Transcript dispute ds452 - International Trade Relations
DSU 449, 450, 451, 452 & 454 Presented by: Mahru Enkhchimeg, Carrie Stratmoen, Micaela Thurman & Rosanna Torres
DSU 449 US v. China Antidumping Measures Sept 2012 (Carrie) DSU 450 US v. China Automobile Industry Sept 2012 (Mahru) DSU 451 Mexico v. China Textiles Oct 2012 (Rosanna) DSU 452 China v. EU Renewable Energy Nov 2012 (Micaela) DSU 454 Japan v. China Stainless Steel Dec 2012 (Rosanna)
GPX Int’l Tire Corp. v. United States (2008)
Final Decision from the US Court of
International Trade ( December 2011 )
Countervailing duty law does not apply to non-market economy (NME) countries Commerce Department's current method of applying countervailing and anti-dumping duties on imports from China and other "non-market economies" (NMEs) was invalid.
New provisions added Date of Enactment Section 1
Counter vailing "Applicability to Proceedings Involving Nonmarket Economy Countries". The law is retroactive to 20 November 2006.
Section 2
Anti dumping "Adjustment to Antidumping Duty On or after 13 in Certain Proceedings Relating to Nonmarket Economy Countries". March 2012.
Short Title:
US — Countervailing and Anti-Dumping Measures (China)
Date of Consultation: September 17, 2012 Respondent: Third Parties: Complainant(s): Dispute Number: Dispute Subject(s): Dispute Status:
United States Canada; European Union; Russia; Turkey; Japan; India; Australia; Vietnam; China; DS449 • • Anti-dumping Measures;
Panel composed in March 2013 Pending
PUBLIC LAW 112-99
Section 1- Countervailing
Measures
A new piece of legislation (Public Law 112-99) that explicitly allows for the application of countervailing measures to non-
market economy countries
Countervailing duty
determinations or actions made or performed by US authorities
between 20 November 2006 and
13 March 2012 in respect of Chinese products;
VIOLATE ARTICLES X:1, X:2, AND X:3 OF GATT Article X: Publication and Administration of Trade Regulations
Articles X:1- Laws…shall be published promptly in such a manner as to enable governments and traders to become acquainted with them.
Articles X:2 - No measure of general application… taken by any contracting party shall be enforced before such measure has been officially published.
Articles X:3 Each contracting party shall administer in a uniform, impartial and reasonable manner all its laws…
PUBLIC LAW 112-99
Section 2-
measures
Anti-dumping
Anti-dumping measures associated with the concerned countervailing duty measures as well as the combined effect of these anti dumping measures and the parallel countervailing duty measures; The United States' failure to provide the US Department of Commerce (USDOC) with legal authority to identify and avoid the double remedies in respect of investigations or reviews initiated on or between 20
November 2006 and 13 March 2012.
VIOLATE ARTICLES X:3 OF GATT
Articles X:3
Each contracting party shall administer in a uniform, impartial and reasonable manner all its laws…
DIFFERENCE IN EFFECTIVE DATES VIOLATE SCM, AD AND GATT
US authorities have
no basis
under domestic law to identify and avoid double remedies initiated between 20 November 2006 and 13 March 2012 US authorities
did not investigate and avoid
double remedies in the identified investigations and reviews, This omission prevents the US authorities, in all such investigations and reviews, from ensuring that the imposition of countervailing duties is inconsistent with (Articles 10, 15, 19, 21, and 32 of) the SCM Agreement and (Article VI) of the
GATT 1994
that the imposition of anti- dumping duties in the associated anti-dumping investigations and reviews is inconsistent with (Articles 9 and 11 of) the AD Agreement and (Article VI) of the GATT 1994.
Legal Issue
Domestic law become the object of dispute settlement
Measurement Issues – avoid double remedy
ITC and DOC need to reach conclusive determinations on any CV and AB
China-Certain Measures Affecting the Automobile and Automobile-Parts Industries
USA Requested consultation in 09/17/ 2012 Respondent: Republic of China Joined consultation: European Union in 09/28/2012 (DSU: Article 4.11) Current status: In consultation, panel not formed 12
China provides subsidies in the form of grants, loans, foregone government revenue, the provision of goods and services, and other incentives contingent upon export performance to automobile and automobile parts enterprises in China. China created 12 export base provinces.
USA listed 157 legal instruments including 83 as statement of evidence through which China provides subsidies.
13
Article 3 of Subsidies and Countervailing Measures (SCM) Breach of transparency obligations Article XVI:1 of the GATT 1994 and 25.1, 25.2, 25.3, and 25.4 of SCM Accession Protocol-Part I, Paragraph 2C1 and 2C2 Accession Protocol-Part I, Paragraph 1.2. 14
U.S. & Chinese Subsidies
U.S. provided GM and Chrysler $60 billion in loans, working capital, and other support funds in 2008 Chinese automobile industry continued to grow as a result of $586 billion stimulus package; and sales tax cut on smaller cars during the financial crisis 2008 15
16
17
18
19
20
http://www.youtube.com/watch?v=K4cbjLVr KLM 21
US mainly imports auto-parts from China totaling $5.5 billion, while US exported one fifth of the amount Hundred vehicle manufacturers in China of which 25 are domestic producers (two thirds SOE) Magna International Inc., Canada’s largest auto parts maker, currently has 17 manufacturing and 6 sales, engineering, and product development facilities in China Visteon has 25 manufacturing facilities and 3 customer service centers in China.
22
o o o o o o o PRC is Socialist country Interventionist state, SOEs, state subsidies State maneuvers the steering wheel Chinese automobile and automobile parts industry is premature (established 1950s, 1980s) DS 450 raises state sovereignty issues Multiple interest groups involved: General Motors Volkswagen Honda, etc. Dispute resolution likely to impact U.S. and its largest trading partner Canada’s interests in China 23
DISPUTE DS451
Production and Export of Apparel and Textile
DISPUTE DS451
CHINA HAS MEASURES THAT SUPPORT EXPORTERS AND PRODUCERS OF APPAREL AND TEXTILE PRODUCTS
measures
CASH PAYMENTS TAX EXEMPTIONS Sale and Transport is provided to COTTON FARMERS reduction of IMPORT DUTIES and VALUE ADDED TAX for equipment low cost loans by STATE-OWNED banks Discounted ELECTRICITY RATES preferential land use RIGHTS support for production
DISPUTE DS451
Oct
2012
Nov Dec
2013
Jan Feb Ma r Apr May Jun Jul Aug Sept Oct Oct 15 Mexico requests consultations Oct 25 European Union requests to join consultations Oct 26 Australia & Guatemala request to join consultations Oct 29 Brazil, Peru & U.S.
request to join consultations Oct 30 Nov 15 Honduras requests to join consultations Colombia requests to join consultations
DISPUTE DS451
IN CONSULTATION Complainant requests consultations with respondent, no dispute panel established and no withdrawal or mutually agreed solution notified.
DISPUTE DS451
BUSINESS CONTEXT SUBSIDIES are causing or threatening to cause serious prejudice through displacement and impedance of Mexican exports to the United States as well as through significant price undercutting , price suppression , lost sales in the United States. price depression , and
DISPUTE DS451
measures appear to INVOLVE PROHIBITED ACTIONS under SUBSIDIES & COUNTERVEILING MEASURES AGREEMENT, GATT 1994, AGREEMENT on AGRICULTURE & CHINA’S ACCESSION PROTOCOL
agreements & provisions violated
SCM AGREEMENT Article 3.1 (a), (b) Article 5 (c) Article 6.3 (b), (c) Article 6.4 Article 6.5
GATT 1994 Article III Agreement on AGRICULTURE Article 3 Article 9 Article 10 CHINA’S ACCESSION PROTOCOL PART 1 - Paragraph 1.2
DISPUTE DS451
FORM PANEL: Consultations will probably not resolve situation given the MARKET COMPETITION of both countries.
the PANEL REPORT must ask CHINA to REMOVE SUBSIDIES and INTERNAL PREFERENTIAL TREATMENT FOR: producers/exporters of apparel & textile products suppliers in cotton & chemical fibers industries
WHAT: Domestic Content Requirements Certain Measures Affecting the Renewable Energy Generation Sector
DISPUTE DS452
Oct
2012
Nov Dec
2013
Jan Feb Ma r Apr May Jun Jul Aug Sept Oct Nov 5 China requested consultations with the European Union, Greece and Italy Nov 16 Japan request to join consultations Nov 19 Australia and Argentina request to join consultations
NO ACTION
EU & China negotiate over solar panels
DISPUTE DS452
IN CONSULTATION Complainant requests consultations with respondent, no dispute panel established and no withdrawal or mutually agreed solution notified.
China = EU's 2nd biggest trading partner behind the United States EU = China's biggest trading partner EU policy initiative 20% of Energy from Renewables by 2020 August 6 th EU due to impose antidumping duties on Chinese Solar Panels of 47.6% (Now 11%) – China agreed to price floors
DISPUTE DS452
Articles I - General Most-Favored-Nation Treatment Article III: National Treatment and Internal Taxation III:1 – No internal taxes, charges, laws, regulation or requirements to imported or domestic products in order to protect the domestic markets III:4 – No regulation affecting their internal sale III:5 – No internal quantitative regulation
DISPUTE DS452
Article 1.1 Subsidies = a financial contribution by a government 3.1(b) Can not provide subsidies for using domestic over imported goods
DISPUTE DS452
Article 2.1: No TRIMS inconsistent with article III (National Treatment) or XI (General Elimination of Quantitative Restrictions) of GATT Article 2.2: Illustrative List of TRIMS Inconsistent w National Treatment:
China presents a typically vague case; EU has many initiatives to spur renewable energy, likely to have domestic incentives; Similar DSU between the EU & Canada panel found: Canada in violation of GATT and certain TRIM measures Rejected claims under SCM due to lack of evidence
DISPUTE DS454
Antidumping Duties on High Performance Stainless Steel Seamless Tubes
DISPUTE DS454
CHINA HAS MEASURES IMPOSING ANTI DUMPING DUTIES ON HIGH PERFORMANCE STAINLESS STEEL TUBES
measures
INCREASING ANTI-DUMPING DUTIES 9.7% 11.1% IMPOSED ON IMPORTS OF STEEL TUBES FROM THE EU
DISPUTE DS454
Jan 31 and Feb 1 Japan held consultations with China May 24 Dispute Settlement Body establishes PANEL
DISPUTE DS460
EU files similar case June 13, 2013 Panel was formed Sept 11, 2013
2012
Dec Jan Feb Mar Apr May
2013
Jun Jul Aug Sept Oct Dec 20 Japan requests consultations Apr 11 Japan requests the ESTABLISHMENT OF A PANEL Jul 17 Jul 29 Japan requested Director Director-General to determine composition of General composes PANEL PANEL
DISPUTE DS454
PANEL COMPOSED Panelists have been selected according to procedures laid down in Dispute Settlement Understanding, Article 8. Panel report has not been adopted or appealed . No withdrawal or mutually agreed solution has been notified.
DISPUTE DS454
BUSINESS CONTEXT ANTIDUMPING DUTIES are significantly hampering market access to China through price depression.
DISPUTE DS454
measures are INCONSISTENT WITH ANTI-DUMPING AGREEMENT & GATT 1994
agreements & provisions involved
GATT 1994 Article VI National Treatment on Internal Taxation and Regulation ANTI-DUMPING AGREEMENT Art.1 – Art.3 – Art. 5 – Art. 6 – Art. 7 – Application of anti-dumping measures Determination of injury Art. 12 – Accuracy of evidence Confidentiality clause Provisional measures Notification Annex II- Best Information Article 1 Article 3.1
Article 3.2
Article 3.4
Article 3.5 Article 5.3
Article 5.8
Article 6.5
Article 6.5.1
Article 6.8 Article 6.9 Article 7.4
Article 12.2
Article 12.2.2
ANNEX II
DISPUTE DS454
PANEL REPORT must ask CHINA to
REMOVE INTERNAL PREFERENTIAL TREATMENT CHINA must commit to play by the rules
WTO cases often have political & foreign policy undertones Domestic lawmakers have added responsibility of domestic v. WTO laws Nation states are developing “smart policy” to work around WTO/GATT regulation to appease domestic producers while also advocating for more free trade Trade disputes & DSU force countries to engage on another level of diplomacy