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Countervailing Duty Measures on Certain Products from China


Status: Pending

Subject: Countervailing Duty,

Respondent: United States

Complainant(s): China,

Third Parties: Brazil, Canada, European Union, Norway, Saudi Arabia, Turkey, Japan, Korea, India, Australia, Vietnam,

Dispute Number: DS437

Link to Dispute Site: http://wto.org/english/tratop_e/dispu_e/cases_e/ds437_e.htm



On 25 May 2012, China requested consultations with the United States concerning the imposition of countervailing duty measures by the United States on certain products from China. 

China challenges various aspects of certain identified countervailing duty investigations, including their opening, conduct and the preliminary and final determinations that led to the imposition of countervailing duties. China also challenges the “rebuttable presumption” allegedly established and applied by the US Department of Commerce that majority government ownership is sufficient to treat an enterprise as a “public body”. 

China claims that the challenge measures are inconsistent with: 

•Article VI of the GATT 1994; 

•Articles 1.1, 2, 11.1, 11.2, 11.3, 12.7 and 14(d) of the SCM Agreement; and 

•Article 15 of the Protocol of Accession of China.

On 20 August 2012, China requested the establishment of a panel. At its meeting on 31 August 2012, the DSB deferred the establishment of a panel.

Panel and Appellate Body proceedings

At its meeting on 28 September 2012, the DSB established a panel. Australia, Brazil, Canada, the European Union, India, Japan, Korea, Norway, the Russian Federation, Turkey and Viet Nam reserved their third party rights. Subsequently, Saudi Arabia reserved its third party rights.

On 14 November 2012, China requested the Director-General to determine the composition of the panel. On 26 November 2012, the Director-General composed the panel.

The panel circulated its report on July 14, 2014.  The panel found that Commerce’s determinations in 12 investigations that certain state-owned enterprises were “public bodies”  were inconsistent with Article 1.1(a)(1) of the SCM Agreement, based on the Appellate Body’s analysis in DS379.  However, the panel found in favor of the United States with respect to China’s claims regarding Commerce’s calculation of benchmarks, initiation of investigations, and use of facts available, and the panel upheld most of Commerce’s specificity determinations.  The panel also found that China established that Commerce acted inconsistently with Article 11.3 of the SCM Agreement by initiating CVD investigations of export restraints.

 

On August 22, 2014, China appealed the panel’s findings regarding Commerce’s calculation of benchmarks, specificity determinations, and use of facts available.  On August 27, 2014, the United States cross-appealed the panel’s finding that a section of China’s panel request setting forth claims related to Commerce’s use of facts available was within the panel’s terms of reference.  The Appellate Body held a hearing in Geneva on October 16-17, 2014. 

On December 18, 2014, the Appellate Body circulated its report.  On benchmarks, the Appellate Body reversed the Panel and found that Commerce’s determination to use out-of-country benchmarks in four CVD investigations was inconsistent with Articles 1.1(b) and 14(d) of the SCM Agreement.  On specificity, the Appellate Body rejected one of China’s claims with respect to the order of analysis in de facto specificity determinations.  However, the Appellate Body reversed the Panel’s findings that Commerce did not act inconsistently with Article 2.1 when it failed to identify the “jurisdiction of the granting authority” and “subsidy programme” before finding the subsidy specific.  On facts available, The Appellate Body accepted China’s claim that the Panel’s findings regarding facts available are inconsistent with Article 11 of the DSU, and reversed the Panel’s finding that Commerce’s application of facts available was not inconsistent with Article 12.7 of the SCM Agreement.  Lastly, the Appellate Body rejected the U.S. appeal of the Panel’s finding that China’s panel request failed to meet the requirement of Article 6.2 of the DSU to present an adequate summary of the legal basis its claim sufficient to present the problem clearly.

On January 16, 2015 the DSB adopted its recommendations and rulings as set out in the panel report and modified by the Appellate Body report.

 

Panel Proceedings
Brief Date Brief Description
08/01/2013 Executive Summary of the Opening Statement of the United States at the Second Substantive Meeting of the Panel
07/24/2013 Closing Statement of the United States at the Second Substantive Meeting of the Panel
07/23/2013 Opening Statement of the United States at the Second Substantive Meeting of the Panel
06/07/2013 Executive Summary of the Second Written Submission of the United States
05/31/2013 Second Written Submission of the United States
05/01/2013 Closing Statement of the United States at the First Substantive Meeting of the Panel
04/30/2013 Opening Statement of the United States at the First Substantive Meeting of the Panel
03/22/2013 Executive Summary of First Written Submission of the United States
03/15/2013 First Written Submission of the United States
Appellate Proceedings
Brief Date Brief Description
10/16/2014 U.S. Opening Statement
09/09/2014 Appellee Submission of the United States
Recourse to Article 21.3(c) of the DSU: Arbitration
Brief Date Brief Description
09/09/2015 U.S. Oral Statement
08/04/2015 U.S. Written Submission
08/04/2015 U.S. Executive Summary of the Written Submission
Article 21.5 Panel Proceedings (Recourse by China)
Brief Date Brief Description
06/21/2017 U.S. Integrated Executive Summary
06/14/2017 U.S. Comments on China's Answers to Panel Questions
05/31/2017 U.S. Answers to Panel Questions
05/11/2017 Closing Statement at the Panel Meeting
05/10/2017 U.S. Opening Statement at the Panel Meeting
03/27/2017 U.S. Second Written Submission
02/06/2017 U.S. First Written Submission

 

Article 21.5 Appellate Proceedings
Brief Date Brief Description
5/15/2018 U.S. Appellee Submission and Executive Summary
4/27/2018 U.S. Appellant Submission and Executive Summary
4/27/2018 U.S. Notice of Appeal
Recourse to Article 22.6 of the DSU: Arbitration
Brief Date Brief Description
01/15/2020 U.S. Integrated Executive Summary
01/08/2020 U.S. Comments on China’s Answers to the Arbitrator’s Questions after the Videoconference with the Parties
12/11/2020 U.S. Answers to the Arbitrator’s Questions after the Videoconference with the Parties
11/18/2020 Closing Statement of the United States at the Arbitrator’s Videoconference with the Parties
11/12/2020 Opening Statement of the United States at the Arbitrator’s Videoconference with the Parties
08/21/2020 U.S. Answers to Follow-Up Questions from the Arbitrator 
05/07/2020 U.S. Answers to Advance Questions from the Arbitrator 
02/18/2020 U.S. Written Submission (Non-BCI Version)