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World Trade Organization Adopts Panel and Appellate Body Reports in Steel Dispute with China

11/16/2012

Washington, D.C. - Today United States Trade Representative Ron Kirk announced that the World Trade Organization (WTO) adopted Panel and Appellate Body reports in a dispute with China over the imposition of duties on U.S exports of grain oriented flat-rolled electrical steel (GOES).

“We are pleased that the WTO has adopted these important reports finding that China has misused trade remedies against U.S. exports of certain steel products. This is a broad and decisive victory for the United States and for American workers and manufacturers,” said Ambassador Kirk. “Every dollar of U.S. exports supports jobs here at home. This Administration will continue fighting to make China and other countries play by the rules so that American workers and producers can compete and win in the global marketplace.”

Background:

On June 9, 2009, China initiated separate antidumping duty (AD) and countervailing duty (CVD) investigations on GOES from the United States. On April 10, 2010, China issued final determinations of dumping, subsidization, and injury, along with a notice of imposition of antidumping and countervailing duties. At the request of the United States, the WTO established a panel in March 2011 to examine China’s AD/CVD investigation on GOES from the United States.

The United States alleged that China improperly initiated the CVD investigation of several U.S. laws. The United States also challenged the manner in which China conducted its AD/CVD investigation, alleging that China violated numerous procedural and due process obligations, thus, 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. A WTO panel sided with the United States in a report circulated in June 2012.

On October 18, 2012, the WTO Appellate Body rejected China’s appeal in its entirety. In particular, the Appellate Body upheld the panel’s findings of defects in China’s determination that U.S. exports caused adverse price effects. The Appellate Body also upheld panel findings that China failed to disclose essential facts and failed to explain its determination. Notably, China did not appeal several panel findings that China applied duties in a manner inconsistent with numerous obligations under the Subsidies and Countervailing Measures Agreement and the Anti-Dumping Agreement. In particular, China did not appeal panel findings that China:

• Initiated countervailing duty investigations with respect to several alleged programs based on insufficient evidence;

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

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

• Calculated the “all others” subsidy rate and dumping margin without a factual basis;

• Failed to disclose essential facts and failed to explain its calculation of the “all others” subsidy rate and dumping margin; and

• Made unsupported findings that U.S. exports caused injury to China’s domestic industry.

Within 30 days following today’s adoption of the reports by the WTO, China must announce its intentions with respect to implementing the WTO’s rulings.