World Trade Organization

• Author: International Law Group

In June 1998, the European Communities (EU) asked to consult with the U.S. under WTO procedures regarding Title VIII of the U.S. Revenue Act of 1916 [39 Stat. 756, 15 U.S.C. Sections 71-74]. The consultations having been unsuccessful, the WTO set up a Dispute Settlement Panel (DSP) in February 1999. Japan brought a complaint on the same matter with India and Mexico joining.

The Antidumping Act of 1916 (the Act) provides, in essence, that an importer must not "commonly and systematically" sell foreign products at a "substantially" lower price than in the country of origin "with the intent of destroying or injuring an industry in the United States." Though the Act provides for civil and criminal sanctions, no court has yet imposed the Act's criminal sanctions. [Editors' Note: Several cases involving steel imports and a printing press manufacturer are currently pending in U.S. federal courts in Utah, Ohio and Iowa, and the Act may become an issue in those proceedings].

The Panel concluded that the Act was inconsistent with GATT 1994 and the Anti-Dumping Agreement. Ruling that it nullifies and impairs benefits to the EU, the Panel recommended that the U.S. bring the 1916 Act into compliance with the WTO Agreement. The U.S., the EU and Japan appealed on procedural and substantive grounds.

The Appellate Body of the World Trade Organization (WTO) essentially upholds the Dispute Settlement Panel, affirming that the Act violates GATT 1994 and the WTO Anti-Dumping Agreement. After reviewing the arguments that all parties presented on appeal, the Appellate Body enters the following conclusions as to the substantive arguments (Part IX. of the Report):

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