1. China - U.S. (Various Products from China) (DS449)
Carlos Calderon
Belinda Coulibaly

2. Presentation Contents - DS449
SUMMARY WTO PROVISIONS INVOLVED MAIN WTO ISSUE POSITIONS OF THE MAIN PARTIES HISTORY and CONTEXT PRIOR PROCEEDINGS THE DECISION IMPLEMENTATION POLICY PROPOSALS

3. Summary - DS449
Short Title: US - Countervailing and Anti-Dumping Measures (China)
Complainant: China
Respondent: United States
Third Parties: Australia, Canada, EU, Turkey, Vietnam, India Russian Federation, Japan
Agreements Cited: GATT Art. X, VI; SCM Art. 10, 15, 19, 21, 32;
AD Art. 9,11
Request for Consultations: 17 September 2012
Panel Report: 27 March 2014
Appellate Body Report: 7 July 2014
1 "United States — Countervailing and Anti-dumping Measures on Certain Products from China - DISPUTE DS449." WTO. N.p., n.d. Web. 05 Oct

4. WTO Provisions Involved - DS449
Articles VI, X:1, X:2 and X:3 of the General Agreement on Tariffs and Trade (GATT) 1994
Article VI: “Anti-Dumping and Countervailing Duties”
A product is to be considered as being introduced into the commerce of an importing country at less than its normal value, if the 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.
Countervailing duty cannot exceed the subsidy or bounty estimated.
Countervailing duty shall be understood to mean a special duty levied for the purpose of offsetting any bounty or subsidy bestowed, directly, or indirectly, upon the manufacture, production or export of any merchandise.

5. WTO Provisions Involved - DS449
Article X: “ Publication and Administration of Trade Regulations”
Article X:1: The prompt publication of certain measures of general application.
Article X:2: The prohibition on the enforcement of certain measures of general application before their official publication.
Article X:3: The requirement to administer measures of general application in a uniform, impartial and reasonable manner and to maintain or institute judicial, arbitral, or administrative tribunals or procedures for the review of administrative action relating to customs matters.

6. WTO Provisions Involved - DS449
Articles 10, 15, 19 of the Subsidies and Countervailing Measures (SCM) Agreement
Article 10: “Application of Article VI of GATT 1994”
Members shall take all necessary steps to ensure that the imposition of a countervailing duty on any product of the territory of any Member imported into the territory of another Member is in accordance with the provisions of Article VI of GATT 1994 and the terms of this Agreement.
Article 15: “Determination of Injury”
Article 19: “Imposition and Collection of Countervailing Duties”

7. WTO Provisions Involved - DS449
Articles 21 and 32 of the SCM Agreement
Article 21: “Duration and Review of Countervailing Duties and Undertakings”
Article 32: Each Member shall take all necessary steps to ensure the conformity of its laws, regulations and administrative procedures with the provisions of this Agreement as they may apply to the Member shall inform the Committee of any changes in its laws and regulations relevant to this Agreement and in the administration of such laws and regulations.

8. WTO Provisions Involved - DS449
Articles 9 and 11 of the Anti-Dumping Agreement
Article 9: “Imposition and Collection of Anti-Dumping Duties”
The decision whether or not to impose an anti-dumping duty are decisions to be made by the authorities of the importing Member and the amount of the anti-dumping duty to be imposed shall be the full margin of dumping or less.
Article 11: “Duration and Review of Anti-Dumping Duties and Price Undertakings”
An anti-dumping duty shall remain in force only as long as and to the extent necessary to counteract dumping which is causing injury.
The authorities shall review the need for the continued imposition of the duty, where warranted, on their own initiative or, provided that a reasonable period of time has elapsed since the imposition of the definitive anti-dumping duty, upon request by any interested party which submits positive information substantiating the need for a review.

9. Main WTO Issue - DS449
Application of Anti-Dumping and Countervailing Measures by the U.S. against
China since Nov 2006 on steel and carbon pipes and similar products.
Is it in conformity to apply AD and CVD simultaneously ?
Are simultaneous AD and CVD “double counting” ?
Is it legal to apply measures retrospectively since 2006 ?
-- AD and CVD can be applied by any WTO member
-- Should not cause “double remedies” or “double counting”
-- New AD or CVD may be applied after so published (Art X)

10. Positions of the Main Parties2 - DS449
China: A new US Law, PL of 13 Mar 2012, which allows concurrent application of AD and CVD to non-market economies retroactive to Nov 2006.
inconsistent with:
GATT 1994 Art. X, VI
SCM Art. 10, 15, 19, 21, 32
AD Art. 9, 11
2 "United States — Countervailing and Anti-dumping Measures on Certain Products from China - DISPUTE DS449." WTO., Appellate body .Web. 05 Oct

11. Positions of the Main Parties 3 - DS449
United States: US Law, PL of 13 Mar 2012,
provides Department of Commerce legal basis to apply AD and CVD
to non-market economies.
-- PL amends US Tariff Act of 1930
-- Clarifies method of calculating duties
-- Covers actions, investigations, applied or initiated to NME by
DOC since Nov 2006 since law is retroactive.
-- PL made effective and published 13 Mar 2012
3 "United States — Countervailing and Anti-dumping Measures on Certain Products from China - DISPUTE DS449." WTO., Appellate body .Web. 05 Oct

12. History & Context - DS449 US - China relationship good overall
-- Coinciding and diverging global interests.
-- Some common friends, some common foes.
-- Economies intertwined.
-- Intense trade, each desires the other’s
market.
-- Global vs. Regional Security Interests
- South China Sea issues.4
-- China designated a NME agreed in accession
to WTO
-- U.S. administration aggressive to China
during Obama’s first term.5 4
4 cfr.org/asia-and-pacific/armed-clash-south-china-sea/P27883
5 Malawer, Stuart S. “U.S.-China Litigation in the World Trade Organization”, New York Law Journal Vol. 250, No. 31, August 8, 2013, p.2

13. Prior Proceedings - DS449
The United States began launching simultaneous antidumping duty (AD) and countervailing duty (CVD) investigations of Chinese merchandise after the November 2006 congressional elections.6
US Court of Appeals for the Federal Circuit had a 1986 decision that CVD laws do not apply to imports from non-market economies.7
GPX International Tire Corporation v. United States before USCIT appealed to CAFC.
On Dec. 19, 2011, CAFC invalidates the application of U.S. anti-subsidy, or countervailing duty, law to nonmarket economy countries, including China. 8
CAFC found that the DOC lacked statutory authority to apply the U.S. CVD law to NME countries. 9
6 Feldman, Elliot J, and John J Burke. "Testing the Limits of Trade Law Rationality: The GPX Case and Subsidies in Non-MarketEconomies." American
University Law Review 62, no.4 (2013):
7 Addendum, report of the Panel, UNITED STATES – COUNTERVAILING AND ANTI-DUMPING MEASURES ON CERTAIN PRODUCTS FROM CHINA
8, 9 Caiazzo, Jill and Jacobs, Brenda A., Case Study: GPX International Tire V. US. Law360, New York (January 6, 2012, 1:52 PM EST) at

14. THE DECISION – DS449
Basic issue is the consistency of the contested national act with  WTO obligations.
The US law is inconsistent because a member cannot pass a measure and enforce it before making it public.
The US did not comply with the principle of transparency (cannot enforce a measure without notifying the other party that there is a new measure).

15. The Decision - DS449 The Appellate Body recommended on July 7, 2014:
that the Dispute Settlement Body request the US to bring the investigations and reviews identified in this Report, and in the Panel Report as modified by this Report, to be inconsistent with its obligations under the SCM Agreement into conformity with that Agreement.

16. Appelate Body Decision - DS449
-- reversed the Panel's Report, that, "although, through Section 1(b) and relevant determinations or actions made or taken by the United States between 20 November and13 March 2012 in respect of imports from China, the United States ha[d] enforced Section 1 before it ha[d] been officially published, the United States has not acted inconsistently with Article X:2 of the GATT 1994, as Section 1 does not 'effect’ an advance in a rate of duty or other charge on imports under an established and uniform practice,
-- declared moot and of no legal effect:
the Panel's finding that the USDOC's practice of applying countervailing duties to China as an NME country between 2006 and 2012 was presumptively lawful under US municipal law, as the USDOC's interpretation of US countervailing duty law governed in the absence of a binding judicial determination indicating otherwise; and (ii) the Panel's finding that it is potentially relevant, and at a minimum not inappropriate, to address the issue of whether the USDOC's practice prior to enactment of Section 1 of PL was lawful under US municipal law, for purposes of an analysis under Article X:2 of the GATT 1994.
WT/DS449/AB/R United States - Countervailing and Anti-Dumping Measures on Certain Products from China - AB Report of the Appellate Body.

17. Appelate Body Decision - DS449
In other words ….
-- that the US enforced Section PL (between 20 Nov 2006 and13 Mar 2012) before it had been officially published .…and….. that effects an advance in a rate of duty; both of which are inconsistent with Article X:2 of the GATT 1994.
-- declared moot and of no legal effect:
the USDOC's interpretation that it was legal to apply countervailing duty between 2006 and since there was no binding judicial determination indicating otherwise;
(ii) there is no need to address whether the USDOC's practice prior to enactment of PL was lawful under US municipal law, for purposes of an analysis under Article X:2 of the GATT 1994.

18. Implementation of Adopted Reports 10
21 August 2014: The US informed the DSB that it intended to implement the DSB recommendations and rulings according to its WTO obligations and that it would need a reasonable period of time to do so.
20 February 2015: China and the US informed the DSB they agreed to 12 months. Accordingly, the reasonable period of time expired on 22 July
10 "United States — Countervailing and Anti-dumping Measures on Certain Products from China - DISPUTE DS449." WTO. N.p., n.d. Web. 05 Oct

19. Implementation of Adopted Reports 11
23 July 2015: China and the United States informed the DSB that they had mutually agreed to modify the reasonable period of time so as to expire on 5 August 2015.
On 21 August 2015, China and the United States informed the DSB of Agreed Procedures under Articles 21 and 22 of the DSU.
11 "United States — Countervailing and Anti-dumping Measures on Certain Products from China - DISPUTE DS449." WTO. N.p., n.d. Web. 05 Oct

20. Policy Proposals - DS449
If the US doesn’t comply with the agreement, China can complain to the WTO and authorize sanctions.
Better internal communications among US departments, agencies, and courts.
Develop precise definition of non-market economy.
Advocate at WTO for only two categories: market or non-market economies.
Recognize China and others according to precise definition.

21. Conclusions - DS449
Dispute Resolution is quick, rules based; respectful of member state laws.
Resolutions avoid lengthy, costly litigation in foreign legal systems.
Resolutions help avoid “trade wars” or actual hostilities.
Prior cases build precedent for future cases.
Seems to get overly legalistic and away from rules.
WTO will evolve well if it sticks with agreed principles.
DS449 will come up again at end 2016 relative to NME designation.

22. WTO Case Study - DS449
Thank You !
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