United States – Continued Dumping and Subsidy Offset Act of 2000 (WT/DS217)

Recourse by Japan to Article 22.7 of the Understanding on Rules and Procedures Governing the Settlement of Disputes

The Panel and the Appellate Body found that the Continued Dumping and Subsidy Offset Act of 2000 (‘CDSOA’) was inconsistent with the United States' obligations under the General Agreement on Tariffs and Trade 1994 (‘GATT 1994’), the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994, the Agreement on Subsidies and Countervailing Measures and the Marrakesh Agreement establishing the World Trade Organisation. On 27 January 2003, the Dispute Settlement Body (‘DSB’) adopted the Appellate Body report and the Panel report as modified by the Appellate Body report. The United States stated that it intended to implement the recommendations and rulings of the DSB but failed to do so within the reasonable period of time, as determined by the arbitrator pursuant to Article 21.3 (c) of the Understanding on Rules and Procedures Governing the Settlement of Disputes (‘DSU’), which expired on 27 December 2003.

Consequently, on 15 January 2004, Japan requested the authorisation to suspend the application to the United States of tariff concessions and related obligations under GATT 1994 in an amount to be determined every year on the basis of the amount of offset payments made to affected domestic producers in the latest annual distribution of anti-dumping and countervailing duties under the CDSOA.

On 23 January 2004, the United States objected to the level of suspension proposed and on 26 January 2004, pursuant to Article 22.6 of the DSU, the matter was referred to arbitration. On 31 August 2004, the arbitrator issued its decision as follows:

V. AWARD OF THE ARBITRATOR
5.1 For the reasons set out above, we determine that, in the matter United States – Continued Dumping and Subsidy Offset Act of 2000 (Original Complaint by Japan), the level of nullification or impairment suffered by Japan in a particular year can be deemed to be equal to the total of disbursements made under the CDSOA for the preceding year relating to anti-dumping or countervailing duties paid on imports from Japan, multiplied by the coefficient identified in Section III.D above.

5.2 Accordingly, we decide that the suspension by Japan of concessions or other obligations in the form of the imposition of an additional import duty above bound custom duties on a list of products originating in the United States covering, on a yearly basis, a total value of trade not exceeding, in US dollars, the amount resulting from the following equation:

Amount of disbursements under CDSOA for the most recent year for which data are available relating to anti-dumping or countervailing duties paid on imports from Japan at that time, as published by the United States' authorities.

multiplied by:

0.72

would be consistent with Article 22.4 of the DSU.


To date, the United States has still not implemented the recommendations and rulings of the DSB with respect to the CDSOA, and no mutually satisfactory solution has been reached.

Article 22.7 of the DSU provides that “[t]he DSB shall be informed promptly of the decision of the arbitrator and shall upon request, grant authorization to suspend concessions or other obligations where the request is consistent with the decision of the arbitrator, unless the DSB decides by consensus to reject the request.” Therefore, Japan hereby requests authorization from the DSB to suspend the application to the United States of tariff concessions and related obligations under GATT 1994, in the form of the imposition of additional import duties on products originating in the United States, at a level not exceeding every year 72% of the amount of CDSOA disbursements relating to anti-dumping or countervailing duties paid on imports from Japan for the most recent year for which data are available at that time.

In accordance with the arbitration award, Japan will notify the DSB every year, prior to the entry into force of a level of suspension of concessions or other obligations, the list indicating the level of additional import duties on the selected products which will be drawn from the list of products attached.