WT/DS268/R
Page A-1
Annex A
FIRST WRITTEN SUBMISSIONS BY THE PARTIES
Contents / PageAnnex A-1 First Written Submission of Argentina1 / A-2
Annex A-2 First Written Submission of the United States / A-87
Annex A-3 Submission from Argentina on the Request by the United States for Preliminary Rulings under Article 6.2 of the DSU / A-175
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1 Argentina confirmed, by its letter dated 12 December 2003, that all references made to Exhibit ARG-56 in Argentina's first written submission, must now be understood as being made to Exhibit ARG-56 bis.
ANNEX A-1
FIRST WRITTEN SUBMISSION OF ARGENTINA
15 October 2003
TABLE OF CONTENTS
Page
I. Introduction 7
A. Anti-dumping duties cannot exist in perpetuity 7
B. History of US trade remedy proceedings against Argentine OCTG 8
II. FACTUAL BACKGROUND 11
A. The anti-dumping investigation giving rise to the anti-dumping duty order on Argentine OCTG 11
B. Sunset Review of OCTG from Argentina 12
III. PROCEDURAL BACKGROUND 15
IV. EXECUTIVE SUMMARY OF ARGENTINA’S CLAIMS 16
A. Certain US sunset review statutory, regulatory, and administrative provisions are WTO-inconsistent as such 16
B. The Department’s Sunset Review was inconsistent with US WTO obligations 17
C. The Commission’s Sunset Review was inconsistent with US WTO obligations 18
D. Consequential violations of the Anti-Dumping Agreement, the GATT 1994, and the WTO Agreement 19
V. OVERVIEW OF US SUNSET REVIEW LAW 19
A. Sunset reviews under US law 19
1. Introduction 19
2. Procedures for determining the type of sunset review conducted: Expedited review or full review 20
3. Effect of conduct of expedited sunset review 21
4. Effect of a “waiver” determination by the Department in a sunset review 21
5. Implementing US Uruguay Round obligations: The Statement of Administrative Action (“SAA”) 21
6. The Department of Commerce Sunset Policy Bulletin 23
7. The Department’s “likelihood” determination 23
8. The Commission’s “likelihood” determination 25
VI. STANDARD OF REVIEW, BURDEN OF PROOF, AND THE SUBSTANTIVE WTO OBLIGATIONS AT ISSUE IN THIS DISPUTE 26
A. Standard of review 26
B. Burden of proof 27
C. Substantive obligations at issue in this dispute 28
1. The primary obligation of Article 11.3 of the Anti-Dumping Agreement is termination of anti-dumping measures 28
2. The plain and ordinary meaning of the term “likely” in Article 11.3 is “probable.” Hence, an anti-dumping duty can be maintained only if it is probable that dumping and injury would continue or recur if the anti-dumping measure were terminated 30
3. The obligations in Articles 2, 3, 6 and 12 of the Anti-Dumping Agreement are applicable to reviews conducted under Article 11.3 31
VII. THE DEPARTMENT’S SUNSET DETERMINATION AND THE DEPARTMENT’S DETERMINATION TO CONDUCT AN EXPEDITED SUNSET REVIEW WERE INCONSISTENT WITH THE ANTI-DUMPING AGREEMENT AND GATT 1994 33
A. The US Sunset Review Waiver Provisions, 19 USC. § 1675(c)(4) and 19 C.F.R. § 351.218(d)(2)(iii), are inconsistent with the Anti-Dumping Agreement: When a respondent interested party is deemed to have “waived” its right to participate in a sunset review, the Waiver Provisions preclude the Department from conducting a “review” and making a “determination” whether expiry of the duty would be likely to lead to continuation or recurrence of dumping, and instead mandate a finding of likely dumping without any analysis 35
1. The US Sunset Review Waiver Provisions, as such, violate the Anti-Dumping Agreement because they prohibit the Department from conducting a “review” and making a “determination” as required by Article 11.3. Instead, these provisions mandate that the Department render a “likely” dumping determination without any substantive, prospective analysis of the facts existing at the time of the sunset review in order to make the determination required by Article 11.3 35
2. The US Sunset Review Waiver Provisions are inconsistent with Articles 11.3, 11.4, 6.1, and 6.2 of the Anti-Dumping Agreement 38
B. The Department’s Sunset Determination is inconsistent with Article 11.3 of the Anti-Dumping Agreement because it was based on an irrefutable presumption under US law as such that termination of the anti-dumping measure would be likely to lead to continuation or recurrence of dumping 39
1. The Department’s sunset review practice unequivocally demonstrates an irrefutable presumption that dumping would be likely to continue or recur 39
2. The Statutory Provisions, 19 USC. §§ 1675(c) and 1675a(c), implementing the US obligation under Article 11.3, cannot be interpreted independently from the further instruction provided by the SAA and Sunset Policy Bulletin. Taken together, the US Sunset Statutory Provisions, the SAA, and the Sunset Policy Bulletin establish an irrefutable presumption that is inconsistent with Article 11.3 of the Anti-Dumping Agreement 43
C. The Department’s determination to conduct and its conduct of an Expedited Sunset Review of OCTG from Argentina, and its application of the Waiver Provisions to Siderca, were inconsistent with Articles 11, 2, 6, and 12 of the Anti-Dumping Agreement 46
1. The Department’s determination to expedite the review of Argentina solely on the basis that Siderca’s shipments to the United States constituted less than 50percent of the total exports from Argentina was inconsistent with the Anti-Dumping Agreement 46
2. In the Expedited Sunset Review of OCTG from Argentina, and the application of the Waiver Provisions to Siderca, the Department did not conduct a “review” or make a “determination” as required under Article 11.3 of the Anti-Dumping Agreement 48
3. The Department’s Expedited Sunset Review and the application of the Waiver Provisions to Siderca were inconsistent with US obligations under Articles 11 and 6 50
4. The Department’s Determination to Expedite and the Department’s Sunset Determination in the Sunset Review of OCTG from Argentina were inconsistent with Article 12 of the Anti-Dumping Agreement 52
D. Article 11.3 establishes parameters for the Article 11.3 obligation: Article 2 disciplines apply; reviews are prospective in nature and thus require fresh information; dumping must be “probable;” reviews are subject to the evidentiary requirements of Article 6; and the likely determination must be based on positive evidence. The Department failed to satisfy these obligations in its likelihood determination and with regard to the likely margin reported to the Commission 53
1. The Department’s likelihood determination is inconsistent with the Anti-Dumping Agreement 54
2. The likely margin of dumping of 1.36 per cent determined by the Department and reported to the Commission 56
E. The United States failed to administer in an impartial and reasonable manner US anti-dumping laws, regulations, decisions and rulings with respect to the Department’s sunset reviews of anti-dumping duty orders, in violation of Article X:3(a) of the GATT 1994 57
1. Sunset reviews of anti-dumping duty orders are subject to GATT Article X:3(a) 57
2. The Department of Commerce sunset reviews violate GATT Article X:3(a) 58
VIII. THE COMMISSION’S SUNSET REVIEW WAS INCONSISTENT WITH THE ANTI-DUMPING AGREEMENT AND THE GATT 1994 60
A. In the Sunset Review of OCTG from Argentina, the Commission applied an incorrect standard for determining whether termination of the anti-dumping duty measure would be “likely to lead to continuation or recurrence of . . . injury” and violated Articles 11.3 and 3.1 of the Anti-Dumping Agreement 60
B. The Commission failed to conduct an “objective examination” of the record and failed to base its determination on “positive evidence” regarding whether termination of the anti-dumping duty measure would be likely to lead to continuation or recurrence of injury in violation of the Anti-Dumping Agreement 65
1. The requirements of Articles 3.1 apply to reviews conducted under Article 11.3 65
2. The Commission’s conclusions with respect to the volume of imports, price effects on the domestic like product, and impact of imports on the domestic industry demonstrate the Commission’s failure to conduct an objective examination in violation of Articles 11.3, 3.1, and 3.2 of the Anti-Dumping Agreement. The Commission’s findings were not based on “positive evidence” of likely injury in the event of termination, in violation of Articles 11.3, 3.1, and 3.2 of the Anti-Dumping Agreement 67
3. The Commission failed to evaluate all relevant economic factors and indices having a bearing on the state of the industry, including all of the factors enumerated in Article 3.4 of the Anti-Dumping Agreement 70
4. The Commission failed to analyse the issue of whether, if the anti-dumping measure were revoked, the continuation or recurrence of injury to the domestic industry would be caused by imports of Argentine OCTG, in violation of Article 11.3 and 3.5 of the Anti-Dumping Agreement 73
C. The US statutory requirements that the Commission determine whether injury would be likely to continue or recur “within a reasonably foreseeable time” (19USC. § 1675a(a)(1)) and that the Commission “shall consider that the effects of revocation or termination may not be imminent, but may manifest themselves only over a longer period of time” (19 USC. § 1675a(a)(5)), are inconsistent with Articles 11.1, 11.3 and 3 of the Anti-Dumping Agreement 74
1. 19 USC. §§ 1675a(a)(1) and (5) are inconsistent as such with Articles 11.3 and 3 of the Anti-Dumping Agreement 74
2. The Commission’s application of 19 USC. §§ 1675a(a)(1) and (5) in it the Sunset Review of OCTG from Argentina was inconsistent with Articles 11.3 and 3 of the Anti-Dumping Agreement 76
D. The Commission’s application of a “Cumulative” Injury Analysis in the Sunset Review of the anti-dumping duty measure on OCTG was inconsistent with Articles 11.3 and 3.3 of the Anti-Dumping Agreement 76
E. Assuming arguendo that Articles 3.3 and 11.3 do not preclude cumulation in Article 11.3 reviews, then the terms of Article 3.3 apply to any such cumulative analysis in a sunset review. Application of either the de minimis or negligibility requirements (both of which must be satisfied) would have prevented cumulation in this case. The Commission’s Cumulative Injury Analysis in the Commission’s Sunset Determination failed to satisfy the Article 3.3 requirements 78
F. The Commission’s use of a Cumulated Injury Analysis in this Sunset Review was inconsistent with Articles 11.3 and 3.1 of the Anti-Dumping Agreement because it prevented the Commission from applying a “likely” standard, and was not based on positive evidence 79
IX. The Identified US Measures are inconsistent with Article VI of the GATT 1994, Articles 1 and 18 of the Anti-Dumping Agreement, and Article XVI:4 of the WTO Agreement 79
A. The US measures violate the basic principles of the Anti-Dumping Agreement, as provided in Article 1 80
B. The identified US measures, which constitute a “specific action against dumping,” violate Article 18.1 of the Agreement 80
C. The United States has failed to ensure conformity of its measures with its WTO obligations, in violation of Article 18.4 of the Anti-Dumping Agreement and Article VI:4 of the WTO Agreement 82
X. CONCLUSION 83
A. US sunset review statutory, regulatory, and administrative provisions as such violate the Anti-Dumping Agreement and the WTO Agreement 83
B. The Department’s Sunset Review Determination violates the Anti-Dumping Agreement and the GATT 1994 83
C. The Commission’s Sunset Review Determination violates the Anti-Dumping Agreement 84
D. Consequential violations by the United States of the Anti-Dumping Agreement, the GATT 1994, and the WTO Agreement 84
XI. REQUEST FOR SUGGESTIONS FROM THE PANEL ON THE MANNER IN WHICH THE UNITED STATES SHOULD IMPLEMENT THE PANEL’S RECOMMENDATIONS 85
I. Introduction
A. Anti-dumping duties cannot exist in perpetuity
1. This dispute raises an issue of fundamental importance to the integrity of the multilateral trading system: whether WTO Members must respect agreed WTO disciplines regarding the use of anti-dumping measures.
2. During the Uruguay Round, the drafters of the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 (“Anti-Dumping Agreement”) agreed on rules that struck a carefully calibrated balance between Members’ rights and obligations concerning anti-dumping measures. Members recognized the right of importing countries to use anti-dumping measures in order to counteract injurious dumping. At the same time, they established rules to prevent the abuse of anti-dumping measures. Members set out clear rules governing the imposition, maintenance, and termination of anti-dumping duties. Indeed, this careful balance was a key element of the overall package of rights and obligations accepted by Argentina, the United States, and other WTO Members at the conclusion of the Round.
3. Among the most important disciplines regarding anti-dumping measures are those set out in Article 11 of the Anti-Dumping Agreement. Article 11.1 requires that anti-dumping orders must be limited in three significant respects: duration (“only as long as necessary”); magnitude (“only to the extent necessary”); and purpose (“to counteract dumping which is causing injury”).
4. As one panel recently noted, Article 11.1 “contains a general, unambiguous and mandatory requirement that anti-dumping duties ‘shall remain in force only as long as and to the extent necessary’ to counteract injurious dumping.” The panel added that Article 11.1 states “a general and overarching principle, the modalities of which are set forth in paragraphs 2 and 3.”[1] This general principle is expressed substantively throughout Article 11, including in the “sunset review” provisions of Article 11.3.
5. The general obligation set forth in Article 11.3 – that anti-dumping measures shall be terminated after five years – established a clear temporal limitation on the use of anti-dumping duties. Thus, the drafters of the Uruguay Round agreements accepted that anti-dumping measures could not exist in perpetuity but rather would be subject to strict time limitations unless specified requirements could be satisfied to permit their continued maintenance. Specifically, Article 11.3 requires that the authorities conduct a review and make a determination of whether termination of an anti-dumping measure would be likely to lead to continuation or recurrence of dumping and injury. Any findings of likely dumping and likely injury must be based on positive evidence.
6. Indeed, the Appellate Body made clear that “[i]f [a WTO Member] does not conduct a sunset review, or, having conducted such a review, it does not make such a positive determination, the duties must be terminated.”[2]
7. The United States has failed to respect these binding WTO disciplines on the application and maintenance of anti-dumping measures. In general terms:
· The United States has not adequately implemented the Article 11.3 disciplines into US law, regulations, procedures, and practices.