On October 18, 2012, the Appellate Body of the World Trade
Organization (WTO) issued its report upholding on all issues the
WTO dispute settlement panel report, China – Countervailing
and Anti-Dumping Duties on Grain Oriented Flat-Rolled Electrical
Steel from the United States.
The panel report, issued on June 15, 2012, was the result of
claims made by the United States to the Dispute Settlement Body
(DSB) of the WTO on certain aspects of China's original
countervailing duty and anti-dumping determinations on grain
oriented flat-rolled electrical steel (GOES). The panel found that
China's investigating authority, the Ministry of Commerce of
the People's Republic of China (MOFCOM), acted inconsistently
with several aspects of both the WTO Subsidies and Countervailing
Measures (SCM) Agreement and the WTO Anti-Dumping (AD) Agreement in
the GOES investigations. Certain key findings of the panel report
include MOFCOM's inconsistencies with the following
Article 11.3 of the SCM Agreement, on the basis that MOFCOM had
initiated countervailing duty investigations of certain programs
without sufficient evidence.
Article 12.4.1 of the SCM Agreement and Article 6.5.1 of the AD
Agreement, because MOFCOM did not require the Chinese petitioners
to furnish non-confidential summaries of information in sufficient
Articles 12.8, 15.1, 15.2 and 22.5 of the SCM Agreement and
Articles 3.1, 3.2, 6.9, and 12.2.2 of the AD Agreement, in
connection with MOFCOM's findings on the price effects of
Articles 12.8, 15.1, 15.5 and 22.5 of the SCM Agreement and
Articles 3.1, 3.2, 6.9, and 12.2.2 of the AD Agreement, with
respect to MOFCOM's finding that subject imports caused
material injury to the domestic industry.
Further examination of these and other issues resolved in the
June 15, 2012 panel report can be found in Mayer Brown's
June 15, 2012, Legal Update.
On July 20, 2012, China announced its decision to appeal certain
issues in the panel report. China's appeal centered on the
panel's findings with respect to MOFCOM's price effects
determination and the disclosure of the underlying facts related to
The October 18, 2012 Appellate Body report upheld all aspects of
the DSB panel report with respect to these issues. The Appellate
Body found that the panel was correct to conclude that MOFCOM's
finding that the subject imports were merely low priced was
insufficient to determine that the subject imports caused injury to
the domestic industry in China. The panel agreed with the United
States' claim that MOFCOM's finding of significant price
depression and suppression was not based on positive evidence and
did not involve an objective examination of the facts.
The Appellate Body also agreed with the panel that MOFCOM failed
to disclose all of the essential facts related to its low price
finding. The Appellate Body found that MOFCOM was required to
disclose under Articles 6.9 and 12.2.2 of the AD Agreement and
Articles 12.8 and 22.5 of the SCM Agreement the price comparisons
of subject imports and domestic products that were necessary to
understand MOFCOM's finding regarding the "low price"
of subject imports.
This decision by the Appellate Body may lead the United States,
the European Union and others to bring additional complaints before
the WTO over the practices and procedures of countries such as
Brazil, China and India in how they administer their anti-dumping
and countervailing duty laws, especially considering the increasing
use of these measures by these countries.
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number OC 303359); Mayer Brown, a SELAS established in France;
Mayer Brown JSM, a Hong Kong partnership and its associated
entities in Asia; and Tauil & Chequer Advogados, a Brazilian
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Mayer Brown Practices in their respective
Mayer Brown article provides information and comments on legal
issues and developments of interest. The foregoing is not a
comprehensive treatment of the subject matter covered and is not
intended to provide legal advice. Readers should seek specific
legal advice before taking any action with respect to the matters
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