Kenan Marks Steven Mihalisko Eric Sammons

1. European Communities- Definitive Anti-Dumping Measures on Certain Iron or Steel Fasteners from China(DS397) Kenan Marks Steven Mihalisko Eric Sammons

2. Presentation Outline Industry Snapshot and Case Summary History and context of the case Positions of parties involved: Main WTO Issues  Article 9(5) of the Basic Anti-Dumping Regulation  Specific infractions of AD agreement Conclusions and Panel Recommendations Outcomes of Parties Involved

3. Case Summary/Industry Snapshot The case relates to the import of screws and bolts from mainland China, which attract an extra duty of up to 85% when entering the EU The dispute panel supported China’s claims that the EU had violated world trade rules through the imposition of antidumping duties on imports of Chinese screws, bolts, and other types of fasteners *The terms “European Communities” and “European Union” are used interchangeably throughout this presentation

4. History and Context 07/31/09 – China requested consultations with European Communities concerning article 9(5) 10/12/09 – China requested establishment of a panel 10/23/10 – DSB establishes panel 12/03/10 – Panel report was circulated to members: The panel has found that the EU discriminated against Chinese exporters compared to exporters from other countries

5. Basic Anti-Dumping Regulation The WTO agreements uphold the principles of binding tariffs, but there are exceptions: • Actions taken against dumping (selling at an unfairly low price) • Subsidies and special “countervailing” duties to offset the subsidies • Emergency measures to limit imports temporarily, designed to “safeguard” domestic industries

6. Basic Anti-Dumping Regulation WTO agreement allows governments to act against dumping: In order to do that the government has to: • Show that dumping is taking place • Calculate the extent of dumping • Show that the dumping is causing genuine (“material”) injury or threatening to do so

7. Summary of Complaints by China China's complaint incorporated a 3-pronged approach based on three broad concepts: • Principle • Product • Procedure

8. Principle The EU was improperly imposing anti-dumping duties accordingly to Article 9(5) of its' own Basic Anti-Dumping Regulation in a manner inconsistent with the a number of international obligations including: • WTO Agreement • GATT 1994 • Basic Anti-Dumping Agreement

9. Product China illustrated the situation regarding the alleged anti-dumping measures with the case of EU imports of certain iron or steel fasteners originating from the People's Republic of China and argued these actions to be inconsistent with parts of: • GATT 1994 • Anti-Dumping Agreement • China's Protocol of Accession

10. Procedure Concerning the EU's alleged inconsistent actions regarding a number of the aforementioned international obligations, China asserted that a number of procedural principles were violated including: • Scope of like product • Extent of domestic industry • Conduct of injury analysis • Calculation of anti-dumping margin

11. Third Parties • Brazil • Canada • Chile • Colombia • India • Japan • Norway • Chinese Taipei • Thailand • Turkey • United States of America

12. Notable Third Party Positions • Determination of domestic industry • Methodology regarding the the identification of the volume of imports and the determination of dumped prices • Concept of “like product” and “product under consideration” • Market economy treatment and individual treatment assessments within the framework of dumping margin calculation.

13. Anti-Dumping Principles With respect to Article 9(5) of Council Regulation (EC) No. 384/96 on protection against dumped imports from countries not Members of the EC and its amendments, as codified and replaced by Council Regulation (EC) No. 1225/2009: • “The EC violated Articles 6.10, 9.2, 9.3, and 9.4 of the AD Agreement,Articles I:1 and X:3(a) of the GATT 1994 and Article XVI:4 of the Agreement Establishing the WTO as well as Article 18.4 of the AD Agreement.”

14. AD Violations Against EU Regulations Brought into Question • 1. Article 9(5) of Council Regulation (EC) No. 384/96 of 22 December 1995 on protection against dumped imports from countries not members of the EC, as amended. • 2. Council Regulation (EC) No. 91/2009 of 26 January 2009 imposing a definitive antidumping duty on imports of certain iron or steel fasteners originating in China. Basis for Dispute 1. Principles 2. Products 3. Procedures

15. Principles • With respect to Article 9(5) of Council Regulation (EC) No. 384/96 on protection against dumped imports from countries not Members of the EC and its amendments, as codified and replaced by Council Regulation (EC) No. 1225/2009: • “The EC violated Articles 6.10, 9.2, 9.3, and 9.4 of the AD Agreement,Articles I:1 and X:3(a) of the GATT 1994 and Article XVI:4 of the Agreement Establishing the WTO as well as Article 18.4 of the AD Agreement.”

16. Products • With respect to Council Regulation (EC) No. 91/2009 of 26 January 2009 imposing a definitive anti-dumping duty on imports of certain iron and steel fasteners from China: • The EC violated Articles 6.10, 9.2, 9.4 of the AD Agreement since it made the benefit of an individual margin of dumping and the imposition of an individual anti-dumping duty dependent on compliance with the conditions listed in Article 9(5) of Council Regulation (EC) No. 384/96 as amended;

17. Products Con’t • The EC violated Article 5.4 of the AD Agreement because it failed to properly examine before initiating the investigation whether the standing thresholds were met and because the complainants did not meet the standing thresholds; • In its definition of the domestic industry, the EC violated Articles 4.1 and 3.1 of the AD Agreement. • The EC violated Articles 2.1 and 2.6 of the Anti-Dumping Agreement since it erroneously considered fasteners produced and sold by EC's industry, fasteners produced and sold on the domestic market in India and fasteners produced in China and sold to the EC as being "alike”

18. Products Con’t • The EC violated Article 2.4 of the AD Agreement since it failed to make a comparison of the normal value and export price on the basis of the full product control number (PCN) and because it failed to make the necessary adjustments for differences that affect the price comparability; • The EC violated Articles 3.1 and 3.2 of the AD Agreement by failing to make a product comparison on the basis of the full PCNs and by comparing standard fasteners without making any adjustments for the differences affecting price comparability when determining the price undercutting margin; • The EC violated Articles 3.1, 3.2, 3.4, and 3.5 of the AD Agreement in its examination of the volume of dumped imports;

19. Products Con’t • The EC violated Articles 3.1 and 3.4 of the AD Agreement in its examination of the impact of the dumped imports on domestic producers of the like product; • The EC violated Articles 3.1 and 3.5 of the AD Agreement because it failed to properly demonstrate that dumped imports are, through the effects of dumping, causing injury to the domestic industry and because it failed to ensure that injury caused by other factors, in particular the increase in raw material prices and exports by the EC producers, was not attributed to thealleged dumped imports;

20. Procedures • because it failed to disclose the identity and volume of production of the complainants • since it failed to disclose information concerning the normal value determination and the comparison with export prices including adjustments affecting price comparability; • since the non-confidential versions of the EC's producers' questionnaire responses and of the analogue country producer's questionnaire response were largely deficient; • by failing to disclose Eurostat data as well as any explanations on how it had estimated the EC production; • by failing to disclose information concerning the domestic industry; • by disclosing the document entitled "Assessment of Market Economy Treatment Claims by nine producers in the PRC" while confidential treatment had been requested;

21. Procedures Con’t • Article 12.2.2 of the AD Agreement by failing to indicate all relevant information concerning the individual treatment ("IT") determinations; • Article 6.1.1 of the AD Agreement by limiting the time period for the submission of the responses to market economy treatment and/or individual treatment questionnaires to 15 days as of the date of publication of the notice of initiation.

22. Conclusions and Recommendations of the Panel • The Panel found that Article 9(5) of the Basic AD Regulation was inconsistent with Articles 6.10, 9.2 and 18.4 of the AD Agreement, Article I:1 of the GATT 1994 and Article XVI:4 of the WTO Agreement • The Panel rejected China's claims with respect to the standing determination; definition of domestic industry; product under consideration; dumping determination; price undercutting determination; treatment of imports from non-sampled producers; consideration of the consequent impact of dumped imports on the domestic industry 

23. Conclusions and Recommendations of the Panel • The Panel recommended that the DSB request the European Union to bring its measures into conformity with its obligations under the WTO Agreement • The Panel declined to make a suggestion on how the DSB recommendations and rulings may be implemented by the European Union

24. Current Status of the Case • The Panel Report was circulated to members in December, 2010 • The decisions of the panel have not yet been appealed or adopted