The WTO, the World Trade Organisation has just issued a compressed summary of the latest findings of the WTO appelate body regarding U.S./China countervailing measures:
1. MEASURE AND PRODUCT AT ISSUE
• Measure at issue: Countervailing measures imposed by the United States.
• Products at issue: Thermal paper, pressure pipe, line pipe, citric acid, lawn groomers, kitchen shelving, oil country tubular goods, wire strand, magnesia bricks, seamless pipe, print graphics, drill pipe, aluminium extrusions, steel cylinders, solar panels, wind towers, and steel sinks from China.
2. SUMMARY OF KEY PANEL/AB FINDINGS
• ASCM Art. 1.1(a)(1) (definition of “public body”): The Panel found that the United States Department of Commerce (“USDOC”) acted inconsistently with Art. 1.1(a)(1), because it determined that certain Chinese state-owned enterprises were “public bodies” based solely on the grounds that they were majority owned, or otherwise controlled, by the Government of China. The Panel also found USDOC’s “rebuttable presumption” to determine whether a state-owned enterprise is a “public body” to be inconsistent as such with Art. 1.1(a)(1).
• ASCM Arts. 1.1(b) and 14(d) (benefit benchmark): The Panel found that the USDOC did not act inconsistently with Arts. 14(d) or 1.1(b) by rejecting in-country private prices in China as benchmarks in its benefit analysis. Noting that the selection of a benchmark under Art. 14(d) could not, at the outset, exclude consideration of in-country prices from any particular source, including government-related prices, the Appellate Body reversed the Panel’s finding, and found that the USDOC acted inconsistently with Arts. 14(d) and 1.1(b) by rejecting prices in China as benchmarks in its benefit analyses.
• ASCM Art. 2.1 (specificity): The Panel found that the USDOC did not act inconsistently with Art. 2.1 by analysing specificity exclusively under Art. 2.1(c). The Appellate Body upheld the Panel’s finding, noting that the application of the principles laid down in paras (a) and (b) of Art. 2.1 did not necessarily constitute a condition that must be met in order to consider the factors listed under para (c) of Art. 2.1. The Panel also found that the fact that the USDOC identified subsidy programmes that are not set out in a written document did not, in and of itself, render the USDOC’s specificity determinations inconsistent with Art. 2.1(c), because the evidence of “systematic activity” or “series of activities” provided an objective basis for the USDOC to sufficiently identify subsidy programmes for the purposes of the first of the “other factors” under Art. 2.1(c). The Appellate Body found, however, that the Panel erred in its application of Art. 2.1(c) because it failed to provide any case-specific discussion or references to the particular USDOC determinations of specificity challenged by China. The Appellate Body therefore reversed the Panel’s finding but was unable to complete the analysis. The Panel also found that the USDOC did not act inconsistently with Art. 2.1 by failing to identify a “granting authority” and ergo the relevant jurisdiction. Noting that the Panel had conducted an extremely cursory analysis, the Appellate Body reversed the Panel’s finding but did not complete the analysis regarding whether the USDOC had sufficiently identified the jurisdiction of the granting authority.
• ASCM Art. 12.7 (use of “facts available”): The Panel found that USDOC did not act inconsistently with Art. 12.7 by not relying on facts available on the record. The Appellate Body reversed the Panel’s finding, observing that the Panel had acted inconsistently with DSU Art. 11 because it, inter alia, had not undertaken a critical and in-depth examination of the USDOC’s statements. The Appellate Body was unable to complete the legal analysis
• ASCM Art. 11.3 (export restraints): The Panel found that the USDOC acted inconsistently with Art. 11.3 by initiating two investigations based on applications predicated solely on the existence of export restraints and their price-suppression effect.