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United States Wins WTO Steel Dispute with China

06/15/2012

06/15/2012

Washington, D.C. – United States Trade Representative Ron Kirk announced today that the United States has prevailed in a World Trade Organization (WTO) dispute regarding China’s imposition of anti-dumping and countervailing duties on grain-oriented flat-rolled electrical steel (GOES) from the United States. A WTO dispute settlement panel sided with the United States, finding that China conducted an investigation and applied duties in a manner inconsistent with numerous obligations under the Subsidies and Countervailing Measures Agreement, and Anti-Dumping Agreement. Ambassador Kirk applauded the WTO panel’s decision, lauding the ruling as a success in ensuring China’s compliance with its WTO commitments.

“Today’s victory is important not only for steelworkers in Pennsylvania and Ohio, but also for American farmers and workers in other sectors that export to China. The panel upheld our claims that China’s duties on U.S. exports of steel products failed to comply with many WTO rules. This decision sends another clear signal to China that it must do more to fulfill its WTO commitments, and that it will be held accountable to play by WTO rules," said Ambassador Kirk.

See a copy of the Panel’s report here: http://www.wto.org/english/news_e/news12_e/414r_e.htm.

Background:

On September 15, 2010, the United States requested dispute settlement consultations with China concerning its imposition of duties on GOES from the United States. U.S. manufacturers of GOES are located in Pennsylvania and Ohio, and the duties affect a substantial amount of United States trade in U.S. steel products. After consultations failed to resolve the matter, the WTO established the panel in March 2011.

The United States alleged that China improperly initiated countervailing duty investigations involving several U.S. laws. The United States also challenged the manner in which China conducted its investigation, alleging that China violated numerous procedural and due process obligations, impairing the ability of the United States and U.S. companies to defend their interests. The United States also alleged that China’s finding of injury to its domestic industry was unsupported by the evidence on the record.

The Panel’s favorable decision regarding China’s unfair anti-dumping and countervailing duties on U.S.-manufactured GOES is notable in many regards. The decision confirms that China must do more to meet its transparency and due process commitments. This decision also carries the potential to strengthen future challenges to China’s trade remedy tactics. The Panel found that China breached its WTO obligations by:

• Initiating countervailing duty investigations based on insufficient evidence;

• Failing to provide non-confidential summaries of Chinese submissions containing confidential information;

• Calculating the subsidy rates for U.S. companies in a manner unsupported by the facts;

• Calculating the “all others” subsidy and dumping rates without a substantiated basis;

• Failing to provide an adequate explanation of its conclusions;

• Failing to disclose essential facts underlying its conclusions;

• Failing to objectively examine the evidence on the record; and

• Making unsupported findings of injury to China’s domestic industry.