WTO Appellate Body Upholds Ruling Against China In Anti-Dumping And Countervailing Duty Investigations Of Grain Oriented Flat-Rolled Electrical Steel

Keywords: WTO appellate body, China, anti-dumping, GOES, MOFCOM

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 provisions:

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 detail. 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 subject imports. 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 determination.

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...