Korea's Anti-Dumping Duties on Pneumatic Valves From Japan Inconsistent with WTO Agreement The panel upholds Japan's claims on this matter

On March 15, 2016, Japan requested the establishment of a panel under the WTO Agreement regarding the ROK’s measure imposing anti-dumping duties on pneumatic valves from Japan, and on July 4, 2016, a panel under the WTO Agreement was established.

Japan claimed that the ROK’s imposition of anti-dumping duties is inconsistent with the Anti-Dumping Agreement due to defects in the determination of injury and a causal relationship as well as in transparency in its investigation procedure.

Following this, the panel meetings (oral hearings) were held in March and May 2017. The WTO finally circulated a panel report that presents a ruling that the ROK’s measure imposing anti-dumping duties on the product in question is inconsistent with the Anti-Dumping Agreement due to defects in determination of injury and a causal relationship as well as in transparency in its investigation procedure. The panel requests that the ROK bring its measure into conformity with the Anti-Dumping Agreement.

The report presents that the ROK’s imposition of anti-dumping duties is inconsistent with the Anti-Dumping Agreement, and recommends that ROK should bring its measures into conformity with that Agreement, showing the ruling as below:

(1) The ROK’s decision to impose anti-dumping duties is inconsistent with Articles 3.1 and 3.5 of the Anti-Dumping Agreement due to defects in the determination of injury to the ROK’s domestic industry and a causal relationship between such an injury and the dumped imports from Japan.

(2) The ROK’s decision is also inconsistent with Articles 6.5 and 6.5.1 of the Anti-Dumping Agreement due to defects in the investigation procedure, i.e., in handling of confidential information.

(3) Some of Japan’s claims, including those regarding the interpretation of Articles 3.1, 3.2 and 3.4 of the Anti-Dumping Agreement are not accepted or not decided on since the issue is outside the terms of reference of the panel.

Parties concerned may appeal to the WTO Appellate Body within 60 days from the release of the panel report. If no appeal is filed, the panel’s decision in the report will become the WTO’s final decision.

(1) Previous press releases regarding this matter

• Japan Requests Consultations with the ROK (on March 15, 2016)
• Japan Requested the Establishment of a Panel under the WTO Agreement (on June 9, 2016)
• A Panel was Established under the WTO Agreement (on July 4, 2016)

(2) Pneumatic valves

Valves for pneumatic transmission are parts (valves) which control the flow of compressed air in extending, retracting and rotating pneumatic cylinders, which are applied to assembly or conveyor equipment in semiconductor or automobile manufacturing plants.

 (3) Anti-dumping duty

An anti-dumping duty is a customs duty imposed on a certain product by an importing country.
In case that, as the result of the investigation by the importing country, it becomes apparent that a product is exported at a price lower than the price it normally charges on the exporter’s home market (it is said to be “dumping”) as well as the export causes injury on importing country’s domestic industry, the importing country may take action against the dumping in order to defend their domestic industries. 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.

(4) Japan's exports of the product in question to the ROK

Japan’s exports of pneumatic valves to the ROK amounted to approximately 9.1 billion yen in 2017.

(5) A panel under the WTO Agreement

If consultations between the interested parties fail to settle a dispute, based on the request from the complaining party, the WTO panel examines the matter and makes rulings regarding consistency with the WTO Agreement. A party that is not satisfied with the panel rulings may appeal to the WTO Appellate Body.

April 12, 2018

Concerning to the WTO dispute settlement in general

WTO Compliance and Dispute Settlement, Multilateral Trade System Department, Trade Policy Bureau

Concerning to the pneumatic valves industry

Industrial Machinery Division, Manufacturing Industries Bureau

Concerning to Japan-ROK economic relationship

Korea Office, Trade Policy Bureau