WT/DS268/RW
Page B-1

Annex B

WRITTEN SUBMISSIONS OF THIRD PARTIES

Contents / Page
Annex B-1Third Party Written Submission of China, People's Republic of / B-2
Annex B-2Third Party Written Submission of the European Communities / B-10
Annex B-3Third Party Written Submission of Japan / B-16
Annex B-4Third Party Written Submission of Korea, Republic of / B-23
Annex B-5Third Party Written Submission of Mexico / B-30

Annex B-1

THIRD PARTY WRITTEN SUBMISSION OFTHE

PEOPLE’S REPUBLIC OF CHINA

26 April 2006

Page

I.INTRODUCTION...... 2

II.CHINA’S VIEWS ON ARTICLE 11.3 OF THEAD AGREEMENT...... 3

III.COLLECTING NEW INFORMATION IN A REVISED SUNSET REVIEW...... 3

IV.THE LIKELIHOOD DETERMINATION IN THE SECTION 129
DETERMINATION...... 5

A.The USDOC’s Reasoning in The Section 129 Determination...... 5

B.The USDOC’s Finding of Likely Dumping...... 5

C.The USDOC’s Finding of Declining OCTG Import Volumes...... 6

D.The USDOC’s Consideration of the Factual Factors and Conclusion on Likelihood of Dumping...7

V.CONCLUSION...... 9

I.INTRODUCTION

1.China welcomes the opportunity to present its views in these proceedings on the dispute between Argentina and the United States ("US") with respect to the implementation by the USof the recommendations and rulings of the Dispute Settlement Body ("DSB") on United States – Sunset Reviews ofAnti-Dumping MeasuresonOil Country Tubular Goods From Argentina.

2.In this submission, China will focus on the following four questions:

(1)Whether the US Department of Commerce("USDOC")is permitted by Article 11.3 of the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 ("AD Agreement") to rely on the facts newly developed in its 2005 Section 129 proceeding and covering the original sunset review period;

(2)Whether the finding in the Section 129 Determination that Acindar likely was dumping during the sunset review period was properly made in line with the requirement of Article 11.3 of the AD Agreement;

(3)Whether the finding in the Section 129 Determination that declining import volumes were apparently resulted from the imposition of an anti-dumping dumping order constitutes a reasoned and adequate conclusion as required by Article 11.3 of the ADAgreement;

(4)Whether the USDOC’s consideration of the factual findings and conclusion of likelihood of dumping were made in a reasoned way as required by Article 11.3 of the AD Agreement.

3.In China’s view, these issues are closely related to this Panel’s assessment on whether the US has implemented the DSB recommendations and rulings and therefore deserve the attention by the Panel.

II.CHINA’S VIEWS ON ARTICLE 11.3 OF THE AD AGREEMENT

4.As the issues discussed in this submission mainly relate to Article 11.3 of the AD Agreement, China would like to firstly present its understanding of the obligations imposed on investigating authorities in sunset reviews on the basis of the said provision and WTO jurisprudence.

5.First, the structure of Article 11.3 indicates that generally the definitive anti-dumping duty shall be terminated no later than five years. The only exception to this general rule is the case where the authorities, by means of sunset review, determine that the expiry of the duty would be likely to lead to continuation or recurrence of dumping and injury. As observed by the Appellate Body in USCorrosion-Resistant Steel Sunset Review,Article 11.3 imposes a temporal limitation on the maintenance of anti-dumping duties and lays down a mandatory rule with an exception.[1]

6.Second, in a sunset review, the authorities shall play an active rather than a passive decision-making role with appropriate degree of diligence to arrive at a reasoned conclusion that dumping would be probable if the duty were terminated.[2] In other words, the investigating authorities must have a sufficient factual basis to allow it to draw reasoned and adequate conclusions concerning the likelihood of continuation or recurrence of dumping.[3]

7.Third, in sunset reviews, the evidence is essential for an affirmative determination though the nature and extent of the evidence required for the proof of likelihood of continuation or recurrence of dumping and injurywill vary with the facts and circumstances of the case under review.[4]

III.COLLECTING NEW INFORMATION IN A REVISED SUNSET REVIEW

8.Argentina argues that in the 2005 Section 129 Determination, the USDOC acted inconsistently with Articles 11.3 and 11.4 of the AD Agreement by developing new factual information to support its 2001Sunset Review Determination. According to Argentina, information on two of the key factual findings were developed in the 2005 Section 129 proceeding rather than in the review initiated "at that time" before the expiration of the original anti-dumping measure. In Argentina’s view, in relying on new information developed in 2005, the USDOC did not render a decision that brings the US into compliance with its obligations under Article 11.3 and 11.4.[5]

9.With respect to this issue, China submits the following views for the consideration of this Panel.

10.First, China notes that neither Article 11.3 of the AD Agreement by itself nor the DSU prohibits the investigating authorities from collecting new factual information in the proceedings intended to bring its WTO-inconsistent measure into conformity with the DSB recommendations and rulings.

11.Second, China notes that the panel in USCountervailing Measures on Certain EC Products (21.5－EC)made a relevant observation in this respect. In that dispute, the USDOC,in a Section 129 proceeding, refused to consider the additional evidence submitted by the respondents in the proceeding.[6] The panel noted that "an investigating authority has the obligation to consider all evidence placed on the record in making a likelihood of continuation or recurrence of subsidization re-determination. Without so doing, the investigating authority could not ensure that the new measure, that is, the likelihood-of-subsidization re-determination set out in the Section 129 determination, is based on a sufficient factual record and therefore satisfies the requirements of Article 21.3 of the SCM Agreement"[7]. The panel concluded that, with respect to "evidence provided for the first time by the interested parties during the Section 129 proceedings. . . . Article 21.3 of the SCM Agreement imposes an obligation on the investigating authority during sunset review or revised sunset review proceedings to take into account all the evidence placed on its record in making itsdetermination of likelihood of continuation or recurrence of subsidization".[8]

12.Therefore, the panel finds that the refusal to consider new evidence presented during the Section 129 proceedings is inconsistent with the requirement of Article 21.3 of the SCM Agreement.[9]

13.China submits that the above panel’s ruling in respect of Article 21.3 of the SCM Agreement also applies to Article 11.3 of the AD Agreement in this case. The Appellate Body in USCorrosion-Resistant Steel Sunset Review has noted that Article 11.3 of the AD Agreementis textually identical to Article 21.3 of the SCMAgreement, except that, in Article21.3, the word "countervailing" is used in place of the word "anti-dumping" and the word "subsidization" is used in place of the word "dumping".[10] Consequently, Article 11.3 of the AD Agreementalso imposes an obligation on the investigating authority during revised sunset review proceedings to take into account all the evidencein record, including newly submitted evidence, in making itsdetermination of likelihood of continuation or recurrence of dumping.

14.Third, in this dispute, when finding the inconsistency of the anti-dumping measure at issue with Article 11.3 of theAD Agreement, the original panel held that such inconsistency stems from two aspects: (i) the USDOC’s reliance of its finding of continued dumping on the dumping margin found in the original investigation; (ii) the application of the WTO-inconsistent waivers provisions. In China’s view, these deficiencies are assumptions that lack in sufficient factual basis. In the attempt to remedy such deficiencies, the USDOC inevitably needs to solicit new factual information and make objective assessment on such information. If the USDOC is not permitted to seek new information to adapt its measure, the lack of information would leave the USDOC with no choice but to continue to apply the methodology found inconsistent with Article 11.3 of the AD Agreement– making assumptions.

15.In summary, China holds the view that, in order to bring its measure into compliance with DSB recommendations and rulings, the USDOC is permitted to solicit and collect relevant factual information so as to make its determination on a sufficient factual basis. Notwithstanding, China does not consider that this position necessarily means the USDOC’s Section 129 Determination is a reasoned and adequate conclusion based upon positive evidence.

IVTHE LIKELIHOOD DETERMINATION IN THE SECTION 129 DETERMINATION

A.THE USDOC’S REASONING IN THE SECTION 129 DETERMINATION

16.China notes that, during the Section 129 proceeding, the USDOC requested information from three Argentine producers, i.e., Tubhier, Siderca and Acindar, none of which filed the statement of waiver including a statement that the respondent interested party is likely to dump if the order is revoked. Therefore, in accordance with the newly amendedUS regulations, no producer waived to participate in the proceedings and thus the USDOC simply made one likelihood determination on an order-wide basis.

17.During the Section 129 proceeding, it was reported by Tubhier and confirmed by the USDOC that Tubhier did not ship OCTG to the US during the sunset review period and did not intend to ship to the US in the future. Thus, the USDOC did not make any finding on whether Tubhier had dumped during the sunset review period.

18.With respect to Siderca, since the USDOC considered the estimated cost information provided by Siderca was unreliable and Siderca had no US sales of OCTG during the original sunset review period, the USDOC made "no findings regarding specific instances of likely dumping by Siderca during the original sunset review period".[11]

19.With respect to Acindar, due to its failure to provide data adequate to calculate costs for the subject merchandise, the USDOC was unable to calculate the costs for Acindar. For that reason, the USDOC compared Acindar’s US selling prices during the original sunset review period with prevailing US market prices during that same period and found that the former prices were substantially lower than the latter. In addition, the USDOC also found supports from the depression in the OCTG market as indicated by the losses shown by Acindar and other significant OCTG producers. On such basis, the USDOC reached the conclusion that Acindar likely was dumping significantly in the US market.[12]

20,Before reaching its conclusion on likelihood of dumping, the USDOC referred to its previous finding regarding the declining import volumes of the subject merchandise for the period before and the period after the issuance of the anti-dumping duty order. The USDOC concluded that such declining volumes were "apparently resulting from" the imposition of the anti-dumping measure.

21.On the above basis, the USDOC found that there was likelihood of continuation or recurrence of dumping had the anti-dumping duty order on OCTG from Argentina been revoked in 2000, i.e., at the end of the original sunset review period.

B.THE USDOC’S FINDING OF LIKELY DUMPING

22.In the Section 129 Determination, USDOC compared the export price of Acindar with the prevailing US market price in reaching its finding of likely dumping in the sunset review period. Such an approach obviously contradicts with the basic concept of "dumping" in Article 2.1 of the ADAgreement which is also applicable to the word "dumping" in Article 11.3.

23.In USCorrosion-Resistant Steel Sunset Review, the Appellate Bodynoted that:

However, as we have already observed, the opening words of Article 2.1 ("[f]or the purpose of this Agreement") go beyond a cross-reference and indicate that Article 2.1 applies to the entire Anti-Dumping Agreement. By virtue of these words, the word "dumping" as used in Article 11.3 has the meaning described in Article 2.1. [footnote omitted][13]

24.Article 2.1 of the AD Agreement clearly provides for a definition of "dumping" which reads as follows:

For the purpose of this Agreement, a product is to be considered as being dumped, i.e. introduced into the commerce of another country at less than its normal value, if the export price of the product exported from one country to another is less than the comparable price, in the ordinary course of trade, for the like product when destined for consumption in the exporting country.

In addition, Article 2.2 further provides that normal value can be determined on the basis of export price to third country or so-called constructed value under certain specified circumstances. It is surprising to note that theUS goes so far as to allege that "Article 2 does not contain a ‘notion’ of dumping but rather a methodology for calculating an actual dumping margin"[14]. The underlying logic of the US argument is that given the fact that the US is not calculating a dumping margin, it can then ignore the concept of dumping and determine "likely dumping" with whatever criteria it deems fit. In China’s view, if one does not have a clear view of the concept of dumping or denies the existence of such a concept, he cannot reasonably make a finding of likely dumping.

25.Thus, the USDOC should have compared Acindar’s export price with its domestic sale price in Argentina (or third-country export prices / constructed value) to determine whether Acindar dumped during the sunset review period. The improper comparison with the prevailing US market price led to a flawed finding of "likely dumping" which may not meet the requirement of making a reasoned and adequate determination on a sufficient factual basis as required by Article 11.3 of the AD Agreement.

C.THE USDOC’S FINDING OF DECLINING OCTG IMPORT VOLUMES

26.When making the Section 129 Determination, the USDOC also relied on its previous finding in 2000 sunset review regarding the import volume of the subject merchandise for the period before and the period after the issuance of the anti-dumping duty order.[15]

27.China submits that such reliance seems to be inconsistent with Article 11.3 of the ADAgreement for the following reasons.

28.First, the US argues that the USDOC can legitimately rely on its previous finding of declining import volumes in 2000 in that the original panel found no WTO-inconsistency with respect to such finding.[16]

29.China does not agree. China recalls that in theoriginal dispute, the original panel found that the USDOC's reliance on the existence of the original dumping margin was inconsistent with Article11.3 of theAD Agreement, and therefore did not need to continue to address whether, as the second factual basis, the USDOC's reliance on declining import volumes was yet another action inconsistent with that article.[17] China does not believe the position held by the original panel can be understood to provide a safe haven to the US with respect to the said finding. Therefore, the original panel’s lack of analysis on the issue of declining import volumes simply cannot be a valid defending argument for the US in this proceeding.

30.Second, China notes that in the Section 129 Determination, the USDOC simply stated, without any reasoning, that "[d]eclining import volumes after, and apparently resulting from, imposition of an anti-dumping order indicate that exporters would need to dump to sell at pre-order levels".[18] The USDOC did not explain why such decline of import volumes is attributable to the imposition of the order. The word "apparently" indicates that the USDOC reached this conclusion by assumption instead of reasoning.

31.China submits the USDOC erred in assuming such conclusion, in that the Appellate Body in US Corrosion-Resistant Steel Sunset Review has clearly pointed out that assumptions are not enough to support a determination under Article 11.3, and the decline in import volumes could well have been caused or reinforced by changes in the competitive conditions of the market-place or strategies of exporters, rather than by the imposition of the duty alone.[19]

32.Therefore, the USDOC should have conducted a case-specific analysis of the factors behind the decline in import volumes in order to determine that dumping will continue or recur if the duty is terminated. A simple assumption of such causation is not such positive evidence as to enable the USDOC to draw a reasoned and adequate affirmative likelihood determination as required by Article11.3 of the AD Agreement.

D.THE USDOC’S CONSIDERATION OF THE FACTUAL FACTORS AND CONCLUSION ON LIKELIHOOD OF DUMPING

33.Inthe Section 129 Determination, the major factual bases that the USDOC relied on in making an affirmative likelihood-of-dumping determination are: (i) no findings regarding specific instances of likely dumping by Siderca during the original sunset review period; (ii) the finding of likely dumping by Acindar during the original sunset review period; and (iii) the previous finding regarding the import volumes of the subject merchandise for the period before and the period after the issuance of the anti-dumping duty order.

34.Even assuming, for the sake of argument, that the USDOC properly made a finding of likely dumping with respect to Acindar by the comparison between Acindar’s export pricesandthe prevailing US market prices, such a finding, in combination with the finding of declining import volumes, cannot sufficiently support an affirmative determination of likelihood of dumping. The reasons are detailed below.