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- WTO Panel Decides China’s Measure Imposing Anti-Dumping Duties on Stainless Steel Products Originating from Japan Are Inconsistent with the WTO Agreement
WTO Panel Decides China’s Measure Imposing Anti-Dumping Duties on Stainless Steel Products Originating from Japan Are Inconsistent with the WTO Agreement
- WTO Dispute Settlement Panel's Final Report Circulated -
June 19, 2023
Ministry of Foreign Affairs
The World Trade Organization (WTO) circulated a panel’s final report regarding China’s measure of imposing anti-dumping duties on stainless steel products originating from Japan, a matter that has been examined by the WTO at the request of Japan.
The report upheld Japan’s claims and recommended that China bring its measure into conformity with the WTO Agreement.
Japan will continue to request that China withdraw its measure.
1. Outline
Regarding China’s measure of imposing anti-dumping duties on stainless steel products originating from Japan, based on Japan’s request in August 2021, a dispute settlement panel (a “panel”, the first instance) was established in September. After its examination of the matter, the final report of the panel has been circulated.In July 2019, China started imposing anti-dumping (AD) duties (hereinafter referred to as the "AD measure") on stainless steel products imported from Japan, the Republic of Korea, Indonesia, and the EU, claiming that its domestic industry was being injured by the dumped imports of such products. (The AD measure is scheduled to be in place for five years.)
Japan considers the AD measure to be inconsistent with the GATT (General Agreement on Tariffs and Trade) and the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 (the WTO Anti-dumping Agreement) due to flaws in the Chinese authorities' determination and its investigation procedures, and has continuously requested that China withdraw the AD measure.
Based on the oral hearings held in June and October 2022, etc., the final report of the panel, which was circulated on June 19, found that the AD measure is inconsistent with the WTO Anti-dumping Agreement due to the flaws in the authority’s determination of injury and causation, and its investigation procedures, and thus recommended that China bring its measure into conformity with the WTO Agreement.
2. Details of the decision
The panel report found that the AD measure is inconsistent with the WTO Anti-dumping Agreement, and recommended that China bring its measure into conformity with the WTO Agreement, based upon the following findings (1)-(6):(1) China’s determination of the AD measure was inconsistent with Articles 3.1 & 3.2 of the Anti-dumping Agreement, due to its flawed analysis on the subject imports’ effects on the prices of the domestic products (“price effects”).
ⅱ Although subject imports (stainless steel slabs, hot-rolled stainless steel coils and hot-rolled stainless steel plates) have differences in their prices, physical characteristics, uses, customers, etc., China failed to properly analyze these differences.
ⅲ China failed to properly analyze the series of grades (based on their chemical composition) of the subject imports.
ⅳ Therefore, China’s overall finding that “the dumped imports depressed the prices of the domestic products” was not based on objective analyses.
(3) China failed to properly confirm the causation between the dumped imports and the injury to the domestic industry - e.g., it failed to consider the impacts of the price fluctuations of nickel, the raw material of some of the subject imports during the period of investigation – which was inconsistent with Articles 3.1 & 3.5 of the Anti-dumping Agreement.
(4) In its assessment of the production proportion of the domestic industry, China adopted an irregular calculation method without sufficient examinations, leading to the improper definition of the domestic industry, which was inconsistent with Article 4.1 of the Anti-dumping Agreement.
(5) The AD measure was inconsistent with Article 6.9 of the Anti-dumping Agreement due to its flaws regarding information disclosure.
3. Future schedule
The panel report is going to be adopted in a meeting of the WTO Dispute Settlement Body (DSB) to be held within 60 days from this date. After the adoption, China will be obliged to bring its measures into conformity with the WTO Agreement, in accordance with the panel’s recommendation.
Japan will pursue an appropriate solution on this issue in accordance with the rules under the WTO Agreement.
4. Reference
(1) Dispute settlement procedure 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 makes 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). However, the WTO Appellate Body has been dysfunctional, the Multi-Party Interim Appeal Arbitration Arrangement (MPIA) became effective in April 2020, as an interim response to the impasse of the Appellate Body. Japan has participated in this agreement since March 2023 (53 countries and regions, including Japan and China, are participating in this arrangement). The participating members agree to resolve disputes by using the MPIA arbitrations (arbitration by mutual agreement pursuant to Article 25 of DSU), instead of appealing to the non-functional Appellate Body (the so-called “appealing into the void”), when they are unable to accept the adoption of the panel decisions.(2) Stainless steel products (the products in question)
(3) Anti-dumping duty
(4) Total value of exports of the products in question from Japan to China
(5) Related Resources
(6) Previous press releases
Regarding this matter
- Japan Requests Consultations with China under the WTO Agreement Regarding China's Measure Imposing Anti-Dumping Duties on Stainless Steel Products Originating from Japan (June 11, 2021)
- Japan Requests the Establishment of a Panel under the WTO Agreement Regarding China's Measure Imposing Anti-Dumping Duties on Stainless Steel Products Originating from Japan (August 19, 2021)
- Panel Established under the WTO Agreement Regarding China's Measure Imposing Anti-Dumping Duties on Stainless Steel Products Originating from Japan (September 28, 2021)
Regarding MPIA
Division in Charge
Information on the WTO dispute settlement in general:
Office for WTO Compliance and Dispute Settlement, Multilateral Trade System Department, Trade Policy BureauInformation on the stainless steel industry
Metal Industries Division, Manufacturing Industries BureauInformation on Japan-China economic relations
Northeast Asia Division, Trade Policy Bureau