Geneva/Brussels: It was double whammy for China on June 15, 2021. On one hand, at Brussels, the United States of America and the European Union, following a meeting between American President Joe Biden and European leaders, joined hands to end a 17-year-old dispute over subsidies for Airbus and Boeing ostensibly to stand up to China’s investment in the aircraft sector. On the other hand, in Geneva, Japan initiated WTO dispute complaint against Chinese steel duties.
The US-EU pact at Brussels ensures suspension of punitive tariffs estimated at $11.5 billion on products ranging from cheese and spirits to aircraft parts and large commercial aircraft. Welcoming the deal, WTO Director-General Ngozi Okonjo-Iweala termed the dispute as “one of the longest running and most taxing disputes in the history of the WTO”, and added that this agreement proved that with hard work and political will WTO members can achieve “historic results”.
In the meantime, Japan requested World Trade Organization (WTO) dispute consultations with China concerning anti-dumping measures imposed by the latter on certain stainless steel products from Japan. The request was circulated to WTO members on 15 June,2021. It claimed the measures in question, imposed in 2019 by China’s Ministry of Commerce, appeared to be inconsistent with various provisions under the General Agreement on Tariffs and Trade (GATT) 1994 and the Anti-Dumping Agreement. Japan reserves the right to address further factual claims and legal issues under other provisions of the WTO Agreement regarding the matters during the course of the consultations, and expects China’s reply to the present request in due course. Japan stated it was ready to consider with China mutually convenient dates and venue for consultations.
The request for consultations formally initiates a dispute in the WTO. Consultations give the parties an opportunity to discuss the matter and to find a satisfactory solution without proceeding further with litigation. After 60 days, if consultations have failed to resolve the dispute, the complainant may request adjudication by a panel.
The Japanese delegation at WTO had circulated a communication to this effect dated June 11, 2021 to the Chinese delegation and was circulated to the Dispute Settlement Body under the prescribed rules. Japan stated these consultations were with respect to China’s measures imposing anti-dumping duties on stainless steel billets, hot-rolled coils, and hot-rolled plates from Japan. It claimed these measures appeared inconsistent with China’s obligations under the provisions of the GATT 1994 and the Anti-Dumping Agreement, in particular, because China’s injury determination was not based on positive evidence and did not involve an objective examination of the effect of the imports under investigation (“subject imports”) on prices in the domestic market for like
products.
Japan further complained that specifically, in its price effects analysis, China acted inconsistently with Articles 3.1
and 3.2 of the Anti-Dumping Agreement due to, inter alia, the following reasons:
(a) China failed to conduct proper analyses with respect to three different products (i.e. stainless steel billets, hot-rolled coils, and hot-rolled plates) included within the subject imports and the like domestic products, the different series of steel grades based on the products’ chemical compositions, and the subject imports as a whole. China improperly concluded that the subject imports as a whole had a significant effect on the prices of the like domestic products as a whole, but reached this conclusion erroneously,
as China failed to appropriately consider the differences among the three distinct products included in the subject imports and the like domestic products. China also failed to appropriately consider the different series of steel grades. Furthermore, China failed to properly analyze the price trends of the subject imports and the like domestic products; and
(b) China failed to provide any reasonable explanation and analysis of how and to what extent the prices of the like domestic products were affected, given the situation that the prices of subject imports were generally significantly higher than those of the like domestic products.
Japan further charged that China’s cumulative assessment of the effects of subject imports from the European Union, Japan, Indonesia, and Korea was inappropriate in light of the conditions of competition between the imported products and the conditions of competition between the imported products and the like domestic products, due to the following reasons:
(a) The product mixes were different, both in terms of the proportion of three different products (i.e. stainless steel billets, hot-rolled coils, and hot-rolled plates) and the proportion of different series of steel grades based on their chemical compositions,
(i) between the subject imports from different countries and
(ii) between the subject imports and the like domestic products; and
(b) The price levels were different between the subject imports from different countries and between the subject imports and the like domestic products.
Moreover, China’s analysis of the impact of the allegedly dumped imports on the domestic industry:
(a) failed to conduct an objective examination, based on positive evidence, of the impact of subject imports on the domestic industry based on the volume of such imports and their effect on prices;
(b) failed to conduct an objective examination, based on positive evidence, of all relevant economic factors and indices having a bearing on the state of the domestic industry; and
(c) failed to provide a reasoned and adequate explanation of the determination of material injury to the domestic industry by failing to objectively determine the relative importance and weight to be attached to relevant economic factors and indices, and improperly disregarding the majority of those factors and indices indicating that the domestic industry did not suffer material injury.
Japan further accused China of failing to
a) demonstrate, based on positive evidence and an objective examination, that the subject imports were, through the effects of dumping, as set forth in Articles 3.2 and 3.4, causing injury to the domestic industry. In particular, China determined that the allegedly dumped imports were causing injury based on its flawed analysis of price effects under Article 3.2 and its flawed analysis of impact under Article 3.4;
(b) demonstrate the required causal relationship between the subject imports and the injury to the domestic industry based on an objective examination of all relevant evidence before the authorities, including, inter alia, the fact that the allegedly dumped imports had limited market shares in the Chinese market; and
(c) China failed to conduct an objective examination, based on positive evidence, of factors other than the subject imports which were at the same time injuring the domestic industry, and therefore improperly attributed the injury caused by those other factors to the subject imports. The other factors include, rise of raw material nickel prices, strict environmental protection, excessive stainless steel production capacity and competition with other domestic producers.
Japan went on to claim that China’s use of cumulative assessment in its analyses of the effect of allegedly dumped imports on prices, the impact of the allegedly dumped imports on the domestic industry, and the causal relationship between the allegedly dumped imports and the injury to the domestic industry, respectively, was inconsistent with Article 3.3 of the Anti-Dumping Agreement.
China’s measures imposing anti-dumping duties on stainless steel billets, hot-rolled coils and hot-rolled plates from Japan also appear to be inconsistent with Article 1 of the Anti-Dumping Agreement and Article VI of the GATT 1994 as a consequence of the breaches of the Anti-Dumping Agreement, and nullify or impair the benefits accruing to Japan directly or indirectly under the cited agreements.
– global bihari bureau
