WTO Dispute Settlement Proceeding Regarding United States-Antidumping Measures on Certain Hot-Rolled Steel Products From Japan

AGENCY:

Office of the United States Trade Representative.

ACTION:

Notice; request for comments.

SUMMARY:

The Office of the United States Trade Representative (“USTR”) is providing notice of the establishment of a dispute settlement panel under the Marrakesh Agreement Establishing the World Trade Organization (“WTO”), requested by the Government of Japan. The Government of Japan has asked the panel to review the determinations of the U.S. Department of Commerce (“DOC”) and the U.S. International Trade Commission (“ITC”) that led to the issuance of an antidumping duty order covering imports of certain hot-rolled steel products from Japan (64 FR 34778, June 29, 1999). Specifically, DOC published a preliminary determination of critical circumstances on November 30, 1998 (63 FR 65750), and preliminary and final determinations of sales at less than fair value on February 19, 1999 (64 FR 8291) and May 6, 1999 (64 FR 24329), respectively. The ITC published preliminary and final determinations of injury on November 25, 1998 (63 FR 65221) and June 23, 1999 (64 FR 33514), respectively.

DATES:

Although USTR will accept any comments received during the course of the dispute settlement proceedings, comments should be submitted by July 3, 2000, to be assured of timely consideration by USTR in preparing its first written submission to the panel.

ADDRESSES:

Comments may be submitted to Sandy McKinzy, Litigation Assistant, Office of Monitoring and Enforcement, Room 122, Attn: Hot-Rolled Steel Products from Japan, Office of the United States Trade Representative, 600 17th Street, NW., Washington, DC 20508.

FOR FURTHER INFORMATION CONTACT:

L. Daniel Mullaney, Assistant General Counsel, at (202) 395-3581.

SUPPLEMENTARY INFORMATION:

Pursuant to section 127(b) of the Uruguay Round Agreements Act (URAA) (19 U.S.C. 3537(b)(1)), USTR is providing notice that the Government of Japan submitted a request for the establishment of a WTO dispute settlement panel to examine the imposition of antidumping duties on certain hot-rolled steel products from Japan. At its meeting on March 20, 2000, the WTO Dispute Settlement Body (“DSB”) established the panel, and the panel was composed on May 19, 2000. Pursuant to Article 8.7 of the WTO Dispute Settlement Understanding, the WTO Director-General appointed the following persons to serve as panelists in this dispute: Mr. Harsha V. Singh, Chairman; Mr. Yanyong Phuangrach, Member; and Ms. Lidia di Vico, Member. Under normal circumstances, the panel, which will hold its meetings in Geneva, Switzerland, is expected to issue a report detailing its findings and recommendations within six to nine months after it is established.

Major Issues Raised and Legal Basis of the Complaint

In its request for the establishment of a panel, the Government of Japan challenges the issuance of an antidumping duty order concerning certain hot-rolled carbon steel products from Japan (64 FR 34778 (June 29, 1999)), and the underlying determinations of DOC and the ITC. The Government of Japan alleges that these determinations, as well as the applicable law, regulations, policies and procedures, were not in accordance with several provisions of the Marrakesh Agreement, the General Agreement on Tariffs and Trade 1994 (“GATT 1994”) and the Agreement on Implementation of Article VI of GATT 1994 (“Antidumping Agreement”).

Specific allegations with respect to DOC's dumping margin calculations and critical circumstances findings include:

1. DOC's exclusion of certain home market sales to affiliated companies from the calculation of normal value, based on their price levels, was inconsistent with Articles 2.2.1 and 2.4 of the Antidumping Agreement;

2. DOC's application of facts available to Kawasaki Steel Corporation was inconsistent with the standards of Articles 2.3 and 6.8 and Annex II of the Antidumping Agreement; and the application of facts available to Nippon Steel Corporation and NKK Corporation was inconsistent with the standards of Article 2.4 and 6, in particular 6.1, 6.2, 6.6, 6.7, 6.8, 6.13, and Annexes I and II of the Antidumping Agreement;

3. DOC's calculation of the “all others” rate of dumping applicable to companies not investigated, which was based on the average of the rates of the investigated companies, was inconsistent with Article 9.4 of the Antidumping Agreement; and the law on which this calculation was based—section 735(c)(5)(A) of the Tariff Act of 1930, as amended—is itself inconsistent with this article;

4. DOC's calculation of dumping margins, due to the above alleged inconsistencies, is excessive and thus inconsistent with Article 9.3 of the Antidumping Agreement;

5. DOC's findings of critical circumstances, potentially subjecting to antidumping duties imports made up to 90 days prior to the preliminary determination of dumping, were inconsistent with Articles 10.1, 10.2, 10.4, 10.6, and 10.7 of the Antidumping Agreement; and the law under which DOC made these findings—sections 733(e) and 735(a)(3) of the Tariff Act of 1930, as amended, is itself inconsistent with these articles.

Specific allegations with respect to the injury determination by ITC include:

6. ITC's examination of the causal relationship between dumped imports and injury to the domestic industry, which the Government of Japan claims was not objective and not based on an examination of all of the evidence, was inconsistent with Articles 3.1, 3.4, and 3.5 of the Antidumping Agreement;

7. ITC's application of the “captive production” provision of U.S. law, which, under certain circumstances, causes the ITC to focus primarily on the merchant market for the subject merchandise, was inconsistent with Articles 3.1, 3.2, 3.4, 3.5, 3.6, and 4.1 of the Antidumping Agreement, because the ITC, due to its application of this provision, did not properly evaluate all relevant economic factors and indices bearing on the state of the U.S. industry, assess injury and causation in relation to the domestic production of the like product, or undertake an objective examination of all relevant evidence; further, the Government of Japan alleges that the captive production provision itself, section 771(7)(c)(iv) of the Tariff Act of 1930, as amended, is inconsistent with these articles of the Antidumping Agreement.

Other allegations include:

8. The United States' allegedly biased approach to the investigation, including with respect to the critical circumstances determination, the application of “facts available,” and the determination of injury, was inconsistent with Article X:3 of GATT 1994;

9. The above laws, regulations, and rulings are not in conformity with obligations under the WTO agreements, and so are inconsistent with Article XVI:4 of the Marrakesh Agreement and Article 18.4 of the Antidumping Agreement.

Public Comment: Requirements for Submissions

Interested persons are invited to submit written comments concerning the issues raised in this dispute. Comments must be in English and provided in fifteen copies to Sandy McKinzy at the address provided above. A person requesting that information contained in a comment submitted by that person be treated as confidential business information must certify that such information is business confidential and would not customarily be released to the public by the submitting person. Confidential business information must be clearly marked “BUSINESS CONFIDENTIAL” in a contrasting color ink at the top of each page of each copy.

Information or advice contained in a comment submitted, other than business confidential information, may be determined by USTR to be confidential in accordance with section 135(g)(2) of the Trade Act of 1974 (19 U.S.C. 2155(g)(2)). If the submitting person believes that information or advice may qualify as such, the submitting person—

(1) Must so designate the information or advice;

(2) Must clearly mark the material as “SUBMITTED IN CONFIDENCE” in a contrasting color ink at the top of each page of each copy; and

(3) Is encouraged to provide a non-confidential summary of the information or advice. Pursuant to section 127(e) of the URAA (19 U.S.C. 3537(e)), USTR will maintain a file on this dispute settlement proceeding, accessible to the public, in the USTR Reading Room: Room 101, Office of the United States Trade Representative, 600 17th Street, NW., Washington, DC 20508. The public file will include a listing of any comments received by USTR from the public with respect to the proceeding, the U.S. submissions to the panel in the proceeding, the submissions, or non-confidential summaries of submissions, to the panel received from other parties in the dispute, as well as the report of the dispute settlement panel, and, if applicable, the report of the Appellate Body. An appointment to review the public file (Docket WTO/DS-184, “Hot-Rolled Steel Products—Japan”) may be made by calling Brenda Webb, (202) 395-6186. The Reading Room is open to the public from 9:30 a.m. to 12 noon and 1 p.m. to 4 p.m., Monday through Friday.