"To examine, in the light of the relevant provisions of the covered agreements cited by Japan in document WT/DS184/2, the matter referred to the DSB by Japan in document WT/DS184/2, and to make such findings as will assist the DSB in making the recommendations or in giving the rulings provided for in those agreements".
Chairman: Mr. Harsha V. Singh
Members: Mr. Yanyong Phuangrach
Ms. Elena Lidia di Vico
All Others Rate 35.06%.
The "All Others" rate, applicable to companies not investigated, was calculated as the weighted average of the margins calculated for the three investigated respondents. Pursuant to its earlier critical circumstances finding, USDOC ordered suspension of liquidation and posting of cash deposits or bonds for entries made 90 days prior to the 19 February 1999 effective date of the preliminary determination of dumping, that is, retroactive to 21 November 1998.10
All Others Rate 29.30%.11
USDOC also made a final negative determination of critical circumstances as to NSC and NKK based on the fact that they had final dumping margins below the 25 per cent threshold used to impute importer knowledge of dumping. However, USDOC continued to find that critical circumstances existed as to KSC and the "all others" companies.
(a) find that the specific anti-dumping measures imposed by the United States on hot-rolled steel from Japan are inconsistent with various provisions of the AD Agreement, as follows:
· USDOC’s application of adverse facts available to KSC’s dumping margin was inconsistent with Articles 2.3, 6.8, 9.3, and Annex II;
· USDOC’s application of adverse facts available and treatment of the facts with respect to NKK’s dumping margin were inconsistent with Articles 2.4, 6.1, 6.6, 6.8, 6.13, 9.3, and Annex II;
· USDOC’s application of adverse facts available and treatment of the facts with respect to NSC’s dumping margin were inconsistent with Articles 2.4, 6.6, 6.8, 6.13, 9.3, and Annex II;
· USDOC’s inclusion of margins based on partial facts available in the calculation of the "all others rate" was inconsistent with Article 9.4;
· USDOC’s exclusion and replacement of certain home market sales in the calculation of normal value through use of the 99.5 per cent arm’s length test was inconsistent with Articles 2.1, 2.2, and 2.4;
· USDOC’s application of a new policy with respect to preliminary critical circumstances determinations was inconsistent with Articles 10.1, 10.6, and 10.7;
· USITC’s application of the captive production provision was inconsistent with Articles 3.1, 3.2, 3.4, 3.5, 3.6 and 4.1;
· USITC’s finding of a causal connection between imports and the domestic industry’s injury was inconsistent with Articles 3.1, 3.4, and 3.5;
and to recommend that the DSB request the United States to bring these measures into conformity with the AD Agreement.
(b) find that the following actions undertaken by the United States were inconsistent with GATT 1994 Article X:3, including:
· USDOC’s accelerated proceeding;
· USDOC’s application of a revised critical circumstances policy;
· USDOC’s failure to correct, prior to the final determination, the clerical error committed in calculating NKK's preliminary margin;
· USDOC’s resort to adverse facts available with respect to respondents, coupled with USDOC’s and USITC’s decisions against applying facts available with respect to petitioners;
· USITC’s limited analysis to two years of the three-year period of investigation, in abandonment of its normal policy to analyze all three years;
and to recommend that the DSB request the United States to bring these actions into conformity with the GATT 1994;
(c) find that the United States’ anti-dumping laws, regulations, and administrative procedures governing:
· the use of adverse "facts available" are inconsistent with Article 6.8 and Annex II of the AD Agreement;
· the calculation of an "all others" rate based on partial facts available are inconsistent with Article 9.4 of the AD Agreement;
· the exclusion and replacement of certain home market sales in the calculation of normal value by the arm's length test are inconsistent with Articles 2.1, 2.2, and 2.4 of the AD Agreement;
· "critical circumstances," including the generally applicable interpretations reflected in the Policy Bulletin issued on 8 October 1998, are inconsistent with Articles 10.1, 10.6 and 10.7 of the AD Agreement;
· the focus on the merchant market sales to the exclusion of the remainder of the domestic industry when determining injury by reason of imports are inconsistent with Articles 3.1, 3.2, 3.4, 3.5, 3.6, and 4.1 of the AD Agreement;
and recommend that the DSB request the United States to ensure, as stipulated in Article XVI:4 of the WTO Agreement and Article 18.4 of the AD Agreement, the conformity of the above-listed elements of its anti-dumping laws, regulations, and administrative procedures with its obligations under the AD Agreement;
(d) recommend that, if the Panel's findings result in a determination that the imported product was either not dumped or that it did not injure the domestic industry, the DSB further request that the United States revoke its anti-dumping duty order and reimburse any anti-dumping duties collected;15
(e) recommend that, if the Panel's findings result in a determination that the imported product was dumped to a lesser extent than the duties actually imposed, the DSB further request that the United States reimburse the duties collected to the extent of the difference.
· the information submitted to this Panel by Japan that was not made available to US authorities during the course of the anti‑dumping investigation at issue will be disregarded in this proceeding;
· Japan’s claim concerning the United States’ general practice with respect to "facts available" was not raised in Japan’s request for the establishment of a panel and is therefore not included in this Panel’s terms of reference;
· the specific anti‑dumping measures imposed by the United States on hot‑rolled steel from Japan are consistent with the provisions of the Anti‑Dumping Agreement identified by Japan under point (a);
· none of the actions identified by Japan under point (b) was inconsistent with Article X:3 of the GATT 1994;
· the United States’ anti‑dumping laws, regulations, and administrative procedures governing the issues identified by Japan under point (c) are not inconsistent with the provisions of the Anti‑Dumping Agreement identified in that paragraph.
· The specific remedies requested by Japan in its first submission, reproduced at points (d) and (e) above, are contrary to established practice and the DSU.
"The inherent flexibility of the international procedure, and its tendency to be free from technical rules of evidence applied in municipal law, provide the "evidence" with a wider scope in international proceedings…. Generally speaking, international tribunals have not committed themselves to the restrictive rules of evidence in municipal law. They have found it justified to receive every kind and form of evidence, and have attached to them the probative value they deserve under the circumstances of a given case".29
It seems to us that, particularly in considering allegations under Article X of GATT 1994, we should exercise our discretion to allow the presentation of evidence concerning the administration of the defending Members' anti-dumping laws, which might in any event go beyond the specific facts made available to the administering authority in accordance with appropriate domestic procedures during the course of a single anti-dumping investigation.
"As a panel request is normally not subjected to detailed scrutiny by the DSB, it is incumbent upon a panel to examine the request for the establishment of the panel very carefully to ensure its compliance with both the letter and the spirit of Article 6.2 of the DSU. It is important that a panel request be sufficiently precise for two reasons: first, it often forms the basis for the terms of reference of the panel pursuant to Article 7 of the DSU; and, second, it informs the defending party and the third parties of the legal basis of the complaint." (emphasis added)39
In this case, we conclude that Japan has failed to state a claim at all with respect to the "general practice" of the USDOC concerning application of facts available. Assuming such practice could be challenged separately from a challenge to the statutory provision on which it is based, Japan has failed to present this problem in the request for establishment in this dispute. Thus, we conclude that the USDOC "general practice" regarding application of facts available is not within our terms of reference. Given that we find no claim was stated in this respect in the request for establishment at all, we consider that neither the United States nor potential third parties were informed of the legal basis of a complaint in this respect.
"in its assessment of the facts of the matter, the panel shall determine whether the authorities' establishment of the facts was proper and whether their evaluation of those facts was unbiased and objective. If the establishment of the facts was proper and the evaluation was unbiased and objective, even though the panel might have reached a different conclusion, the evaluation shall not be overturned;"
The question of whether the establishment of facts was proper does not, in our view, involve the question whether all relevant facts were considered including those that might detract from an affirmative determination. Whether the facts were properly established involves determining whether the investigating authorities collected relevant and reliable information concerning the issue to be decided - it essentially goes to the investigative process. Then, assuming that the establishment of the facts with regard to a particular claim was proper, we consider whether, based on the evidence before the US investigating authorities at the time of the determination, an unbiased and objective investigating authority evaluating that evidence could have reached the conclusions that the US investigating authorities reached on the matter in question.40 In this context, we consider whether all the evidence was considered, including facts which might detract from the decision actually reached by the investigating authorities.
"the panel shall interpret the relevant provisions of the Agreement in accordance with customary rules of interpretation of public international law. Where the panel finds that a relevant provision of the Agreement admits of more than one permissible interpretation, the panel shall find the authorities' measure to be in conformity with the Agreement if it rests upon one of those permissible interpretations."
Thus, in considering those aspects of the US determination which stand or fall depending on the interpretation of the AD Agreement itself rather than or in addition to the analysis of facts, we first interpret the provisions of the AD Agreement. As the Appellate Body has repeatedly stated, panels are to consider the interpretation of the WTO Agreements, including the AD Agreement, in accordance with the principles set out in the Vienna Convention on the Law of Treaties (the "Vienna Convention"). Thus, we look to the ordinary meaning of the provision in question, in its context, and in light of its object and purpose. Finally, we may consider the preparatory work (the negotiating history) of the provision, should this be necessary or appropriate in light of the conclusions we reach based on the text of the provision. We then evaluate whether the US interpretation is one that is "permissible" in light of the customary rules of interpretation of international law. If so, we allow that interpretation to stand, and unless there is error in the subsequent analysis of the facts under that legal interpretation under the standard of review under Article 17.6(i), the challenged action is upheld.
"In cases in which any interested party refuses access to, or otherwise does not provide, necessary information within a reasonable period or significantly impedes the investigation, preliminary and final determinations, affirmative or negative, may be made on the basis of the facts available. The provisions of Annex II shall be observed in the application of this paragraph."
Annex II sets out additional conditions and considerations relevant to the application of facts available in a particular case.
"The evidence indicates that the requested information was routinely maintained by NSC in the normal course of business, but that obtaining it was simply not a priority. Regardless of who specifically knew about this information, the sales department or the production department, the data existed and could have easily been obtained. The fact that NSC was able to provide this information shortly after the preliminary determination also supports the conclusion that it could have done so within the time requested. Moreover, it is impossible for the Department to determine whether NSC's claims of inadvertent error are valid or merely self-serving. Thus, they are insufficient to rebut the evidence establishing that the requested information was readily available. …
Because NSC's conversion data was untimely and did not constitute a minor correction the Department informed NSC at verification that it would not accept the theoretical to actual weight conversion factors and returned the data on April 12, 1999. …
Because NSC failed to timely provide requested information, …, the Department has made its determination with respect to the theoretical weight sales on the basis of the facts available. Further, the Department finds that NSC, by not submitting a theoretical weight conversion factor it could have provided when originally requested until well after the time for response had passed, failed to cooperate by not acting to the best of its ability…The fact that NSC ultimately did provide such a factor is proof that it could have done so much earlier…."57
"Because NKK's conversion factor data were not timely submitted, the Department rejected these factors in a letter dated April 12, 1999. The Department, therefore, has not considered these data or retained them in the official record of the proceeding. … The Department does not agree with NKK's assertion that these data were verified. Rather, at verification, the Department specifically informed NKK and its counsel that the Department would not accept the conversion factor and would specifically instruct NKK to submit this information on the record if the Department determined that it was timely. However, any arguments as to the accuracy of these data are moot because the data in question are no longer part of the record before the Department…
Further the Department finds that NKK, by not submitting a theoretical weight conversion factor it could have provided when originally requested until well after the time for response had passed, failed to cooperate by not acting to the best of its ability. NKK's claims that it could calculate a conversion factor in February of 1999 but was unable to derive such a factor when the questionnaire responses were due, does not withstand scrutiny. Although NKK argues that it did not understand what the Department wanted when it originally requested a "conversion factor", although this was not stated at the time, and that it lacked the data necessary to calculate one,… it should have proposed to the Department the sort of conversion factor it ultimately did calculate, explaining why a more accurate one might not be practicable. Instead, NKK merely dismissed the Department's repeated requests. The fact that NKK ultimately did provide such a factor is the proof that they could have done so much earlier."58
"It is clear, however, that if an interested party does not cooperate and thus relevant information is being withheld from the authorities, this situation could lead to a result which is less favourable to the party than if the party did cooperate".
The parties have argued extensively concerning whether this provision allows an investigating authority to conclude that a party has failed to cooperate and therefore resort to the application of "adverse" facts available. Japan maintains that this provision merely recognizes the possibility that a failure to cooperate might result in a less favourable result for the non-cooperating party, but does not allow for any deliberate action on the part of investigating authorities to ensure such a less favourable result. The United States, on the other hand, argues that the entire purpose of allowing investigating authorities to resort to facts available would be defeated if, regardless of the failure of a party to cooperate, investigating authorities were obliged in all circumstances to seek out "neutral" facts available.
"In essence, for purposes of the [constructed export price] calculation, the [US] statute treats the exporter and the US affiliate collectively, rather than independently, regardless of whether the exporter controls the affiliate. Accordingly, KSC's argument that it does not "control" CSI is misplaced and irrelevant.
Because the statute requires that the Department base its margin calculations for the CSI sales on record information concerning the CSI sales themselves, the Department required that KSC and CSI, collectively, provide the necessary price and cost data for KSC's US sales through CSI. It is also undisputed that KSC and CSI failed to provide this necessary information….KSC and CSI have neither provided the data on CSI's sales, as requested by the Department, nor demonstrated to the Department's satisfaction that this is not possible. Therefore, the Department finds that KSC and CSI have failed to cooperate by not acting to the best of their ability to comply with the Department's requests for information with respect to the CSI sales. Therefore, we have used an adverse inference in selecting the facts available with respect to the CSI sales.
Allowing a producer and its US affiliate to decline to provide US cost and sales data on a large portion of their US sales would create considerable opportunities for such parties to mask future sales at less than fair value through the US affiliate. The fact that the affiliate is a petitioner does not allay such concerns. Thus, this fact does not constitute an exception to the principle that the Department may make an adverse inference with respect to sales for which data is not provided unless the foreign exporter and its US affiliate have acted to the best of their ability to provide such data.
While it is clear that KSC and CSI collectively have not acted to the best of their ability, we also disagree with KSC's claim that it alone acted to the best of its ability. … After careful consideration of all of the evidence on the record, the Department finds that KSC did not act to the best of its ability with respect to the requested CSI data.
CSI is a joint venture between KSC and a large Brazilian mining operation, Companhia Valle do Rio Doce ("CVRD"). Through their respective US affiliates, KSC and CVRD each own 50 per cent of CSI. KSC's claim that it acted to the best of its ability with respect to this issue rests on its assertion that it was powerless to compel CSI to provide the Department with this data, given that CSI as a petitioner in this case, refused to cooperated. Some of the most important evidence contradicting KSC on this issue, including information pertaining to the board and the Shareholders' Agreement, constitutes business proprietary information, and are discussed only in our proprietary Analysis Memorandum, which is hereby incorporated by reference. Generally, however, the record shows that, although KSC could have been much more active in obtaining the cooperation of CSI in this investigation, it limited its efforts to merely requesting the required data and otherwise took a "hands-off" approach with respect to CSI's alleged decision not to provide this data. For example, KSC officials stated that KSC did not instruct its members of the CSI board to address the issue, did not invoke the Shareholder's Agreement, and did not discuss this issue with its joint venture partner. This does not reach the "best efforts" threshold embodied in § 776(b). Furthermore, the fact that KSC has provided a great deal of information and has substantially cooperated with respect to other issues does not relieve it of the requirement to act to the best of its ability to provide the requested CSI information. With respect to the CSI sales, KSC has provided only minimal volume and value information and has not acted to the best of its ability to obtain further information. Thus, as to the missing CSI data, it cannot be said that KSC was fully cooperative and made every effort to obtain and provide the information requested by the Department. Therefore, even though full cooperation by KSC would not constrain the Department from using adverse facts available specifically with respect to the CSI sales, we do not agree with KSC's argument that it has "substantially cooperated" during this investigation….
While the Department has considered that the record supports KSC's claim that it did make some effort to obtain the data and the CSI's management rebuffed these efforts, the record also shows that KSC essentially acquiesced in CSI's decision not to provide this data. Given KSC's relationship with this 50/50 joint venture, as detailed in the Home Market Sales Verification Report, dated 26 March 1999, this did not constitute making its best efforts to obtain the data."64
"When the authorities have limited their examination in accordance with the second sentence of paragraph 10 of Article 6, any anti‑dumping duty applied to imports from exporters or producers not included in the examination shall not exceed:
(i) the weighted average margin of dumping established with respect to the selected exporters or producers or,
(ii) where the liability for payment of anti‑dumping duties is calculated on the basis of a prospective normal value, the difference between the weighted average normal value of the selected exporters or producers and the export prices of exporters or producers not individually examined,
provided that the authorities shall disregard for the purpose of this paragraph any zero and de minimis margins and margins established under the circumstances referred to in paragraph 8 of Article 6. The authorities shall apply individual duties or normal values to imports from any exporter or producer not included in the examination who has provided the necessary information during the course of the investigation, as provided for in subparagraph 10.2 of Article 6" (emphasis added).
"(A) General rule
For purposes of this subsection and section 1673b(d) of this title, the estimated all-others rate shall be an amount equal to the weighted average of the estimated weighted average dumping margins established for exporters and producers individually investigated, excluding any zero and de minimis margins, and any margins determined entirely under section 1677e of this title [i.e., any margins determined entirely on the basis of facts available].
If the estimated weighted average dumping margins established for all exporters and producers individually investigated are zero or de minimis margins, or are determined entirely under section 1677e of this title, the administering authority may use any reasonable method to establish the estimated all-others rate for exporters and producers not individually investigated, including averaging the estimated weighted average dumping margins determined for the exporters and producers individually investigated".67
"Sales to affiliated customers in the home market not made at arm's length prices (if any) were excluded from our analysis because we considered them to be outside the ordinary course of trade. See 19 CFR 351,102. To test whether these sales were made at arm's length, we compared on a model-specific basis the prices of sales to affiliated and unaffiliated customers net of all discounts, rebates, billing adjustments, movement charges, direct selling expenses, and packing. Where, for the tested models of subject merchandise, prices to the affiliated party were on average 99.5 per cent or more of the price to unaffiliated parties, we determined that sales made to the affiliated party were at arm's length and used those sales in determining [normal value]. …86
"Provisional measures and anti-dumping duties shall only be applied to products which enter for consumption after the time when the decision taken under paragraph 1 of Article 7 and paragraph 1 of Article 9, respectively, enters into force, subject to the exceptions set out in this Article"
"10.6 A definitive anti‑dumping duty may be levied on products which were entered for consumption not more than 90 days prior to the date of application of provisional measures, when the authorities determine for the dumped product in question that:
(i) there is a history of dumping which caused injury or that the importer was, or should have been, aware that the exporter practises dumping and that such dumping would cause injury, and
(ii) the injury is caused by massive dumped imports of a product in a relatively short time which in light of the timing and the volume of the dumped imports and other circumstances (such as a rapid build‑up of inventories of the imported product) is likely to seriously undermine the remedial effect of the definitive anti‑dumping duty to be applied, provided that the importers concerned have been given an opportunity to comment.
10.7 The authorities may, after initiating an investigation, take such measures as the withholding of appraisement or assessment as may be necessary to collect anti‑dumping duties retroactively, as provided for in paragraph 6, once they have sufficient evidence that the conditions set forth in that paragraph are satisfied".
"If a petitioner alleges critical circumstances in its original petition, or by amendment at any time more than 20 days before the date of a final determination by [USDOC], then [USDOC] shall promptly (at any time after the initiation of the investigation under this part) determine, on the basis of the information available at that time, whether there is a reasonable basis to believe or suspect that—
(A) (i) there is a history of dumping and material injury by reason of dumped imports in the United States or elsewhere of the subject merchandise, or
(ii) the person by whom, or for whose account, the merchandise was imported knew or should have known that the exporter was selling the subject merchandise at less than its fair value and that there was likely to be material injury by reason of such sales, and
(B) there have been massive imports of the subject merchandise over a relatively short period".103
"88. As indicated above, the concept of mandatory as distinguished from discretionary legislation was developed by a number of GATT panels as a threshold consideration in determining when legislation as such – rather than a specific application of that legislation – was inconsistent with a Contracting Party's GATT 1947 obligations. The practice of GATT panels was summed up in United States – Tobacco as follows:
… panels had consistently ruled that legislation which mandated action inconsistent with the General Agreement could be challenged as such, whereas legislation which merely gave the discretion to the executive authority of a contracting party to act inconsistently with the General Agreement could not be challenged as such; only the actual application of such legislation inconsistent with the General Agreement could be subject to challenge. (emphasis added)
89. Thus, the relevant discretion, for purposes of distinguishing between mandatory and discretionary legislation, is a discretion vested in the executivebranch of government". (footnotes omitted)105
We therefore consider whether the statute in question requires USDOC to take action which contravenes the US obligations under the WTO AD Agreement.
"(i) there is a history of dumping which caused injury or that the importer was, or should have been, aware that the exporter practices dumping and that such dumping would cause injury, and
(ii) the injury caused by massive dumped imports of a product in a relatively short time which in light of the timing and the volume of the dumped imports and other circumstances (such as a rapid build-up of inventories of the imported product) is likely to seriously undermine the remedial effect of the definitive anti-dumping duty to be applied, provided that the importers concerned have been given an opportunity to comment".
"Determination of Injury9
3.1 A determination of injury for purposes of Article VI of GATT 1994 shall be based on positive evidence and involve an objective examination of both (a) the volume of the dumped imports and the effect of the dumped imports on prices in the domestic market for like products, and (b) the consequent impact of these imports on domestic producers of such products.
3.2 With regard to the volume of the dumped imports, the investigating authorities shall consider whether there has been a significant increase in dumped imports, either in absolute terms or relative to production or consumption in the importing Member. With regard to the effect of the dumped imports on prices, the investigating authorities shall consider whether there has been a significant price undercutting by the dumped imports as compared with the price of a like product of the importing Member, or whether the effect of such imports is otherwise to depress prices to a significant degree or prevent price increases, which otherwise would have occurred, to a significant degree. No one or several of these factors can necessarily give decisive guidance.
3.4 The examination of the impact of the dumped imports on the domestic industry concerned shall include an evaluation of all relevant economic factors and indices having a bearing on the state of the industry, including actual and potential decline in sales, profits, output, market share, productivity, return on investments, or utilization of capacity; factors affecting domestic prices; the magnitude of the margin of dumping; actual and potential negative effects on cash flow, inventories, employment, wages, growth, ability to raise capital or investments. This list is not exhaustive, nor can one or several of these factors necessarily give decisive guidance.
3.5 It must be demonstrated that the dumped imports are, through the effects of dumping, as set forth in paragraphs 2 and 4, causing injury within the meaning of this Agreement. The demonstration of a causal relationship between the dumped imports and the injury to the domestic industry shall be based on an examination of all relevant evidence before the authorities. The authorities shall also examine any known factors other than the dumped imports which at the same time are injuring the domestic industry, and the injuries caused by these other factors must not be attributed to the dumped imports. Factors which may be relevant in this respect include, inter alia, the volume and prices of imports not sold at dumping prices, contraction in demand or changes in the patterns of consumption, trade restrictive practices of and competition between the foreign and domestic producers, developments in technology and the export performance and productivity of the domestic industry.
3.6 The effect of the dumped imports shall be assessed in relation to the domestic production of the like product when available data permit the separate identification of that production on the basis of such criteria as the production process, producers' sales and profits. If such separate identification of that production is not possible, the effects of the dumped imports shall be assessed by the examination of the production of the narrowest group or range of products, which includes the like product, for which the necessary information can be provided.
9 Under this Agreement the term "injury" shall, unless otherwise specified, be taken to mean material injury to a domestic industry, threat of material injury to a domestic industry or material retardation of the establishment of such an industry and shall be interpreted in accordance with the provisions of this Article.
"For the purposes of this Agreement, the term "domestic industry" shall be interpreted as referring to the domestic producers as a whole of the like products or to those of them whose collective output of the products constitutes a major proportion of the total domestic production of those products,"
"[I]n defining the domestic industry, the Commission's general practice has been to include in the industry all of the domestic production of the like product, whether toll-produced, captively consumed or sold in the domestic merchant market. Based on our finding that the domestic like product consists of all hot-rolled steel, we define the corresponding domestic industry as all producers of hot-rolled steel in the United States, as we did in the preliminary determination"137. (emphasis added)
"even in circumstances in which the captive production provision does not apply, the Commission has the discretion to consider the significant volume of captive production as a condition of competition. Accordingly, we have examined data both for the domestic industry as whole and for merchant market operations for purposes of our determination".139
"In the merchant market, the share held by subject imports increased from 5.0 per cent of apparent US consumption as measured by volume sold in 1996, to 10.2 per cent in 1997, and then increased again to 21.0 per cent in 1998. For the industry as a whole, the share held by subject imports increased from 2.0 per cent of apparent US consumption, as measured by volume sold in 1996, to 4.2 per cent in 1997, and then increased again to 9.3 per cent in 1998".140
"From 1997 to 1998, as apparent consumption increased significantly, operating income declined by more than half. On merchant market sales, the ratio of operating income to net sales declined from 5.9 per cent in 1997 to 0.6 per cent in 1998 and overall, the ratio declined from 5.5 per cent in 1997 to 2.6 per cent in 1998".141
"Accordingly, in light of the domestic industry's declining production, shipments, market share, prices, capacity utilization, and financial condition, in the face of increasing subject import volume and market share and declining subject import prices, we determine that the domestic industry producing hot-rolled steel is materially injured by reason of LTFV imports from Japan".142
"There is certainly nothing in the AD Agreement which precludes a sectoral analysis of the industry and/or market. Indeed, in many cases, such an analysis can yield a better understanding of the effects of imports, and more thoroughly reasoned analysis and conclusion".144
Again, however, such an analysis does not excuse the investigating authority from making the determination required by the AD Agreement concerning injury to the domestic industry as a whole.
"The domestic producers' production and shipments declined from 1997 to 1998, both on a merchant market and overall basis.98 The domestic industry's financial performance likewise deteriorated significantly. From 1997 to 1998, as apparent consumption increased significantly, operating income declined by more than half.99 On merchant market sales, the ratio of operating income to net sales declined from 5.9 per cent in 1997 to 0.6 per cent in 1998, and overall, the ratio declined from 5.5 per cent in 1997 to 2.6 per cent in 1998.100 101 This decline was due largely to declines in unit values of the industry's hot-rolled steel shipments and sales. As described above, unit values fell significantly in 1998 as subject imports increased in volume and market share".
98 CR & PR at Tables C-1 and C-2
99 CR & PR at Tables C-1 and C-2
100 CR & PR at Tables C-1 and C-2. In addition the domestic industry's productivity improved and COG's declined from 1997 to 1998. The domestic industry's productivity (measured in short tons per 1,000 hours worked) increased from 864.8 in 1996, to 905.3 in 1997 and to 938.7 in 1998. As discussed in our analysis of the price effects of the subject imports, the domestic industry's unit COG's declined from 1996 to 1998, but not by as much as the decline in the industry's unit values. CR & PR at Table C-1.
101 CR & PR at Table C-1. Aside from productivity, which increased during the investigation period, a number of the industry's other employment indicators declined somewhat during the period of investigation. CR & PR at Table III-5 (the number of workers declined from 33,965 in 1996, to 33,518 in 1997, to 32,885 in 1998; hours worked declined from 73,597 in 1996, to 71,634 in 1997, to 68,574 in 1998; wages paid were essentially flat from 1996 to 1998; hourly wages increased somewhat from $23.04 in 1996 to $24.13 in 1997, to $24.46 in 1998; unit production costs were $26.65 in 1996 and 1997 and declines somewhat to $26.06 in 1998). US producers' inventories were also relatively stable during the investigation period, both on an absolute basis and relative to production and shipments. CR & PR at Table III-4. Capital expenditures declined significantly from $1.7 billion in 1996, to $908 million in 1997, and to $715 million in 1998. CR & PR at Table VI-7. We also note that one firm filed for bankruptcy protection in September 1998 and another in February 1999. See CR & PR at Table III-1 nn.1 & 3; Petitioners' Prehearing brief at 51-52, 54; Respondents' Joint Prehearing Brief at 143. Both firms ***. See Questionnaire Responses of Geneva and Acme Metals, Inc." (footnotes in original)158