WT/DS312/RINTERIM REPORT
Page 1
Organization
WT/DS312/R
28 October 2005
(05-4890)
Original: English
korea – anti-dumping duties on imports
of certain paper from indonesia
(WT/DS312)
Report of the Panel
WT/DS312/R
Page 1
TABLE OF CONTENTS
Page
I.introduction
II.FACTUAL ASPECTS
III.parties' requests for findings and recommendations
A.indonesia
B.korea
IV.ARGUMENTS OF THE PARTIES
A.first written submission of indonesia
1.Introduction
2.Factual Background
3.Legal Argument
(a)Claims arising from the determination of dumping
(i)Korea's use of "facts available" to calculate normal values for Indah Kiat and PindoDeli was inconsistent with Article 6.8 and Annex II of the Agreement
(ii)Korea's use of "facts available" to determine Tjiwi Kimia's dumping margin was inconsistent with Article 6.8 and Annex II of the Agreement
(iii)Korea's use of constructed value to determine normal values for Indah Kiat and PindoDeli was inconsistent with Articles 2.2 and 6.8 of the Agreement
(iv)Korea's calculation of constructed value for Indah Kiat and Pindo Deli was inconsistent with Articles 2.2, 2.2.1.1, 2.2.2 and 2.4 of the Agreement
(v)Korea's failure to make a fair comparison between normal value and export price by adjusting for selling expenses was inconsistent with Article 2.4 of the Agreement
(vi)Korea's treatment of Indah Kiat, Pindo Deli, and Tjiwi Kimia as a single economic entity was inconsistent with Articles 6.10 and 9.3 of the Agreement
(vii)Korea's failure to terminate the investigation of Indah Kiat was inconsistent with Article5.8 of the Agreement
(viii)Korea's determinations contain several violations of the disclosure obligations contained in Articles 6.4, 6.7, 6.9 and 12.2 of the Agreement
(b)Claims relating to the determination of injury and causal link
(i)The KTC's treatment of PPC and WF Paper as "like products" was inconsistent with Articles2.6, 3.1, 3.4, 3.5 and 3.7 of the Agreement
(ii)Korea's failure to conduct its injury and causal link determinations in an objective manner and to base these determinations on positive evidence was inconsistent with Articles 3.1, 3.2, 3.4, 3.5 and 3.7 of the Agreement
(iii)Korea's injury determinations contain several violations of the disclosure obligations contained in Articles 6.1, 6.4 and 6.9 of the Agreement
(iv)Korea improperly granted confidential treatment to information contained in the Domestic Industry's application in violation of Article 6.5 of the Agreement
4.Request for Findings, Rulings and Recommendations
5.Suggestions on Implementation
B.First written submission of Korea
1.The KTC’s procedures were fair
2.The KTC’s dumping determination was consistent with the requirements of the Agreement
(a)Single dumping margin for the Sinar Mas Group Mills
(b)Facts available for Tjiwi Kimia
(c)Facts available for sales through CMI
(d)Continuation of investigation after determination of de minimis preliminary dumping margins for Indah Kiat
3.The KTC’s injury determination was also consistent with the requirements of the Agreement
(a)Definition of like product
(b)Analysis of import volumes and price effects
(c)Analysis of imports by Korean producers
(d)Conclusion
C.First oral statements of Indonesia
1.Opening Statement of Indonesia at the First Meeting of the Panel
(a)The use of facts available for Indah Kiat and Pindo Deli
(b)Tjiwi Kimia
(c)Calculation of individual margins for each exporter
(d)Fair comparison
(e)Like product
(f)The price and volume effects of imports
(g)The consideration of injury factors, causation analysis and own imports by the domestic industry
(h)Procedural issues
2.Closing Statement of Indonesia at the First Meeting of the Panel
D.First oral statements of Korea
1.Opening Statement of Korea at the First Meeting of the Panel
(a)Single dumping margin for the Sinar Mas Group Mills
(b)Facts available for Tjiwi Kimia
(c)Facts available for sales through CMI
(d)Continuation of investigation after preliminary determination
(e)Like product
(f)Consideration of injury factors
(g)Analysis of imports by Korean producers
2.Closing Statement of Korea at the First Meeting of the Panel
E.second written submission of indonesia
1.Introduction
2.Legal Argument
(a)Claims arising from the determination of dumping
(i)Korea's use of "facts available" to calculate normal values for Indah Kiat and PindoDeli was inconsistent with Article 6.8 and Annex II of the Agreement
(b)Korea's calculation of constructed value for Indah Kiat and Pindo Deli was inconsistent with Articles 2.2, 2.2.1.1, 2.2.2, 2.4, and 6.8 of the Agreement
(c)Korea's use of "facts available" to determine Tjiwi Kimia's dumping margin was inconsistent with Article 6.8 and Annex II of the Agreement
(i)The KTC acted inconsistently with paragraph 7 of Annex II of the Agreement in failing to exercise "special circumspection" in its use of secondary information to determine dumping margins for Tjiwi Kimia
(ii)The KTC's use of "facts available" for Tjiwi Kimia without providing other exporters with an opportunity to submit further explanations was inconsistent with Article 6.8 and paragraph 6 of Annex II of the Agreement
(d)Korea's failure to make a fair comparison between normal value and export price by adjusting for selling expenses was inconsistent with Article 2.4 of the Agreement
(e)Korea's treatment of Indah Kiat, Pindo Deli, and Tjiwi Kimia as a single economic entity was inconsistent with Articles 6.10 and 9.3 of the Agreement
(f)Korea's determinations contain several violations of the disclosure obligations contained in Articles 6.4, 6.7, 6.9 and 12.2 of the Agreement
3.Claims relating to the determination of injury and causal link
(a)The KTC's treatment of PPC and WF Paper as "like products" was inconsistent with Articles 2.6, 3.1, 3.4, 3.5 and 3.7 of the Agreement
(b)Korea's failure to conduct its injury and causal link determinations in an objective manner and to base these determinations on positive evidence was inconsistent with Articles 3.1, 3.2, 3.4, 3.5 and 3.7 of the Agreement
(c)Korea's injury determinations contain several violations of the disclosure obligations contained in Articles 6.1, 6.4 and 6.9 of the Agreement
F.second written submission of korea
1.The composition of Indonesia’s delegation
2.Dumping calculation issues
(a)Treatment of Sinar Mas Group Mills as a Single Entity
(b)Facts Available for Tjiwi Kimia
(c)Facts Available for Indah Kiat and Pindo Deli
(i)Rejection of Submitted CMI Sales Data
(ii)Inclusion of Amount Representing CMI’s SG&A Expenses in the Calculation of Constructed Value
(iii)Adjustment for Differences in Level of Trade
(d)Continuation of Investigation after Preliminary Determination
(e)Disclosure of Verification “Results”
3.Injury issues
(a)Like product
(b)Dumped import volumes
(c)Adverse price effects of dumped imports
(d)Factors relevant to material injury determination
(e)Causal link between imports and injury
(f)Imports by Korean producers that were not part of the domestic industry
4.Conclusion
G.second oral statements of indonesia
1.Opening Statement of Indonesia at the Second Meeting of the Panel
(a)Issues relating to the determination of dumping
(i)Use of FactsAvailable For Indah Kiat And Pindo Deli
(ii)Rejection of the Domestic Sales Data
(iii)Rejection of the CMI Financial Statements
(iv)Calculation of SG&A and Interest Expenses of CMI
(v)Use of Facts Available for Tjiwi Kimia
(vi)Fair Comparison
(vii)Collapsing the Three Exporters to a Single Entity
(b)Issues relating to the determination of injury and causation
(i)Like Product
(ii)The Injury Analysis
(c)Procedural issues
2.Closing Statement of Indonesia at the Second Meeting of the Panel
H.second oral statement of korea
1.Opening Statement of Korea at the Second Meeting of the Panel
(a)The proper conceptual framework
(b)Dumping calculation issues
(i)The KTC’s decision to “collapse” the Sinar Mas Group mills
(ii)“Facts available” for Tjiwi Kimia
(iii)The KTC’s rejection of the submitted CMI sales data
(iv)Inclusion of facts available SG&A for CMI in constructed value
2.Injury determination issues
(a)Like product
(b)Trends in the volume of dumped imports
(c)Price effects of the dumped imports
(d)Consideration of injury factors
(e)Consideration of imports by Korean producers
V.ARGUMENTS OF THE THIRD PARTIES
A.third party written submission of canada
B.third party oral statement of canada
C.third party written submission of china
1.Introduction
2.Arguments
(a)Issue 1: necessary information in the context of the application of “facts available”
(b)Issue 2: whether the obligation of the investigating authorities under paragraph 7 of Annex II can be released by compliance of the investigating authorities with Article 5.3 before the initiation of the investigation
(c)Issue 3: The “collapsing” of affiliated respondents
D.third party oral statement of china
(a)Issue 1: Necessary information in the context of the application of “facts available”
(b)Issue 2: Whether the obligation of the investigating authorities under paragraph 7 of Annex II can be released by compliance of the investigating authorities with Article 5.3 before the initiation of the investigation
(c)Issue 3: The “collapsing” of affiliated respondents
E.third party written submission of the european communities
1.The interpretation of “each known exporter” under Article6.10 of the Agreement
2.The use of “facts available” under Article 6.8 of the Agreement in conjunction with AnnexII of the Agreement
3.The termination of an investigation under Article 5.8 of the Agreement
F.third party oral statement of the european communities
1.Introduction
2.The definition of the “product under consideration”
3.Conclusion
G.third party written submission of japan
1.Introduction
2.Arguments
3.Conclusion
H.third party oral statement of japan
1.Introduction
2.Article 6.10 of the Agreement prohibits investigating authorities from arbitrary “collapsing”
3.Conclusion
I.third party written submission of the united states
1.Article 6.10 does not require investigating authorities to determine separate dumping margins for separate legal entities if they constitute a single “exporter” or “producer”
2.Article 2.2 does not limit an investigating authority’s discretion to use constructed value as “facts available” to determine normal value in the absence of timely-submitted, verifiable home market sales data
3.Article 2.4 of the Agreement requires adjustment to price only where differences in selling expenses affect price comparability
4.Examining information in the application for initiation under Article 5.3 of the Agreement does not necessarily satisfy the obligation to corroborate information from secondary sources under paragraph 7 of Annex II
5.Article 5.8 of the Agreement does not require immediate termination of an investigation upon calculation of a preliminary de minimis dumping margin for a responding party
6.An investigating authority does not act inconsistently with Article 2.6 or fail to take into account differences in the markets for different products simply by defining the “like product” to include items that are not identical to each of the items comprising the product under consideration
7.Article 3.2 of the Agreement requires that investigating authorities “consider” whether there was significant price undercutting by subject imports
8.Article 3.5 does not prescribe a particular methodology to be used in determining whether dumped imports are the cause of injury to domestic producers or specify the level of detail at which the analysis must be conducted
9.The fact that some domestic producers import the subject merchandise does not preclude an affirmative injury finding
10.Article 6.9 requires that interested parties be given advance notice of the facts under consideration, not the legal reasoning of the authorities
J.third party oral statement of the united states
1.A single dumping margin may be calculated for two or more legal entities under Article6.10 if they constitute a single “exporter or producer”
2.Article 2.2 does not limit an investigating authority’s discretion to select among the “facts available” to calculate normal value when a respondent does not provide verifiable home market sales data
3.The definition of the domestic "like product" and the "product under consideration" in injury determinations
VI.interim review
A.request of indonesia
B.request of korea
VII.findings
A.general issues
1.Standard of Review
2.Burden of Proof
3.Treaty Interpretation
B.procedural issue
1.Composition of Delegation
2.Access to Submissions
C.ktc's decision to disregard domestic sale information and to calculate normal values for indah kiat and pindo deli on the basis of facts available
1.Arguments of Parties
(a)Indonesia
(b)Korea
2.Arguments of Third Parties
(a)European Communities
(b)China
3.Evaluation by the Panel
(a)Relevant Facts
(b)Legal Analysis
(i)Did Indah Kiat and Pindo Deli Fail to Provide Necessary Information to the KTC Within a Reasonable Period?
(ii)In its Use of Facts Available, Could the KTC disregard Domestic Sales Data Submitted by Indah Kiat and Pindo Deli?
(iii)Did the KTC Fail to Inform Indah Kiat and Pindo Deli of its Decision to Reject their Domestic Sales Data and to Provide them with an Opportunity to Express their Views?
D.ktc's use of constructed value to determine normal values for indah kiat and pindo deli
1.Arguments of Parties
(a)Indonesia
(b)Korea
2.Arguments of Third Parties
(a)United States
3.Evaluation by the Panel
E.ktc's calculation of the constructed normal values for indah kiat and pindo deli
1.Arguments of Parties
(a)Indonesia
(b)Korea
2.Evaluation by the Panel
F.ktc's use of facts available to determine tjiwi kimia's dumping margin
1.Arguments of Parties
(a)Indonesia
(b)Korea
2.Arguments of Third Parties
(a)China
(b)United States
3.Evaluation by the Panel
(a)Alleged Violation of Article 6.8 of the Agreement and Paragraph 7 of Annex II
(b)Alleged Violation of Article 6.8 of the Agreement and Paragraph 6 of Annex II
G.ktc's alleged failure to make a fair comparison between normal value and export price
1.Arguments of Parties
(a)Indonesia
(b)Korea
2.Arguments of Third Parties
(a)United States
3.Evaluation by the Panel
H.ktc's treatment of indah kiat, pindo deli and tjiwi kimia as a single exporter
1.Arguments of Parties
(a)Indonesia
(b)Korea
2.Arguments of Third Parties
(a)China
(b)European Communities
(c)United States
3.Evaluation by the Panel
I.ktc's alleged failure to terminate the investigation with respect to indah kiat
1.Arguments of Parties
(a)Indonesia
(b)Korea
2.Arguments of Third Parties
(a)European Communities
(b)United States
3.Evaluation by the Panel
J.ktc's alleged failure to abide by the disclosure obligations contained in articles 6.4, 6.7, 6.9 and 12.2 of the agreement with respect to its dumping determinations
1.Arguments of Parties
(a)Indonesia
(b)Korea
2.Evaluation by the Panel
(a)Alleged Violation of Article 6.7 of the Agreement
(b)Alleged Violations of Articles 6.4, 6.9 and 12.2 of the Agreement
(i)Article 6.4
(ii)Article 6.9
(iii)Article 12.2
K.ktc's treatment of "plain paper copier" and "uncoated wood-free printing paper" as like products
1.Arguments of Parties
(a)Indonesia
(b)Korea
2.Arguments of Third Parties
(a)Canada
(b)Japan
(c)United States
3.Evaluation by the Panel
L.ktc's alleged failure to base its injury and causal link determinations on an objective examination of positive evidence
1.Arguments of Parties
(a)Indonesia
(b)Korea
2.Arguments of Third Parties
(a)United States
3.Evaluation by the Panel
(a)KTC's Price and Volume Analyses
(i)KTC's Price Analysis
(ii)KTC's Volume Analysis
(b)KTC's Evaluation of the Impact of Dumped Imports on the Korean Industry
(c)KTC's Causation Analysis
(d)KTC's Treatment of the Korean Industry's Imports of the Subject Product as Dumped Imports
(e)KTC's Treatment of Imports from Indah Kiat as Dumped Imports
M.ktc's alleged failure to abide by the disclosure obligations contained in articles 6.1, 6.2, 6.4 and 6.9 of the agreement with respect to its injury determination
1.Arguments of Parties
(a)Indonesia
(b)Korea
2.Arguments of Third Parties
(a)United States
3.Evaluation by the Panel
(a)Disclosure of the Data Relating to the First Half of 2003
(b)Disclosure of the Results of the Technical Test and the Customer Survey Regarding the Like Product Issue
(i)Article 6.4
(ii)Article 6.2
(iii)Article 6.9
(iv)Article 12.2
(c)Change With Respect to the Basis of the KTC's Injury Determination
(d)Failure to Disclose Findings Regarding the Price Effect of Dumped Imports
N.treatment of the information contained in the domestic industry's application as confidential
1.Arguments of Parties
(a)Indonesia
(b)Korea
2.Evaluation by the Panel
VIII.Conclusions and Recommendations
IX.article 19.1 of the dsu
LIST OF ANNEXES
Annex A
REQUEST FOR THE ESTABLISHMENT OF A PANEL
Contents / PageAnnex A-1Request for the Establishment of a Panel – Document WT/DS312/2 / A-2
WT/DS312/R
Page 1
I.introduction
1.1On 4 June2004, the Republic of Indonesia ("Indonesia") requested consultations pursuant to Article4 of the Understanding on Rules and Procedures Governing the Settlement of Disputes ("the DSU"), ArticleXXII:1 of the General Agreement on Tariffs and Trade 1994 ("the GATT"), and Article17 of the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 ("Anti-DumpingAgreement") regarding, inter alia, the imposition by the Republic of Korea ("Korea") of definitive anti-dumping duties on imports of business information paper and uncoated wood-free printing paper from Indonesia and certain aspects of the investigation leading thereto.[1] Korea and Indonesiaconsulted on 7July2004,but failed to settle the dispute.
1.2On 16 August 2004, Indonesia requested the Dispute Settlement Body ("the DSB") to establish a panel pursuant toArticles 4.7 and 6 of the DSU, ArticleXXIII:2 of the GATT, and Articles 17.4 and 17.5 of the Anti-DumpingAgreement ("the Agreement").
1.3At its meeting on 27 September 2004, the DSB established a Panel in accordance with Article6 of the DSU to examine the matter referred to the DSB by Indonesia in document WT/DS312/2. At that meeting, the parties to the dispute also agreed that the panel should have standard terms of reference. The terms of reference are, therefore, the following:
"To examine, in the light of the relevant provisions of the covered agreements cited by Indonesia in document WT/DS312/2, the matter referred to the DSB by Indonesia in that document, and to make such findings as will assist the DSB in making the recommendations or in giving the rulings provided for in those agreements."
1.4On 18 October 2004, Indonesia requested the Director-General to determine the composition of the Panel, pursuant to paragraph 7 of Article 8 of the DSU. On 25 October 2004, the Director-General accordingly composed the Panel as follows:
Chairman:Mr. Ole Lundby
Members:Ms. Deborah Milstein
Ms. Leane Naidin
1.5Canada, China, the European Communities, Japan and the United States reserved their third-party rights.
1.6The Panel met with the parties on 1-2 February and on 30 March 2005. It met with the third parties on 2 February 2005.
II.FACTUAL ASPECTS
2.1On 30 September 2002, the Korea Trade Commission ("the KTC") received an application from the Korean producers for the initiation of an anti-dumping investigation on the imports of "business information paper and wood-free printing paper" originating in China and Indonesia. The KTC sent questionnaires to four Indonesian companies: PT Indah Kiat Pulp and Paper Tbk ("IndahKiat"), PT Pindo Deli Pulp and Paper Mills ("Pindo Deli"), PT Pabrik Kertas Tjiwi Kimia Tbk ("Tjiwi Kimia"), and PT Riau Andalan Kertas ("April Fine"). The KTC initiated the investigation on 14November 2002 and issued the public notice of initiation on 26 November 2002. The original deadline for responses to the questionnaires sent to Indonesian companies was extended by three weeks. Indah Kiat and Pindo Deli responded to the questionnaires in a timely manner, while Tjiwi Kimia did not respond.