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WTO Rejects the Majority of India’s Challenges to U.S. Countervailing Duties Taken to Address India’s Unfair Steel Subsidies

Washington, D.C. – United States Trade Representative Michael Froman announced today that a World Trade Organization (WTO) dispute settlement panel issued a mixed result, rejecting numerous claims brought by India in a challenge against U.S. trade remedy laws and determinations issued by the Department of Commerce regarding imports of certain steel products from India.

The WTO panel rejected India’s challenges to key aspects of U.S. countervailing duty laws and regulations, and most of the hundreds of challenges brought by India against case-specific Department of Commerce determinations in a countervailing duty proceeding covering hot-rolled carbon steel flat products from India.

“This dispute is another example of the Administration’s commitment to fight for American workers and industry by taking strong trade remedy measures against unfair subsidies and defending those actions when challenged by our trading partners,” said U.S. Trade Representative Michael Froman.  “The WTO panel’s findings rejecting most of India’s numerous challenges to our laws and determinations is a significant victory for the United States and for the workers and businesses making these steel products.” 

The WTO panel upheld key U.S. countervailing duty laws and regulations regarding the application of “facts available” and the calculation of benefit.  The panel also rejected most of the challenges brought by India against Commerce’s case-specific determinations, including challenges to over 300 instances of the use of “facts available,” challenges to Commerce’s benchmark calculations and specificity determinations, findings that two Indian entities constituted “public bodies” and were thus subject to WTO subsidy disciplines, and Commerce’s inclusion of new subsidy programs in countervailing duty review proceedings. 

With respect to findings by the panel that U.S. measures breach WTO rules in certain respects, the United States is studying those findings and will evaluate all options to ensure that U.S. remedies against unfair subsidies remain strong and effective.

Background:

In this dispute, India alleged that several U.S. laws and regulations governing countervailing duty investigations, as well as specific countervailing duty measures imposed on imports of certain hot-rolled carbon steel flat products from India, were inconsistent with provisions of the Agreement on Subsidies and Countervailing Measure (“SCM Agreement”) and the General Agreement on Tariffs and Trade 1994 (“GATT 1994”).   The United States has had countervailing duty measures in place for these products since 2001. 

The panel rejected most of India’s claims against U.S. laws and regulations “as such” under the SCM Agreement.

  • The panel rejected all of India’s challenges under Article 14(d), 19.3, and 19.4 to Commerce’s benchmark regulations, which Commerce uses to determine whether a subsidy has conferred a benefit. 
  • The panel also rejected India’s claims that the U.S. statute and regulations allowing for the use of “facts available” in instances where responding companies fail to cooperate with an investigation violates Article 12 of the SCM Agreement.

The panel found that the U.S. measure allowing for “cross-cumulation” of dumped and subsidized imports when assessing injury in certain ITC determinations breaches WTO rules.  However, the panel rejected other challenges brought by India against ITC’s injury determination in the underlying investigation. 

The panel also rejected most of India’s challenges to the determinations themselves under the SCM Agreement. 

  • The panel rejected India’s challenge to Commerce’s findings that certain entities providing subsidies were “public bodies” acting on behalf of the Government of India.
  • The panel rejected India’s challenge under Article 2.4, which requires that specificity be determined on the basis of positive evidence.
  • The panel rejected India’s challenges under Articles 1.1(b) and 14(d), regarding the application of Commerce’s benchmark regulation, including the use of delivered prices. 
  • The panel rejected India’s challenge under the chapeau of Article 14, regarding Commerce’s rejection of NMDC’s export prices from the 2006, 2007, and 2008 reviews.
  • The panel rejected India’s challenge under Article 1.1(a)(1)(iii) regarding Commerce’s determination that the Government of India had provided goods through the grant of mining rights for iron ore and coal.
  • The panel rejected India’s challenges under Articles 1.1(b) and 14(d) regarding the calculation of the benchmark and determination of benefit in connection with captive mining rights.
  • The panel rejected India’s challenges under Article 14(d), regarding Commerce’s use of delivered prices in calculating the benchmarks for captive mining rights.
  • The panel rejected the majority of India’s claims under Article 12.7 regarding Commerce’s use of “facts available”.
  • The panel rejected all of India’s procedural claims under Articles 11, 13, 21, and 22 of the SCM Agreement regarding the investigation of new subsidies allegations in administrative review proceedings.

The panel found in favor of certain of India’s challenges.  The panel found that Commerce’s determinations with respect to the provision of high grade iron ore breached Articles 2.1(c) and 14(d) of the SCM Agreement in that Commerce failed to take account of all the mandatory factors in its determinations of de facto specificity and also failed to consider relevant domestic price information.  The Panel found with respect to India’s captive mining programs that Commerce breached Article 12.5 by failing to determine the existence of a captive mining program for iron ore on the basis of accurate information, Article 1.1(a)(1)(iii) SCM because there was an insufficient evidentiary basis to find a financial contribution, and Article 14(d) in connection with Commerce’s rejection of certain domestic price information. 

Finally, the panel exercised judicial economy on a number of claims regarding specificity under Articles 2.1(a)-(c), public notice under Article 22.5, and with respect to India’s consequential claims under Articles 10, 19.3, 194, 32.1 and 32.5 of the SCM Agreement, as well as Article VI of the GATT 1994 and Article XVI:4 of the WTO Agreement. 

Both India and the United States have the right to seek adoption or appeal of the report within 60 days of the report’s circulation.