Panel Established under the WTO Agreement Regarding the Republic of Korea’s Measure Imposing Anti-dumping Duties on Stainless Steel Bars Originating from Japan
October 29, 2018
On October 29, 2018, in response to a request made by Japan to the World Trade Organization (WTO), a panel was established regarding the measure by the Republic of Korea (ROK) of imposing anti-dumping duties on stainless steel bars originating from Japan, on which the ROK started imposing duties from July 30, 2004.
On September 13, 2018, Japan requested the establishment of a panel under the WTO Agreement regarding the measure by the ROK of imposing anti-dumping duties on stainless steel bars originating from Japan. In response to the Japan’s request, a panel was established on October 29, 2018.
On July 30, 2004, the ROK started imposing anti-dumping duties on stainless steel bars originating from Japan. After deciding to extend the anti-dumping duties a second time, the ROK then decided on a third extension of three additional years based on the third sunset review conducted from June 2016 to June 2017.
Japan considers the ROK’s latest decision to extend the anti-dumping duties to be inconsistent with the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 (WTO Anti-dumping Agreement) due to flaws in the determination that the expiration of the duty would be likely to lead to continuation or recurrence of dumping and injury, as well as flaws in its review procedures.
Japan will move forward with the procedures in order for this matter to be appropriately solved in accordance with the WTO Agreements.
Reference 1: Request of the establishment of a panel under the WTO Agreement
- If consultations between governments fail to settle a dispute, based on a request from the complaining WTO Member, 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 inconsistencies are confirmed, the panel recommends correction of the measures. Any party which is not satisfied with the panel rulings may appeal to the WTO Appellate Body (second instance).
- Under the WTO Agreement, parties concerned are required to hold bilateral consultations regarding the measures in question prior to requesting establishment of a panel under the WTO Agreement. However, if bilateral consultations have failed to settle the dispute within 60 days after the date of receipt of the request for consultations, the complaining party may request the establishment of a panel to the Dispute Settlement Body (DSB).
Reference 2: Stainless steel bars
Stainless steel bars are excellent in corrosive resistance, oxidation resistance and heat resistance, mainly molded into and used as bolts, nuts, valves for machine tools or industrial machinery, turbine blades and parts of automobile valves and shafts, etc.
Reference 3: Anti-dumping duty
An anti-dumping duty is a customs duty imposed on a certain product by an importing country where it is demonstrated that the export price of the product is less than its selling price destined for consumption in the exporting country and the dumped imports are causing injury to the competing industry in the importing country. The value 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.
Reference 4: Sunset review
A sunset review is a review initiated before the date of expiry of the imposition of anti-dumping duties on subject products. In principle, the imposition of anti-dumping duties must be terminated within five years from the initiation of their imposition, but as an exceptional rule, the duties can be continued if the imposing country determines that the expiration of the duty would be likely to lead to continuation or recurrence of dumping and injury to the domestic industry.
Reference 5: Background and outline of the imposition of anti-dumping duties on the product in question
- On July 5, 2003, the ROK started an anti-dumping investigation against imports of stainless steel bars from Japan. On July 30, 2004, the ROK made a final determination that the dumped imports of stainless steel bars from Japan had caused material injury to the domestic industry, and, on the same date, it started imposing anti-dumping duties on these products.
- Following two extensions of the anti-dumping duty, the ROK determined yet another three year extension of the anti-dumping duties based on the third sunset review conducted from June 2016 to June 2017.
- As a result of these anti-dumping measures, the ROK has been imposing anti-dumping duties of 15.39% on Japanese companies concerning their stainless steel bars exported from Japan to the ROK for 14 years from July 30, 2004. The total value of imposed duties until June 2017 is approximately 4.87 billion yen, and the three-year extension of the imposition based on the third sunset review is expected to impose duties of 1.28 billion yen on the product in question.
- On June 18, 2018, Japan requested a consultation with ROK, and held a consultation on August 13. As a result that the consultation failed to settle the dispute, on September 13, Japan requested an establishment of a panel to the WTO. On September 26, the Dispute Settlement Body (DSB) held its regular meeting and discussed the request from Japan, and it failed to establish a panel due to the opposition by the respondent (the ROK). Subsequently, a panel was established at the following regular meeting of DSB on October 29, in accordance with the dispute settlement procedures that a panel shall be established at the latest at the DSB meeting following that at which the request first appears as an item on the DSB's agenda, unless at that meeting the DSB decides by consensus not to establish a panel (Article 6-1 of the Understanding on rules and procedures governing the settlement of disputes).
Reference 6: Japan’s exports of the product in question to the ROK
The export volume of stainless steel bars from Japan to the ROK has decreased by approximately 40% since starting the imposition of anti-dumping duties by the ROK on the product in question (from 9,269 tons in 2002 before the duties to 5,349 tons in 2016).
Division in Charge
- Information on WTO dispute in general:
Office for WTO Compliance and Dispute Settlement, Multilateral Trade System Department, Trade Policy Bureau
- Information on the stainless steel bar industry:
Metal Industries Division, Manufacturing Industries Bureau
- Information on Japan-ROK economic relationship:
Korea Office, Trade Policy Bureau