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  • October 2015
  • The WTO Appellate Body Confirmed That China’s Measures Imposing Anti-dumping Duties on Certain High-performance Stainless Steel Seamless Tubes from Japan Were Inconsistent with the WTO Agreement

The WTO Appellate Body Confirmed That China’s Measures Imposing Anti-dumping Duties on Certain High-performance Stainless Steel Seamless Tubes from Japan Were Inconsistent with the WTO Agreement- Release of WTO Appellate Body report on China’s Measures Imposing Anti-dumping Duties -

On October 14 (Geneva time), 2015, the World Trade Organization (WTO) released the WTO Appellate Body’s report on the measures taken by the People’s Republic of China (“China”) imposing anti-dumping duties on certain high-performance stainless steel seamless tubes (HP-SSSTs) from Japan and the EU, an issue that has been examined by the WTO at the request of Japan. The report presents a ruling that supports the conclusion of the panel report that China’s imposition of anti-dumping duties was inconsistent with the WTO Anti-Dumping Agreement (Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994) because of flaws and defects in China’s determination of injury and causation as well as flaws and defects in its investigation procedure, confirming that China’s measures are inconsistent with the WTO Agreement.

1. Background

On April 11, 2013, Japan requested the establishment of a panel under the WTO Agreement regarding China’s measures imposing anti-dumping duties on certain HP-SSSTs imported from Japan, and on May 24, 2013, a panel was established under the WTO Agreement.

China decided that exports from Japan caused injury to industries in China without appropriately taking into consideration the differences in grade between the high-performance products exported from Japan and products manufactured in China and the fact that they were not in a competitive relationship. On these grounds, Japan has been claiming that China’s imposition of anti-dumping duties is inconsistent with provisions including Article 3 of the WTO Anti-Dumping Agreement (Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994), which stipulates the determination of injury and causation.

In February 2015, the WTO released a panel report, which presented a ruling that China’s imposition of anti-dumping duties was inconsistent with provisions including paragraphs 1 and 5 of Article 3 (determination of injury and causation) of the WTO Anti-Dumping Agreement because China failed to appropriately take into consideration the differences in grade between the high-performance products exported from Japan and products manufactured in China and the fact that they were not in a competitive relationship. The panel requested that China bring its measures into conformity with the Anti-Dumping Agreement.

Japan requested an appeal to the WTO Appellate Body and requested that the Appellate Body confirm the panel’s rulings that China’s measures were inconsistent with paragraphs 1 and 5 of Article 3 of the WTO Anti-Dumping Agreement as well as requesting that the Appellate Body find that the aforementioned flaws and defects were also inconsistent with paragraph 2 (price effect analysis) and paragraph 4 (analysis of impact on the domestic industry) of Article 3. Meanwhile, being dissatisfied with the panel’s rulings that China’s determination of injury and causation and certain aspects of its investigation procedure were inconsistent with the WTO Agreement, China also appealed to the Appellate Body.

After the oral hearings held at meetings of the WTO Appellate Body in July 2015, the Appellate Body has released its report on China’s measures imposing anti-dumping duties on certain HP-SSSTs imported from Japan.

2. Decision by the WTO Appellate Body

The WTO Appellate Body report confirmed that China’s measures were inconsistent with the WTO Anti-Dumping Agreement as follows and recommended that China bring its measures into conformity with that Agreement.

  1. The WTO Appellate Body upheld the ruling of the panel that China’s imposition of anti-dumping duties was inconsistent with paragraphs 1 and 5 of Article 3 of the WTO Anti-Dumping Agreement because in its determination of injury and causation, China failed to appropriately take into consideration the differences in grade between the high-performance products exported from Japan and products manufactured in China and the fact that they were not in a competitive relationship.
  2. China’s measures were also inconsistent with paragraphs 2 and 4 of Article 3 of the WTO Anti-Dumping Agreement.

3. Future schedule

The Appellate Body report is expected to be adopted by the WTO Dispute Settlement Body at a meeting to be held by the middle of November 2015.
Japan requests that China implement the recommendations and rulings in the report as early as possible and immediately bring the WTO-inconsistent restrictions into conformity with the WTO Agreements.

4. References

  1. What are HP-SSSTs?

    HP-SSSTs are high-grade steel tubes used in ultra-supercritical boilers in coal-fired power plants.

  2. What is an anti-dumping duty?

    An anti-dumping duty is a customs duty imposed on a certain product by the importing country where it is demonstrated that the export price of the product is less than its selling price when it is destined for consumption in the exporting country (“dumping”) and the dumped imports are causing injury to the competing industry in the importing country. The amount of anti-dumping duty cannot exceed the difference between the export price of the product and the domestic selling price of the like product in the exporting country.

  3. Value of Japan’s exports of certain HP-SSSTs to China

    Japan’s exports of certain HP-SSSTs to China equaled approximately 140 million US dollars in 2014.

  4. What is a panel under the WTO Agreement?

    If consultations fail to settle a dispute, based on a request from the complaining party, a WTO panel (first instance), which is a quasi-judicial third party organization, examines the matter in question and gives rulings regarding its consistency with the WTO Agreement. If any violations are confirmed, the panel recommends corrective measures. Any party which is not satisfied with the panel rulings may appeal to the WTO Appellate Body (second instance).

Release date

October 15, 2015

Division in charge

  • Office for WTO Compliance and Dispute Settlement, Multilateral Trade System Department, Trade Policy Bureau for information on dealing with general WTO disputes
  • Iron and Steel Division, Manufacturing Industries Bureau for information on the iron and steel industry
  • Northeast Asia Division, Trade Policy Bureau for information on the Japan-China economic relationship

Related Information

WTO

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