UNITED STATES – ANTI-DUMPING AND COUNTERVAILING MEASURES ON
LARGE RESIDENTIAL WASHERS FROM KOREA
REQUEST FOR THE ESTABLISHMENT OF A PANEL BY THE REPUBLIC OF KOREA
The following communication, dated 5 December 2013, from the delegation of the Republic of Korea to the Chairperson of the Dispute Settlement Body, is circulated pursuant to Article 6.2 of the DSU.
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On 29 August 2013, the Government of the Republic of Korea ("Korea") requested consultations with the Government of the United States of America ("United States") pursuant to Article 4 of the Understanding on Rules and Procedures Governing the Settlement of Disputes ("DSU"), Article XXII of the General Agreement on Tariffs and Trade 1994 ("GATT 1994"), Article 17 of the Agreement on Implementation of Article VI of the GATT 1994 ("Anti-Dumping Agreement"), and Article 30 of the Agreement on Subsidies and Countervailing Measures ("SCM Agreement") with regard to the anti-dumping and countervailing measures on certain large residential washers from Korea. Korea and the United States held consultations on 3 October 2013. The consultations have not led to a satisfactory resolution.
Korea considers that the following measures imposed by the United States are inconsistent with the United States' obligations under the relevant provisions of the WTO Agreements as set forth below in detail.
• Final Determination of Sales at Less Than Fair Value – Notice of Final Determination of Sales at Less Than Fair Value: Large Residential Washers From the Republic of Korea, 77 Fed. Reg. 75988 (December 26, 2012).
• Issues and Decision Memorandum for the Antidumping Investigation of Large Residential Washers From the Republic of Korea (December 18, 2012), available at www.ita.doc.gov.
• Anti-Dumping Duty Order – Large Residential Washers From Mexico and the Republic of Korea: Antidumping Duty Orders, 78 Fed. Reg. 11148 (February 15, 2013).
• Any determination in the anti-dumping proceeding entitled Large Residential Washers from the Republic of Korea, including but not limited to the original investigation, preliminary and final determinations in administrative reviews, new shipper reviews, sunset reviews, changed circumstances reviews, and other segments of that proceeding.
• The so-called "zeroing" methodology used in anti-dumping proceedings that use the average-to-transaction methodology to calculate margins of dumping, and the so-called "targeted dumping" and "differential pricing" methodologies used to determine the applicability of Article 2.4.2 of the Anti-Dumping Agreement, which are used pursuant to, inter alia, the following United States laws, regulations, administrative procedures and measures:
1. The Tariff Act of 1930, as amended, including in particular, sections 771(35)(A) and (B) (i.e., 19 U.S.C. sections 1677(35)(A) and (B)), and 777A(c) and (d) (i.e., 19 U.S.C. sections 1677f-1(c) and (d)).
2. The Statement of Administrative Action that accompanied the Uruguay Round Agreements Act, H.R. Doc. No. 103-316, Vol. I.
3. The implementing regulations of the United States' Department of Commerce ("USDOC"), 19 C.F.R. Part 351, including in particular sections 351.212 and 351.414.
4. The predecessor versions of these regulations, including the version found at 19 C.F.R. section 351.414 (2008), that the USDOC attempted to withdraw (73 Fed. Reg. 74930 (December 10, 2008)), but that the U.S. courts have found to still be in effect in Gold East Paper (Jiangsu) Co., Ltd. v. United States, 918 F. Supp. 2d 1317 (Ct. Int'l Trade 2013).
5. The USDOC Import Administration Antidumping Manual, including any amended versions, and including the computer program(s) to which it refers.
6. Any other closely connected, subsequent measures that enable or permit the use of zeroing, targeted dumping or differential pricing in anti-dumping investigations, administrative reviews and other segments of anti-dumping proceedings, including the collection of cash deposits and the assessment and liquidation of anti-dumping duties.
• Final Countervailing Duty Determination – Large Residential Washers From the Republic of Korea: Final Affirmative Countervailing Duty Determination, 77 Fed. Reg. 75975 (December 26, 2012).
• Issues and Decision Memorandum for the Final Determination in the Countervailing Duty Investigation of Large Residential Washers From the Republic of Korea (December 18, 2012), available at www.ita.doc.gov.
• Countervailing Duty Order – Large Residential Washers From the Republic of Korea: Countervailing Duty Order, 78 Fed. Reg. 11154 (February 15, 2013).
• Any determination in the countervailing duty proceeding entitled Large Residential Washers from the Republic of Korea, including but not limited to other determinations issued in the initial investigation, preliminary and final determinations in administrative reviews, new shipper reviews, sunset reviews, changed circumstances reviews, and other segments of that proceeding.
I. Use of Zeroing "as applied"
Korea considers that the use by the USDOC of "zeroing" in the aforementioned proceedings as well as in the administrative reviews and other segments of Large Residential Washers from the Republic of Korea is inconsistent with, inter alia, the following provisions of the Anti-Dumping Agreement and GATT 1994:
1. Article 2.1 of the Anti-Dumping Agreement and Article VI:1 and Article VI:2 of the GATT 1994, because the USDOC did not determine a dumping margin for the product as a whole;
2. Article 2.4 and Article 2.4.2 of the Anti-Dumping Agreement insofar as the comparisons made by the USDOC did not determine dumping margins for the product as a whole, did not conduct fair comparisons between export price and normal value and are otherwise inconsistent with those provisions;
3. Article 5.8 of the Anti-Dumping Agreement insofar as de minimis dumping margins are erroneously determined not to be de minimis;
4. Article 9.3, Article 9.5, Article 11.2, and Article 11.3 of the Anti-Dumping Agreement insofar as "zeroing" results in the imposition and collection of anti dumping duties in excess of the margins properly determined pursuant to Article 2 of the Anti-Dumping Agreement; and
5. Article 1 and Article 2.1 of the Anti-Dumping Agreement and Article VI:1 and Article VI:2 of the GATT 1994 insofar as "zeroing" results in the imposition and collection of an anti-dumping duty that is not consistent with the Anti-Dumping Agreement.
II. Use of Zeroing "as such"
Korea considers the USDOC's use of "zeroing" under the average-to-transaction ("A-T") comparison methodology in anti-dumping investigations involving the second sentence of Article 2.4.2 to be inconsistent, "as such," with, inter alia, the following provisions of the Anti Dumping Agreement, the GATT 1994, and the Marrakesh Agreement Establishing the World Trade Organization ("Marrakesh Agreement"):
1. Article 2.1, Article 2.4 and Article 2.4.2 of the Anti-Dumping Agreement, and Article VI:1 and Article VI:2 of the GATT 1994, because those provisions do not permit the application of "zeroing" to results of anti-dumping comparisons, including A-T comparisons.
2. Article 2.1, Article 2.4 and Article 2.4.2 of the Anti-Dumping Agreement, and Article VI:1 and Article VI:2 of the GATT 1994, because the United States fails to conduct a fair comparison between export price and normal value and fails to determine a dumping margin for the product as a whole.
3. Article XVI:4 of the Marrakesh Agreement and Article 18.4 of the Anti-Dumping Agreement insofar as the United States has not taken all steps to ensure the conformity of its laws, regulations and administrative procedures with the provisions of the GATT 1994 and the Anti-Dumping Agreement.
Korea also considers the USDOC's use of "zeroing" under the A-T comparison methodology in administrative reviews and other segments of anti-dumping proceedings involving the second sentence of Article 2.4.2 to be inconsistent, "as such," with, inter alia, the following provisions of the Anti-Dumping Agreement, the GATT 1994, and the Marrakesh Agreement:
4. Article 9.3, Article 9.5, Article 11.2 and Article 11.3 of the Anti-Dumping Agreement, and Article VI:1 and Article VI:2 of the GATT 1994, because the United States establishes or relies on an amount of anti-dumping duty that exceeds the margin of dumping as established under Article 2.
5. Article 2.1, Article 2.4 and Article 2.4.2 of the Anti-Dumping Agreement, and Article VI:1 and Article VI:2 of the GATT 1994, because the United States fails to conduct a fair comparison between export price and normal value and fails to determine a dumping margin for the product as a whole.
6. Article XVI:4 of the Marrakesh Agreement and Article 18.4 of the Anti-Dumping Agreement insofar as the United States has not taken all steps to ensure the conformity of its laws, regulations and administrative procedures with the provisions of the GATT 1994 and the Anti-Dumping Agreement.
III. USDOC Methodologies for Applying the Second Sentence of Article 2.4.2 of the Anti-Dumping Agreement "as applied"
Korea considers that both (1) in its determination to apply the second sentence of Article 2.4.2 of the Anti-Dumping Agreement to the Korean respondents in the aforementioned investigation and to apply the "targeted dumping" or "differential pricing" methodologies in, inter alia, administrative reviews and any other segments of Large Residential Washers from the Republic of Korea, and (2) in its ongoing practice concerning "targeted dumping" and "differential pricing" that places burdens and uncertainties on Korean exporters in their ongoing export pricing decisions, the USDOC acts inconsistently with Article 2.1, Article 2.4, and Article 2.4.2 of the Anti-Dumping Agreement and Article VI:1 and Article VI:2 of the GATT 1994, in, inter alia, the following respects:
1. The USDOC fails to find "a pattern of export prices which differ significantly among different purchaser