Complaint by China.
On 19 September 2008, China requested consultations concerning the definitive anti-dumping and countervailing duties imposed by the United States pursuant to the final anti-dumping and countervailing duty determinations and orders issued by the US Department of Commerce in several investigations.
China considers that these measures, which include the conduct of the underlying anti-dumping and countervailing duty investigations, are inconsistent with the obligatins of the United States under, inter alia, Articles I and VI of the GATT 1994, Articles 1, 2, 10, 12, 13, 14, 19 and 32 of the SCM Agreement, Articles 1, 2, 6, 9 and 18 of the Anti-Dumping Agreement, and Article 15 of the Protocol on the Accession of the People's Republic of China (the Protocol of Accession).
On 9 December 2008, China requested the establishment of a panel. At its meeting on 22 December 2008, the DSB deferred the establishment of a panel. At its meeting on 20 January 2009, the DSB established a panel. Argentina, Australia, Bahrain, Canada, the European Communities, Kuwait, Saudi Arabia and Turkey reserved their third-party rights.
On March 4, 2009, the Director General composed the panel. The panel held meetings with the parties on July 7-8 and November 11-12, 2009, and met with the parties and third parties on July 7, 2009.
The panel circulated its report on October 22, 2010. The panel found in favor of the United States in several respects, including that the concurrent application of antidumping duties calculated using a nonmarket economy (NME) methodology and countervailing duties to imports from China resulting from the investigations at issue was not inconsistent with the WTO obligations of the United States. The panel also made several other findings related to claims China advanced against countervailing duty determinations made by Commerce, including that Chinese state owned enterprises (SOEs) and state owned commercial banks (SOCBs) can be “public bodies” capable of providing financial contributions, that the United States did not act inconsistently with its WTO obligations by finding that the SOEs and SOCBs in question were “public bodies” in the investigations under review, and that Commerce correctly determined to use external benchmarks, rather than private prices in China, to measure the benefit of goods, loans, and land use rights provided by the government. On the other hand, it found that: Commerce’s calculation of the benefit of government provided rubber and preferential lending was not consistent with U.S. WTO obligations, that, with respect to loans, Commerce’s use of an annual average lending rate as a benchmark was impermissible, and on specificity, that the evidence on the record of the investigation did not support Commerce’s determination that the government provision of land use rights was specific to companies within a particular industrial zone. Finally, the panel found that Commerce did not properly rely on facts available when making its subsidy determinations in two investigations. Consequently, the panel recommended that the United States bring the measures into conformity with the WTO agreements.
On December 1, 2010, China filed a notice of appeal of certain of the panel’s findings. China contended that: (1) the panel erred in its interpretation and application of the term “public body” in Article 1 of the SCM Agreement; (2) the panel erred in its interpretation and application of Article 2 of the SCM Agreement regarding Commerce’s specificity determinations; (3) the panel erred in its interpretation and application of Article 14(d) of the SCM Agreement and its finding that Commerce’s determination to reject in country private prices as benchmarks for measuring the benefit of government provided hot rolled steel was not inconsistent with that provision was erroneous; (4) the panel erred in its interpretation and application of Article 14(b) of the SCM Agreement and its finding that the benchmark Commerce used to measure the benefit of government provided loans was not inconsistent with that provision was erroneous; and (5) the panel erred in concluding that the concurrent application to imports from China of countervailing duties and antidumping duties calculated using an NME methodology was not inconsistent with the WTO obligations of the United States. The Appellate Body conducted an oral hearing on these issues on January 13-14, 2011.
The Appellate Body circulated its report on March 11, 2011. The Appellate Body reversed the panel’s finding with respect to the concurrent application of antidumping duties calculated using a NME methodology and countervailing duties to imports from China, finding that the United States acted inconsistently with Article 19.3 of the SCM Agreement by failing to examine whether a “double remedy” arose from such concurrent application and by failing to avoid any such “double remedy.” The Appellate Body also reversed the panel’s finding with respect to the meaning of “public body” in Article 1.1(a)(1) of the SCM Agreement, finding that the term “public body” means an entity that possesses, exercises, or is vested with governmental authority. Using this definition, the Appellate Body completed the analysis and found that Commerce’s public body determinations with respect to SOEs were inconsistent with Article 1.1(a)(1), while Commerce’s public body determinations with respect to SOCBs were not inconsistent with Article 1.1(a)(1). The Appellate Body also upheld the panel’s findings with respect to Commerce’s use of external benchmarks and Commerce’s specificity determinations.
On March 25, 2011, the DSB adopted its recommendations and rulings in this dispute. At the following DSB meeting, on April 21, 2011, the United States informed the DSB of its intention to implement the recommendations and rulings of the DSB in connection with this matter. The United States and China agreed that the reasonable period of time for the United States to implement the recommendations and rulings of the DSB would end on February 25, 2012. On January 17, 2012, the United States and China notified the DSB of their agreement to extend the RPT by 60 days, to expire on April 25, 2012.
On July 31, 2012, Commerce issued to interested parties final determinations pursuant to section 129(b)(2) of the URAA with respect to issues in this dispute. On August 21, 2012, USTR directed Commerce to implement its final determinations. On August 30, 2012, a notice was published in the Federal Register announcing the implementation of Commerce’s final determinations, effective August 21, 2012. That notice can be found at 77 FR 52683. On August 31, 2012, the United States reported to the DSB that it has brought the measures at issue in this dispute into full compliance with the DSB recommendations and rulings.
| Brief Date | Brief Description |
|---|---|
| 12/18/2010 | U.S. Comments on China's Answers to the Panel's Second Set of Questions |
| 12/08/2009 | U.S. Answers to the Panel's Second Set of Questions |
| 11/23/2009 | Executive Summary of the U.S. Opening Statement at the Second Panel Meeting |
| 11/11/2009 | U.S. Opening Statement at the Second Panel Meeting |
| 08/24/2009 | Executive Summary of U.S. Second Written Submission |
| 08/12/2009 | U.S. Second Written Submission |
| 07/28/2009 | U.S. Answers to the Panel's First Set of Questions |
| 07/20/2009 | Executive Summary of the U.S. Opening Statement at the First Panel Meeting |
| 07/08/2009 | U.S. Closing Statement at the First Panel Meeting |
| 07/07/2009 | U.S. Opening Statement at the First Panel Meeting |
| 07/07/2009 | U.S. Oral Statement at the First Panel Meeting Regarding the U.S. Preliminary Ruling Request |
| 06/08/2009 | Executive Summary of the U.S. First Written Submission |
| 05/27/2009 | U.S. First Written Submission |
| Brief Date | Brief Description |
|---|---|
|
01/13/2011 |
Oral Statement of the United States |
| 12/20/2010 | Appellee Submission of the United States |
| Brief Date | Brief Description |
|---|---|
| 03/25/2011 | Statement by the U.S. to the Dispute Settlement Body |
