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Adopted 25 January 2017
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Complainant Chinese Taipei
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Respondent Canada
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Third Parties Brazil, China, the European Union, the Republic of Korea, Norway, the United Arab Emirates, and the United States
Measure at Issue
The dispute principally concerns the provisional and definitive anti-dumping measures applied by Canada on imports of certain Carbon Steel Welded Pipe (CSWP) from Chinese Taipei.Footnote 1
Main Adopted Findings of the Panel
Article 5.8 of the Anti-Dumping Agreement (ADA), Second Sentence
Chinese Taipei argued that Canada violated Article 5.8 by failing to terminate the investigation regarding two Chinese Taipei exporters for which the Canada Border Services Agency (CBSA) had determined de minimis final dumping margins. The panel recalled that this issue was addressed by both the panel and Appellate Body in Mexico–Anti-Dumping Measures on Rice.Footnote 2
The panel interpreted the phrase ‘margin of dumping’ in Articles 3.3, 9.4, and 9.5 of the ADA to determine whether there are any cogent reasons to depart from the standards established in previous jurisprudence. The panel concluded that the second sentence of Article 5.8 requires immediate termination of an investigation with respect to exporters that have individual de minimis dumping margins. It further affirmed that its finding is consistent with previous findings of the panel and Appellate Body. The panel concluded that Canada had failed to establish cogent reasons for the panel to depart from those findings.Footnote 3
Article 6.10 of the ADA, First Sentence
Chinese Taipei claimed that CBSA violated Article 6.10. Specifically, CBSA determined two margins for each exporter, i.e., one company-specific margin established under Article 2 and a country-wide margin used for assessing the need terminate the investigation immediately under Article 5.8, second sentence. Chinese Taipei was not concerned that Canada had calculated more than one margin of dumping for each exporter, but that it had used the additional, country-wide margin of dumping for the purpose of applying Article 5.8.Footnote 4
The panel rejected Chinese Taipei's claim and found that the second margin that allegedly applied to each individual exporter was a country-wide margin, pertaining to the country as a whole and not to any given exporter.Footnote 5 The panel found that nothing in the text of Article 6.10, first sentence precludes an investigating authority from determining a country-wide dumping margin in addition to an exporter-specific margin.Footnote 6
Article 7.1 (ii) of the ADA
Chinese Taipei claimed that Canada acted inconsistently with Article 7.1(ii) by imposing provisional measures on imports from one Chinese Taipei exporter with a preliminary margin of dumping below the 2% de minimis threshold established in Article 5.8.Footnote 7
The panel rejected Chinese Taipei's claim for two reasons. First, a ‘preliminary affirmative determination’ should be made in respect of individual exporters and not on a country-wide basis.Footnote 8 Second, the term ‘dumping’ in the context of Article 7.1(ii) does not refer only to dumping margins exceeding the 2% de minimis threshold established in Article 5.8 but all instances of dumping.Footnote 9
Additional Claims under Articles 1, 7.5, 9.2 of the ADA and Article VI:2 of the GATT 1994
Chinese Taipei argued that Article 9.2 applies equally to the imposition of provisional measures by virtue of Article 7.5. Therefore, exporters with final de minimis dumping margins do not qualify as ‘sources found to be dumped’ within the meaning of Article 9.2, first sentence. Thus, the imposition of definitive anti-dumping duties on exporters with de minimis dumping margins is inconsistent with Article 9.2., first sentence and Article 7.5.Footnote 10 Moreover, Chinese Taipei asserted that Canada violated Article VI:2, first sentence of the GATT 1994 by imposing provisional anti-dumping duties on imports from exporters with provisional and definitive anti-dumping duties on exporters with preliminary and final de minimis dumping margins. The existence of de minimis dumping margins means that there was no dumping to offset or prevent as required under Article VI:2 of the GATT 1994. This, according to Chinese Taipei, led to a consequent violation of Article 1.Footnote 11
The panel recalled that its findings under Article 5.8, second sentence only applied in respect of final dumping margins that are de minimis. Exporters with final de minimis dumping margins should not have been treated as ‘sources found to be dumped’ for the purpose of imposing a duty under Article 9.2. Subsequently, the panel upheld Chinese Taipei's claim and affirmed the consequential claims under Article 1 and Article VI:2 of the GATT 1994.Footnote 12 Further, the panel recalled that it rejected Chinese Taipei's claim under Article 7.1(ii) and found that at the preliminary determination stage, the CBSA was entitled to treat the exporter as a ‘source found to be dumped’. Therefore, no immediate termination under Article 5.8 was required. The panel thus concluded that there was no basis to conclude that the imposition of provisional measures on imports from that exporter was inconsistent with Articles 1 or 7.5 or Article VI:2 of the GATT 1994.Footnote 13
Article 3 of the ADA
According to Chinese Taipei, the Canadian International Trade Tribunal's (CITT) decision to treat imports from Chinese Taipei exporters with final de minimis dumping margins as ‘dumped imports’ was inconsistent with Articles 3.1, 3.2, 3.4, 3.5, and 3.7.Footnote 14
The panel followed the finding of the panel in EC–Salmon Footnote 15 and found that the application of Article 5.8 implied that there is no ‘legally cognizable dumping’ by an exporter with a final de minimis dumping margin. As a result, imports from that exporter cannot be considered ‘dumped imports’ for the purposes of the injury analysis under Article 3.Footnote 16 Consequently, the panel found that Canada had violated Articles 3.1, 3.2, 3.4, 3.5, and 3.7 by treating imports from two Chinese Taipei exporter with final de minimis dumping margins as ‘dumped imports’ in the CITT's injury and causation analysis and final determinations.Footnote 17
Articles 3.1 and 3.5 of the ADA
Chinese Taipei contended that in its non-attribution analysis, the CITT should have considered the threat of material injury caused by two known other factors i.e. (i) the effect of subsidies provided in respect of dumped imports from India; and (ii) overcapacity in the domestic industry in Canada.Footnote 18 Subsequently, Chinese Taipei submitted that Canada acted inconsistently with Articles 3.1 and 3.5 because the CITT failed to separate and distinguish the subsidy's effect from the effect of dumping with regards to imports from India and the effect of overcapacity with regards to the domestic industry.Footnote 19
The panel rejected Chinese Taipei's claim that CITT acted inconsistently with Articles 3.1 and 3.5 by failing to separate the effect of subsidization from the effect of dumping with respect of the dumped and subsidized imports from India.Footnote 20 The panel explained that Article 3.5 focuses the injury analysis on the effect of the ‘dumped imports’ rather than the ‘effects of dumping’ per se. This meant that the imports subject to an investigation cannot simultaneously be ‘dumped imports’ referred to in Articles 3.5, 3.2, and 3.4 and factors other than the dumped imports referred to in Article 3.5, third sentence.Footnote 21 Further, the panel found that Chinese Taipei had failed to establish that overcapacity in the domestic industry was known to CITT as a factor causing injury to the domestic industry. Therefore, there was no basis to conclude that CITT violated Articles 3.1 and 3.5 by failing to conduct a non-attribution analysis in respect of this factor.Footnote 22
Articles 6.8 and Annex II, Paragraph 7 of the ADA
Chinese Taipei submitted that Canada violated Article 6.8 and Annex II, paragraph 7. It asserted that CBSA used facts available in determining the dumping margin and rate of duty for imports from non-cooperating exporters from Chinese Taipei (‘all other exporters’) on the basis of the highest amount by which the normal value exceeded the export price on an individual transaction for a cooperative producer from any country subject to the investigation.Footnote 23 Chinese Taipei was principally concerned with the nature of the available facts that the CBSA relied on and the methodology followed by the CBSA to determine the facts available.Footnote 24
The panel adopted the legal standard established by the Appellate Body in Mexico–Anti-Dumping Measures on Rice and asserted that the requisite comparative evaluation and assessment involves the consideration and comparison of all ‘all substantiated facts on the record’, which must be adequately reflected in the investigation's public reports.Footnote 25 The panel concluded that the CBSA applied facts available for the dumping margin and duty rate for ‘all other exporters’ without conducting a comparative evaluation and assessment of all the available information on the record before applying facts available in respect of ‘all other exporters’.Footnote 26 Thus, the panel found that Canada violated Article 6.8 and Annex II, paragraph 7.Footnote 27
Articles 2.2, 6.8 and Annex II, 6.10, and 9.3 of the ADA
Chinese Taipei challenged aspects of the CBSA's determination with regard to the treatment of imports of new product models or types (new products). It submitted that Canada violated Article 9.3 because the anti-dumping duties applied on new products was the same as the duty applied on all other products and therefore did not reflect the dumping margin established for the relevant exporters during the original investigation. Further, Canada violated Article 6.8 and Annex II of the ADA because it resorted to facts available for the calculation of the normal value for the new product types without finding that the relevant exporters had failed to cooperate. Furthermore, Canada violated Article 2.2 because it calculated normal values for new products of cooperating exporters in a manner not contemplated by the ADA. Finally, Canada violated Article 6.10 by establishing a second margin of dumping for new products.Footnote 28
The panel explained that a difficulty arises when an exporter exports a new product after the investigation has been completed and an anti-dumping measure is applied. The investigating authority would not have established normal values for new products, and anti-dumping duties cannot be established by merely comparing the export price to a model-specific prospective normal value.Footnote 29 The panel concluded that China violated Article 9.3 by imposing anti-dumping duties on new product models or types from investigated and cooperative exporters from Chinese Taipei that exceeded their dumping margins established in Article 2.Footnote 30 With regard to Article 6.8, the panel explained that facts available may only be used when an interested party does not provide ‘necessary information’ within a reasonable period, which significantly impedes the investigation. Further, according to paragraph 1 of Annex II, the investigating authority may only use ‘facts available’ when it has specified in detail the information required and ensured that the party is aware that if it fails to provide information within a certain period of time it could resort to ‘facts available’.Footnote 31 The panel upheld Chinese Taipei's claims that the CBSA's use of ‘facts available’ to determine the amount of anti-dumping duty imposed or collected in imports of new product models or types from investigated and cooperative exporters is not consistent with Article 6.8 and Annex II of the ADA.Footnote 32
