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European Communities – Definitive Anti-Dumping Measures on Certain Iron or Steel Fasteners from China – Recourse to Article 21.5 of the DSU by China (EC–Fasteners (China) (Article 21.5–China), DS397)

Published online by Cambridge University Press:  19 September 2016

Geoffrey Carlson
Geoffrey Carlson*
Affiliation:
Works in the WTO Secretariat but writes in a wholly personal capacity
*
Email: gcarls@gmail.com
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Extract

This compliance proceeding under Article 21.5 of the Dispute Settlement Understanding (DSU) concerned measures taken by the European Union to implement the recommendations and rulings of the Dispute Settlement Body (DSB) in EC–Fasteners (China). In EC–Fasteners (China), the DSB found, inter alia, that a European Communities measure imposing definitive antidumping duties on imports of certain iron or steel fasteners from China was inconsistent with certain aspects of the Anti-Dumping Agreement (ADA). The European Union's measures taken to comply with the recommendations and rulings of the DSB consisted, inter alia, of an anti-dumping review investigation regarding fasteners from China (the Review Investigation) conducted by the Commission of the European Union (the Commission). The conduct of the Commission in the Review Investigation was the focus of this compliance proceeding.

Information

Type
Case Summaries
Information
World Trade Review , Volume 15 , Issue 4 , October 2016 , pp. 703 - 705
Copyright
Copyright © Geoffrey Carlson 2016 

  • Adopted   12 February 2016

  • Complainant   China

  • Respondent   European Communities

  • Third Parties   Brazil; Canada; Chile; Colombia; India; Japan; Norway; Chinese Taipei; Thailand; Turkey; United States

Measures at Issue

This compliance proceeding under Article 21.5 of the Dispute Settlement Understanding (DSU) concerned measures taken by the European Union to implement the recommendations and rulings of the Dispute Settlement Body (DSB) in EC–Fasteners (China). In EC–Fasteners (China), the DSB found, inter alia, that a European Communities measure imposing definitive antidumping duties on imports of certain iron or steel fasteners from China was inconsistent with certain aspects of the Anti-Dumping Agreement (ADA). The European Union's measures taken to comply with the recommendations and rulings of the DSB consisted, inter alia, of an anti-dumping review investigation regarding fasteners from China (the Review Investigation) conducted by the Commission of the European Union (the Commission).Footnote 1 The conduct of the Commission in the Review Investigation was the focus of this compliance proceeding.

Main Adopted Findings of the Panel and Appellate Body

ADA Article 6.5 (confidential information)

The Appellate Body upheld the compliance panel's finding that the Commission acted inconsistently with Article 6.5 of the ADA by treating certain information submitted by an analogue country producer regarding the list and characteristics of its products as confidential. In the Appellate Body's view, this violation was properly based on the panel's findings that ‘the particular good cause alleged by [the analogue producer] for the confidential treatment of the information at issue was no more than a bald assertion, which did not seem to support the argument that [the analogue producer] had shown good cause to justify the confidential treatment of that information … [and] the Panel found that the Commission never conducted an objective assessment of “good cause” within the meaning of Article 6.5’.Footnote 2

ADA Articles 6.2 and 6.4 (interested parties' access to information)

The Appellate Body upheld the compliance panel's finding that the Commission violated Articles 6.2 and 6.4 of the ADA ‘by failing to provide the Chinese producers with timely opportunities to see the information on the list and characteristics of [the analogue producer's] products [i.e. the same information that was the subject of China's ADA Article 6.5 claims], which information was not confidential within the meaning of Article 6.5, and which was relevant to the presentation of the Chinese producers' cases and used by the Commission’.Footnote 3

ADA Article 6.1.2 (evidence made available promptly to interested parties)

The compliance panel rejected China's claim that the Commission violated Article 6.1.2 of the ADA ‘by failing to ensure that the information provided by [an ‘interested party’, i.e. the analogue producer] concerning the list and characteristics of its products was made available promptly to the Chinese producers’,Footnote 4 because the analogue producer supplying the information was not an ‘interested party’ within the meaning of Articles 6.11 and 6.1.2, and thus the relevant obligation in Article 6.1.2 did not apply to that information.Footnote 5 The Appellate Body reversed the compliance panel's finding, instead considering that the analogue producer was an ‘interested party’ in the investigation within the meaning of Articles 6.11 and 6.1.2 of the ADA.Footnote 6 The Appellate Body went on to find that the Commission violated Article 6.1.2 ‘because the Commission failed to make available to the Chinese producers information concerning the list and characteristics of [the analogue producer's] products’.Footnote 7

ADA Article 2.4 (failure to provide information and fair comparison)

The Appellate Body upheld the panel's finding that the Commission ‘violated Article 2.4 of the ADA by failing to provide the Chinese producers with information regarding the characteristics of [the analogue producer's] products that were used in determining normal values in the investigation at issue’.Footnote 8 The Appellate Body, however, reversed the compliance panel's findings that the Commission did not violate Article 2.4 of the ADA by rejecting the Chinese producers' requests for certain adjustments for differences that affect price comparability, i.e. ‘alleged differences in taxation’, ‘easier access to raw materials’, ‘use of self-generated electricity’, and differences in ‘efficiency and productivity’.Footnote 9 In particular, the Appellate Body faulted the panel for concluding that the Commission did not need to make such cost adjustments ‘solely because the analogue country methodology was used in this investigation’.Footnote 10

ADA Article 2.4.2 (all comparable export transactions)

The Appellate Body upheld the compliance panel's finding that the Commission violated Article 2.4.2 of the ADA ‘by not taking into consideration, in its dumping determinations, Chinese producers' exports of models that did not match any of the models sold by [the analogue producer]’.Footnote 11

ADA Articles 3.1 and 4.1 (domestic industry definition)

The Appellate Body upheld the compliance panel's finding that the Commission violated Article 4.1 of the ADA ‘by defining the domestic industry on the basis of domestic producers that came forward in response to a notice of initiation which stated that only those producers willing to be included in the injury sample would be considered as cooperating’. The Appellate Body also upheld the compliance panel's conclusion ‘that a domestic industry definition based on a self-selection which introduced a material risk of distortion to the [Investigating Authority]'s injury analysis would necessarily render the resulting injury determination inconsistent with the obligation to make an objective injury analysis based on positive evidence laid down in Article 3.1 of the AD Agreement’, and thus that the Commission had also violated Article 3.1 of the ADA by making an injury determination ‘based on data obtained from a wrongly-defined domestic industry’.Footnote 12

Footnotes

Case Summaries: WTO Disputes

The following summaries provide a brief factual background and describe the key findings of recent WTO panel and Appellate Body reports.

References

1 The original panel in EC–Fasteners (China) was established before the European Communities was replaced by the European Union. The Review Investigation was conducted after that replacement had occurred.

2 Appellate Body Report, EC–Fasteners (China) (Article 21.5–China), paras. 5.70–5.71.

3 Panel Report, EC–Fasteners (China) (Article 21.5–China), para. 7.92. See also ibid. paras. 7.93–7.96; and Appellate Body Report, EC–Fasteners (China) (Article 21.5–China), paras. 5.123–5.125.

4 Panel Report, EC–Fasteners (China) (Article 21.5–China), para. 7.99.

5 Ibid. paras. 7.119–7.123.

6 Appellate Body Report, EC–Fasteners (China) (Article 21.5–China), paras. 5.150–5.152.

7 Ibid. para. 5.154.

8 Panel Report, EC–Fasteners (China) (Article 21.5–China), para. 7.148; and Appellate Body Report, EC–Fasteners (China) (Article 21.5–China), paras. 5.196–5.197.

9 Panel Report, EC–Fasteners (China) (Article 21.5–China), paras. 7.223 and 7.250; and Appellate Body Report, EC–Fasteners (China) (Article 21.5–China), paras. 5.218–5.224 and 5.236–5.242.

10 Appellate Body Report, EC–Fasteners (China) (Article 21.5–China), paras. 5.218 and 5.236.

11 Panel Report, EC–Fasteners (China) (Article 21.5–China), para. 7.276; and Appellate Body Report, EC–Fasteners (China) (Article 21.5–China), para. 5.282.

12 Panel Report, EC–Fasteners (China) (Article 21.5–China), para. 7.299; and Appellate Body Report, EC–Fasteners (China) (Article 21.5–China), para. 5.325.