Transcript China-EU Trade Dispute: Anti

Ferima Sidibe
Rebecca Tinger
Stephanie Trumpower
Background: History & Context
 Main WTO Issues & Specific Provisions
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• EU regulations
• A/D on Chinese fasteners
• A/D Investigation process
Panel Decision
 Appellate Body Decision
 Implementation/Sanctions
 Observations & Concerns
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China is EU’s 2nd largest trading partner
Since 1979, the EU has initiated over 160 anti-dumping
measures against Chinese products
The EU imposed anti-dumping duties of 26.5 to 85% on
fasteners from China for five years (January 2009)
Chinese Fastener Industry Association complained
country’s fastener industry suffered great losses due to
EU’s unfair treatment; led to WTO action
China also retaliated by imposing anti-dumping duties
on certain fasteners from the EU (June 2010)
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Jul 31, 2009: China requested consultation with the EU
Oct 12, 2009: China requested establishment of a panel
Oct 23, 2009: Panel established (3rd parties join)
Dec 3, 2010: Panel report circulated
Mar 25, 2011: EU notified of decision to appeal
Mar 30, 2011: China notified of decision to appeal
July 15, 2011: Appellate Body report circulated
Aug 8, 2011: EU’s claims to implement report
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EU anti-dumping regulations against non-market
economies break international trading law and are
discriminatory
EU applies single anti-dumping duty to whole country
rather than for individual firms
Provision Inconsistencies: Article 9(5) of EU’s Basic AD Regulation
inconsistent with Article XVI:4 of WTO Agreement, Articles I:1, VI:1,
and X:3(a) of the GATT 1994, and Articles 6.10, 9.2, 9.3, 9.4, 12.2.2 and
18.4 of the Anti-Dumping Agreement.
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Limiting the exporters/producers due to their large
number is not only exception
Can also apply single margin of dumping depending
on “economic realities of those firms.”
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China: Anti-dumping duties on the “like product”
fasteners were discriminatory to all types of fasteners,
saying that “standard” and “special” fasteners
shouldn’t be combined.
Norway (3rd party): Argued Article 2.6 “requires that
any given category of the ‘like product’ must be ‘like’
each and every category of the product under
consideration.”
Provision Inconsistencies: Nothing in the AD agreement
requires an investigating authority to make a
determination at a more micro level.
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For years, the EU has been carrying out certain
systematic wrongdoings in its anti-dumping
investigations
The EU’s definition of “domestic industry” is biased and
thus investigations are not objective
Provision Inconsistencies: Anti-dumping Agreement Articles 3.1, 3.2,
3.4, 3. 5, 4.1, the GATT 1994, Protocol of Accession
 The
investigating authority has virtually
unregulated discretion to exclude
whichever producers it wishes, so long as
the remaining producers represent a
“major proportion”
 Brazil
 Canada
 Chile
 Colombia
 India
 Japan
 Norway
 Chinese Taipei
 Thailand
 Turkey
 United States
 The
Panel found that Article 9(5) of the
Basic Regulation was inconsistent with
Articles 6.10, 9.2 and 18.4 of the AD
Agreement, Article I:1 of the GATT 1994
and Article XVI:4 of the WTO Agreement
 The
Panel also found that the EU
investigating authorities acted
inconsistently with:
 AD Agreement Articles 3.1 and 3.2
 AD Agreement Articles 3.1 and 3.5
 AD Agreement Articles 6.4 and 6.2
 AD Agreement Article 6.5.1
 AD Agreement Article 6.5
 and AD Agreement Article 6.5
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This case, therefore, involves challenges to EC legislation,
procedures, and the determination of duties are:
• 1. Determination of non-market economy status (NME) unreasonable,
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not objective and discriminatory.
2. Separate determination (individual treatment of a party) inconsistent
3. Insufficient time allowed for response to NME treatment/individual
treatment questionnaires
4. Failure to demonstrate sufficient domestic support for AD initiation
5. Failure to take into account all appropriate adjustments affecting the
comparability of prices
6. Injury determination – several issues
7. Use of a sample of domestic producers
8. Failure to exclude non-dumped imports
9. Failure to consider evidence on other factors causing decline in
domestic market share etc.
10. Failure to disclose relevant information to interested parties.
The Panel rejected China’s claims with
respect to the:
 standing
determination;
 definition of domestic industry;
 product under consideration;
 dumping determination;
 The
Panel found that China’s claims
concerning the definition of like product;
were not within its terms of reference and
declined to make findings on these
claims.
 applied judicial economy with respect to
some of China’s claims regarding the
Basic Regulation and the Definitive
Regulation.
 The
Panel recommended that the DSB
request the European Union to bring its
measures into conformity with its
obligations under the WTO Agreement.
 The Panel declined to make a suggestion
on how the DSB recommendations and
rulings may be implemented by the
European Union.
• March 2011, the European Union notified the DSB of its decision to
appeal to the Appellate Body.
• March 2011, China notified the DSB of its decision to cross appeal to
the Appellate Body certain issues of law covered in the panel report
and certain legal interpretations developed by the Panel.
• May 2011, the Chair of the Appellate Body notified the DSB that due
to the time required for completion of the Appellate Body report, the
Appellate Body would not be able to circulate its report within 60
days. The Appellate Body estimated that the report would be
circulated to Members by mid-July 2011.
 The World Trade
Organization ruled in
favor of China in its case alleging the
European Union is illegally taxing steel
fasteners of all sizes needed for
everything from furniture to cars to
bridges.
 The
DSB agreed that, no later than March
2011, adopt the panel report, unless the
DSB decides by consensus not to do so or
the European Union or China notifies the
DSB of its decision to appeal pursuant to
Article 16.4 of the DSU.
Source: Google Images
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China’s first trade dispute against EU in WTO
• Victory for both Chinese industry and WTO rules
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Mostly small & medium-sized firms
• Promotes faith in system for industries of all sizes
Could open door to more claims where country’s
government is seen to be guiding decision-making
in certain export industries
 US concern: importance of properly defining the
domestic industry (producer/exporter) for
purposes of industry analysis
 China imposed anti-dumping duties on EU
fasteners (June 2010)
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"European Communities — Definitive Anti-Dumping Measures on Certain
Iron or Steel Fasteners from China, US Executive Summary of US Oral
Statement." 1 Apr. 2010. Web.
Miao, Yu. "Beijing Hails Global Trade Win Over EU." Global Times. Web.
Office of the United States Trade Representative. Proc. of Definitive AntiDumping Measures on Certain Iron or Steel Fasteners from China. 28 July
2011. Web
Reppert-Bismarck, Juliane Von. "WTO Raps EU Anti-dumping in China
Fasteners Case - International Business Times." International Business
Times - IBTimes.com. 11 Aug. 2010. Web.
"WTO | 2011 News Items - Dispute Settlement Body, Summary of the
Meeting, 28 July 2011." World Trade Organization - Home Page. 28 July
2011. Web.
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“DSB establishes panel to examine EC anti-dumping measures on
Chinese steel fasteners” 23 October 2009
http://www.wto.org/english/news_e/news09_e/dsb_23oct09_e.htm
“ An introduction to Anti-dumping law of EU and US as it applies to
seafood” Hambry Consulting Course Handbook, 2010
http://www.hambreyconsulting.co.uk/Documents/Course-handbookeng.pdf
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