea's claims challenging the USITC's causation determination, the Panel found that the USITC acted inconsistently with Articles 3.1 and 4.2(b) of the Agreement on Safeguards because (1) it did not provide a reasoned and adequate explanation in support of its finding that subject imports depressed and suppressed prices of the domestic like product as a whole; and (2) its finding on coincidence in trends relied on the price analysis that the panel had found to be inconsistent with Article 4.2(b).

As regards Korea's claims under Articles 8.1 and 12.3 of the Agreement on Safeguards, the Panel found that the United States acted inconsistently with Article 12.3 because it failed to provide Korea with adequate opportunities for prior consultations under Article 12.3 of the Agreement on Safeguards. The Panel also found that as a consequence of this violation under Article 12.3, the United States had acted inconsistently with Article 8.1 of the Agreement on Safeguards.

The Panel either rejected, or found it unnecessary to address all other claims brought by Korea in this dispute. These include claims brought under Articles 5.1, 7.1, 12.1, 12.2, and 11.1(a) of the Agreement on Safeguards as well as II.1 of the GATT 1994. In addition, the Panel, while upholding some aspects of Korea's claims under Articles 2.1, 3.1, 4.1(c), 4.2(a) and 4.2(b) of the Agreement on Safeguards, as set out above, either rejected, or found it unnecessary to address, several other aspects of its claims under these provisions. 

On 28 March 2022, Korea and the United States requested the DSB to adopt a decision that the DSB shall no later than 7 July 2022 adopt the report of the panel in this dispute unless (i) the DSB decides by consensus not to do so or (ii) either party to the dispute notifies the DSB of its decision to appeal pursuant to Article 16.4 of the DSU. At its meeting on 8 April 2022, the DSB agreed to this joint request to provide the additional time for the adoption or appeal of the panel report. At its meeting on 7 July 2022, following a joint request from Korea and the United States dated 24 June 2022, the DSB extended this deadline to 5 October 2022. At its meeting on 5 October 2022, following a joint request from Korea and the United States dated 22 September 2022, the DSB further extended this deadline, to 20 December 2022.

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