. /.  WORLD TRADE  
ORGANIZATION  WT/DS217/25 
16 January 2004 
 (04-0177) 
 Original:   English 
 
 
 
 
UNITED STATES – CONTINUED DUMPING AND  
SUBSIDY OFFSET ACT OF 2000 
 
Recourse by Korea to Article 22.2 of the DSU  
 
 
   The following communication, dated 15 January 2004, from the delegation of Korea to the 
Chairman of the Dispute Settlement Body, is circulated pursuant to Article 22.2 of the DSU.   
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 The Republic of Korea requests that a special me eting of the Dispute Settlement Body be held 
on 26 January 2004 in order to consider the following agenda item:  
United States – Continued Dumping and Subsidy Offset Act of 2000 : Recourse by the 
Republic of Korea to Article 22.2 of the Understanding on Rules and Procedures Governing the Settlement of Disputes  
 Both the Panel and the Appellate Body f ound that the Continued Dumping and Subsidy 
Offset Act of 2000 (CDSOA) violates the United St ates' obligations under the General Agreement on 
Tariffs and Trade 1994 (GATT 1994), the Agreement on Implementation of Article VI of the General 
Agreement on Tariffs and Trade 1994 (AD Agre ement), the Agreement on Subsidies and 
Countervailing Measures (SCM Agreement) and th e Marrakesh Agreement establishing the World 
Trade Organisation (WTO Agreement).  Specifically , the Panel and the Appellate Body concluded 
that: 
 
- the CDSOA is a non permissible specific action against dumping or a subsidy contrary to Article 18.1 of the AD Agreement, Article 32.1 of the SCM Agreement and Articles VI:2 and 
VI:3 of GATT 1994;  - consequently, that the United States has faile d to comply with Article 18.4 of the AD 
Agreement, 32.5 of the SCM Agreement a nd Article XVI:4 of the WTO Agreement. 
 - to the extent that the CDSOA is incons istent with provisions of the AD and SCM 
Agreements, the CDSOA nullifies or impairs benefits accruing to Complaining Parties under those Agreements.  
 
  On 27 January 2003, the Dispute Settlement B ody (DSB) adopted the Appellate Body report 
and the Panel report as modified by the Appellate  Body report. The resulting DSB recommendations 
and rulings include the recommendation that the United States bring the aspects of the CDSOA found 
to be inconsistent with the GA TT, AD and SCM Agreement into c onformity with its obligations WT/DS217/25 
Page 2  
 
under the covered agreements.  The United Stat es stated that it intended to implement the 
recommendations and rulings of the DSB.    An arbitration under Article 21.3(c) of the Understanding on Rules and Procedures Governing 
the Settlement of Disputes (DSU) subsequently dete rmined that the "reasonable period of time" for 
the United States to implement the DSB reco mmendations and rulings would expire on 
27 December 2003. 
 
 The United States has failed to implement the recommendations and rulings of the DSB with 
respect to the CDSOA by that date, and no mutually acceptable arrangement has yet been made.  In the interest of preserving the balance of concessions and the integrity of the rules of the multilateral 
trading system, the Republic of Korea hereby re quests authorization from the DSB to suspend the 
application to the United States of concessions or other obligations under the covered agreements, in 
accordance with Article 22.2 of the DSU.   The Republic of Korea requests that the DSB gr ant such authorisation to suspend concessions 
or other obligations for an amount that will be determined, every year, by the amount of offset 
payments made to affected domestic producers in the latest annual distribution under the CDSOA.  
  Pursuant to that authorization, the Republic  of Korea intends to impose an additional import 
duty above bound custom duties on a final list of pr oducts originating in the United States.  In 
accordance with Article 22.4 of the DSU, every year, the rate of this  additional import duty will be set 
so as to collect, over one year, additional import duties equivalent to:  (a) the offset payments made in 
the latest annual distribution under the CDSOA fro m duties collected on products from the Republic 
of Korea; plus, (b) a proportionate amount of the ba lance of total offset payments less the offset 
payments attributed to duties collected on products from other members that are authorized by the 
DSB to suspend concessions or other obligations in this  dispute. Every year, prior to the adjustment of 
the additional import duty, the Republic of Korea w ill notify to the DSB a detailed list indicating the 
level of the additional duty on the selected products in the light of the changes in the level of the 
disbursements made under the CDSOA. 
  
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