Transcript Presentation - Global Trade Relations

Dispute Resolution Case
Study:
China v. U.S. (A/D on Shrimp)
(DS 422) (Panel 2012)
ITRN 603 – Evan Setzer, Marin Sullivan,
Gary Szabo, and Steve Woodward
October 7, 2015
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Briefing Outline
Complaint Overview
Panel and Appellate Body Proceedings
Panel’s Key Findings
Timing and Implementation
Summary of our Team’s Findings
Questions
Source of information: https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds422_e.htm
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Complaint Overview
On 28 February 2011, China requested consultations with US regarding antidumping measures on frozen warm water shrimp from China
– China alleged that the US Department of Commerce's (“USDOC”) regarding zeroing
calculations of dumping margins for subject imports is inconsistent with the US' obligations
under the 1994 GATT 1994 and Anti-Dumping Articles Agreement.
On 11 March 2011, Japan requested to join the consultations
On 22 July 2011, China requested complementary consultations with the US
regarding zeroing calculations practice by the USDOC for diamond sawblades
and parts from China
– China again alleged that the US Department of Commerce's (“USDOC”) regarding zeroing
calculations of dumping margins for subject imports is inconsistent with the US' obligations
under the 1994 GATT 1994 and Anti-Dumping Articles Agreement.
On 13 October 2011, China requested the establishment of a panel
On 13 October 2011, China and the United States informed the DSB of an
Agreement on Procedures
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Panel and Appellate Body Proceedings
On 25 October 2011, the DSB established a panel
– The European Union, Honduras, Japan, Korea, Thailand and Vietnam
reserved their third party rights
– Following the agreement of the parties, the panel was composed on 21
December 2011
On 8 June 2012, the panel report was circulated to
Members
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Panel’s Key Findings
Before the panel, China restricted its claims to the alleged use, by the
USDOC, of zeroing in the anti-dumping investigations at issue.
China's claims concerned:
– (i) the use by the US Department of Commerce of the “zeroing” methodology in the
calculation of certain dumping margins in these original investigations; and
– (ii), the USDOC's reliance upon the same dumping margins, calculated with
zeroing, in calculating the separate rate applied to exporters/producers not selected
for individual examination but who had established that they act independently from
the Chinese government in their export activities.
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Panel’s Key Findings (cont.)
The United States did not contest the factual assertions made by China
regarding the USDOC's use of zeroing in the investigations at issue and
the USDOC's reliance upon dumping margins calculated with zeroing to
establish the separate rate
Nor did the United States contest the legal relevance, to the facts of the
dispute, of the Appellate Body reports cited by China
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Panel’s Key Findings (cont.)
The Panel upheld China's claim concerning the USDOC's use of
zeroing in the calculation of dumping margins for individuallyexamined exporters/producers
– The Panel found that the “zeroing” methodology used by the USDOC in calculating
the margins of dumping in the three anti-dumping investigations at issue was
inconsistent with the Anti-Dumping Agreement, and therefore concluded that the
United States had acted inconsistently with its obligations under this provision.
– The Panel rejected China's claim concerning the separate rate, but noted that the
calculation of the separate rate on the basis of individual margins calculated with
zeroing necessarily incorporated the WTO-inconsistent zeroing methodology
At its meeting on 23 July 2012, the DSB adopted the panel report
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Timing and Implementation
On 27 July 2012, China and the United States informed the DSB that
they had agreed that the reasonable period of time for the United States
to implement the DSB recommendations and rulings shall be 8 months
– Accordingly, the reasonable period of time expired on 23 March 2013
At the DSB meeting on 26 March 2013, the United States informed the
DSB that it had implemented the DSB recommendations and rulings
within the reasonable period of time.
China did not share the United States' view that it had fully
implemented the DSB recommendations as it had failed to revoke the
anti-dumping mechanisms
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Summary of our Team’s Findings
MEASURE AND PRODUCT AT ISSUE –
– US anti-dumping measures covering two products from China: (i) certain frozen warm water
shrimp; and (ii) diamond saw blades and parts
SUMMARY OF KEY PANEL FINDINGS –
– The Panel upheld China’s claim that the use of zeroing in calculating the margins of dumping
in the anti-dumping investigations at issue was inconsistent with GATT Articles and therefore
concluded that the US had acted inconsistently with its obligations under this provision.
– The Panel rejected China’s claim concerning the separate rate in the shrimp investigation. As
the investigation concerned imports from a non-market economy, the USDOC assigned a
“separate rate” to exporters that were able to demonstrate the absence of government control
over their export activities; other exporters were assigned the rate for the People’s Republic of
China-entity. In calculating the separate rate, the USDOC had averaged the dumping margins
of the investigated companies, which were calculated with zeroing. China argued that the
separate rate was also inconsistent with GATT Articles.
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Summary of our Team’s Findings (cont.)
 SUMMARY OF KEY PANEL FINDINGS (cont.) –
– The Panel considered that China “has not … satisfactorily explained how it could provide the
legal basis for a finding of inconsistency with respect to the separate rate” and said that “the
fact that margins of dumping are inconsistent with GATT Articles does not necessarily mean
that a separate rate calculated on the basis of such margins is also, itself, inconsistent with
that same provision”.
– The Panel however agreed with the statement of the panel in US – Shrimp (Ecuador) that the
calculation of the separate rate on the basis of individual margins calculated with zeroing
“necessarily incorporates the WTO-inconsistent zeroing methodology”.
OTHER ISSUES –
– Uncontested claims: Although the US did not contest China’s claims, the Panel considered
that its responsibilities remained as set forth under DSU to make “an objective assessment of
the matter before it”. Further, with respect to the burden of proof, the Panel held that even
though the US did not contest the claims, China was nevertheless required to make a prima
facie case of violation.
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QUESTIONS
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