"To examine, in the light of the relevant provisions of the covered agreements cited by Korea in document WT/DS202/4, the matter referred to the DSB by Korea in that document, 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. Dariusz Rosati
Members: Mr. Roberto Azevedo
Mr. Eduardo Bianchi
(1) That the President impose a tariff-rate quota for a 4-year period on imports of line pipe, with the in-quota amount set at 151,124 tons in the first year, and with that amount to be increased by 10 per cent in each of the second, third, and fourth years; with over-quota imports to be subject to a duty of 30 per cent ad valorem in addition to current US tariffs;
(2) That the President, if he determines to allocate the overall quota, recognize the disproportionate growth and impact of the imports from Korea;
(3) That the President initiate international negotiations with Korea to address the underlying cause of the import surge and the serious injury to the domestic industry;
(4) Having made negative findings with respect to imports of line pipe from Canada and Mexico under section 311(a) of the NAFTA Implementation Act, that such imports be excluded from the tariff-rate quota; and
(5) That the tariff-rate quota not apply to imports of line pipe from Israel, or to any imports of line pipe entered duty-free from beneficiary countries under the Caribbean Basin Economic Recovery Act or the Andean Trade Preference Act.
(1) The US measure does not comply with Article XIII or Article XIX of the GATT 1994 nor does it comply with the requirements of Article 5 of the Agreement on Safeguards;
(2) Regardless of the type of measure, the measure violates Article XIX:I of the GATT 1994 and Articles 5.1 and 7.1 of the Agreement on Safeguards because the measure was not limited to the extent and the time necessary to remedy the injury and allow adjustment;
(3) The United States violated Article 2 of the Agreement on Safeguards, as well as Article I, Article XIII:1 and Article XIX of the GATT 1994 by exempting Mexico and Canada from the measure;
(4) The US measure did not respect the provisions of Article 9.1 of the Agreement on Safeguards regarding the exclusion of developing countries;
(5) The US measure is inconsistent with Article XIX of the GATT 1994 and Article 2 of the Agreement on Safeguards because imports did not increase suddenly, sharply and recently;
(6) The United States failed to demonstrate that the US line pipe industry was suffering serious injury as required by Article XIX of the GATT 1994 and Articles 3.1 and 4 of the Agreement on Safeguards;
(7) The United States failed to demonstrate a causal relationship between increased imports and serious injury in violation of Article XIX of the GATT 1994 and Article 4 of the Agreement on Safeguards;
(8) The ITC’s threat of serious injury determination violated Articles 2 and 4 of the Agreement on Safeguards and Article XIX of the GATT 1994;
(9) The United States failed to demonstrate the unforeseen developments which led to the increased imports which caused serious injury;
(10) The US decision did not satisfy the requirements of emergency action of Article 11 of the Agreement on Safeguards or Article XIX of the GATT 1994;
(11) The United States violated the obligation in Article 12.3 of the Agreement on Safeguards to consult concerning the measure before the measure is imposed; and
(12) The United States violated the compensation provisions of Article 8.1 of the Agreement on Safeguards.
(1) generally, the full confidential record on which the ITC actually based its determination. The burden should be on the United States to demonstrate why the full deliberative record of the ITC should not be reviewed by the Panel; and
(2) specifically, information regarding pricing data (since declines in prices were a key element of the ITC majority’s causation determination); and information regarding certain producers whose financial data negatively affected industry profitability for reasons not related to line pipe; and
(3) the ITC’s Economic Analysis and Report to the President on the recommended remedy as well as any relevant deliberative documents by the Office of the President which bear directly on Korea’s claims regarding the WTO inconsistency of the safeguard measure under Articles XIII and XIX and Article 5.
of whether the domestic authority has considered all relevant facts, including an examination of each factor listed in Article 4.2(a), of whether the published report on the investigation contains adequate explanation of how the facts support the determination made, and consequently of whether the determination made is consistent with... the Safeguards Agreement.7
(1) The non-confidential summary of imports in the ITC Determination does not accurately reflect the actual import levels in 1998 and 1999, as demonstrated by the US 16 February letter.
(2) The information provided by the United States concerning Geneva Steel is incomplete and thereby misleading.
(3) The information provided by the United States in its 23 April letter concerning Lone Star similarly confirms a far different situation than previously described by the United States.
(1) The confidential Economic Memoranda used to evaluate the remedy proposals and the impact of various alternatives on the US industry. (See below).
(2) The papers used in the deliberative process by the President in reaching the determination regarding the safeguard measure.
(3) The confidential version of the ITC Staff Report, providing fuller explanations for the condition of the industry.
(b) The Panel Should Reach the Issues Raised by Korea With Respect to Both the US Investigation as Well as the Safeguard Measure
(1) Total "in-quota" imports were projected to be approximately 63,000 short tons (based on seven significant suppliers). (Current data shows total "in-quota" imports of 64,067 tons.)
(2) Very limited "out-of-quota" imports could be expected at the 19 per cent tariff level:
(i) The duty imposed was 6 to 10 times the level of the bound rate.
(ii) Each supplying country could supply 9,000 short tons at bound rates.
(iii) Two very significant suppliers (Canada and Mexico) were not controlled.
(iv) Imported and domestic line pipe were highly substitutable.
(v) The US industry had substantial unused capacity and US capacity exceeded consumption.
(3) Total imports, excluding Canada and Mexico, equalled 78,671 tons from March 2000- February 2001. Of that total, only 14,604 tons entered at the 19 per cent duty rate. In-quota imports totaled 64,067 tons.
(4) The only economic analysis undertaken for the purpose of meeting obligations under Article 5.1 were the Economic Memoranda.
(1) The reference used by the United States that "Geneva did not produce other products in the facilities where line pipe was made" is a reference to the Staff Report in which they are referring to production of other pipe products.
(2) The problem was that Geneva shut down one of its blast furnaces and attributed the shutdown to the line pipe market. That shutdown, however, was driven by circumstances in its principal markets: hot-rolled coil and plate.
(1) The information on lag-times contradicts the US position. In fact, most of the merchandise is sold before the merchandise enters the United States.
(2) The United States is incorrect that the ITC did not compare first half and second half 1998 data.
(3) The difference in trends between imports and the condition of the domestic industry is not minor.
(1) Statements in questionnaire responses. However, reliance on such statements cannot take the place of an analysis of the actual pricing data.
(2) Declines in average unit value ("AUV") data. Average unit import price data is not reliable because it is based on public data, which includes products other than the "like product" under investigation.
(3) The ITC’s pricing data. This data did not demonstrate that imports led down prices.
(1) Underselling was generally a condition of competition.
(2) In no case did the margin of underselling expand in the period of July 1998 through June 1999 compared to the strongest period of industry health (January 1997 through June 1998).
(3) In the case of Product 5, the data confirms that imports oversold domestic prices, while in the case of Product 6, domestic prices declined even in the absence of import competition.
(1) a review of the evidence of serious injury or threat of serious injury identified by the competent authorities;
(2) an examination of the nature of the safeguard measure, including its product coverage, form, duration, and level;
(3) an analysis of how the application of the measure addresses the serious injury or threat of serious injury identified by the competent authorities; and
(4) in light of the first three steps, an assessment of whether application of the measure, in its totality, goes beyond the extent necessary to prevent or remedy serious injury and to facilitate adjustment.
Article 13 of the DSU and Article 11.2 of the SPS Agreement suggest that panels have a significant investigative authority. However, this authority cannot be used by a panel to rule in favour of a complaining party which has not established a prima facie case of inconsistency based on specific legal claims asserted by it. A panel is entitled to seek information and advice from experts and from any other relevant source it chooses, pursuant to Article 13 of the DSU and, in an SPS case, Article 11.2 of the SPS Agreement,to help it to understand and evaluate the evidence submitted and the arguments made by the parties, but not to make the case for a complaining party.21
Thus, the onus was clearly on Korea to make its own case in support of its parallelism claim. It would appear that Korea may have chosen not to do so because "it d[id] not consider that 'parallelism' resolves the issue in this case given the interpretation by the USITC in its implementation of US– Wheat Gluten, that it can exclude NAFTA members from the serious injury determination and then exclude them from the measure."22
(1) The release of confidential record information to the Panel;
(2) The admissibility of evidence not submitted to the ITC, or addressing events after the decision to take a safeguard measure; and
(3) Information submitted in footnotes to the written version of Korea's second oral statement and not read out loud during the meeting with the parties.
· The confidential version of the complete ITC decision;
· The Addendum to the dissenting views of Commissioners Crawford's opinion on injury;
· The data concerning imports of subject merchandise, as defined by the ITC, by each country supplier;
· The confidential economic memorandum on which the ITC based its remedy recommendation;
· Any other economic memoranda or other written analysis by the US President to support the President's remedy recommendation; and
· The record of the confidential proceeding before the ITC.
We are mindful that, in order to make an objective assessment of the matter before us, we may need to view certain confidential information not in the public record of the ITC. However, we are equally aware that the protection of confidential information is an important systemic consideration recognised by Article 3.2 of the Safeguards Agreement. Given these considerations, we consider that a panel should show appropriate restraint in the exercise of its authority under Article 13.1 of the DSU to seek confidential information from a party.
In our view, Korea's request that we seek from the United States the full confidential record of the investigation is unduly broad and could encompass confidential information that is without relevance to the claims advanced by Korea in this dispute and which is not necessary in order for us to perform an objective assessment of the matter before us. Thus, we decline Korea's request in this regard. For the same reasons, we decline to seek from the United States the confidential version of the complete ITC decision.
Regarding Korea's requests that we seek (a) the confidential economic memoranda on which the ITC based its remedy recommendation and (b) any economic memoranda or other written analysis by the US President to support the President's remedy recommendation, we are not in a position at this time to assess the need for access to this information. Accordingly, we will give further consideration to this request at the first meeting of the Panel.
We do, however, grant Korea's request that we seek from the United States (a) the Addendum to the dissenting views of Commissioner Crawford's opinion on injury; and (b) data concerning imports of subject merchandise, as defined by the ITC, by each country supplier. Korea has established to our satisfaction that these more targeted requests involve information which is relevant to the claims advanced by Korea and which may prove necessary in order for us to perform an objective assessment of the matter. We request that the United States provide this information to the Panel and to Korea not later than close of business on 16 February.
Our ruling is without prejudice to any further specific requests from Korea that we seek confidential information from the United States. Any such requests should be supported by an explanation as to why the information sought is relevant to Korea's claims and is necessary in order for the Panel to perform an objective assessment of the matter. Moreover, this ruling is also without prejudice to the Panel's establishment of the facts which will be relied upon for purposes of its findings.
· The confidential staff report;
· Information regarding the relative import trends;
· Price data trends between imports and domestic prices for each quarter;
· Financial information on a per producer basis;
· The ITC’s recommendation on remedy, the supporting economic memorandum, and the confidential report sent to the President;
· All papers used in the deliberative process by the President regarding the safeguard measure imposed; and
· Other confidential information which may bear on arguments subsequently raised by the United States.
In order to assist the Panel in making an objective assessment of the matter before it, the Panel considers that it is necessary and appropriate for the United States to provide aggregate weighted average price data for all imports and domestic products covered by the ITC's Line Pipe investigation. This data must be broken down product-by-product, and quarter-by-quarter. The Panel is not requesting confidential data at this stage. Thus, the United States may use asterisks when there was only one supplying company for a given product in a given quarter. The information requested should be made available to the Panel by close of business Monday, 23 April 2001. In order to assist the Panel in determining whether it is necessary and appropriate to request additional data from the United States, the Panel asks that the United States also reply to questions 6, 7 and 8 from the Panel by close of business on Monday, 23 April 2001.
Furthermore, at the first substantive meeting of the Panel with the parties, the United States tentatively proposed that it provide the Panel with two outputs of a computerized model used by the ITC to evaluate the impact of imports on the domestic industry. One output would include imports from Japan, while the other output would exclude imports from Japan. The United States indicated that these outputs would demonstrate that there is very little difference in results, whether imports from Japan are included or not. The Panel looks forward to receiving these outputs by close of business on Monday, 23 April 2001.
The United States also tentatively proposed that it provide the Panel with an output of the aforementioned computerized model based on the measure implemented by the President (using the data before the ITC). The Panel looks forward to receiving this additional output by close of business on Monday, 23 April 2001.