WORLD TRADE WT/DS63/1
G/ADP/D4/1
ORGANIZATION 9December 1996
(96-5139)
Original: English
UNITED STATES -ANTI-DUMPING MEASURES ONIMPORTS OFSOLID UREA
FROM THE FORMER GERMAN DEMOCRATIC REPUBLIC
Request forConsultations bytheEuropean Community
Thefollowing communication received on28November 1996, fromthePermanent Delegation
oftheEuropean Commission tothePermanent Mission oftheUnited States, iscirculated inaccordance
withArticle 4.4oftheDSU.
_______________
Inaccordance withArticle 17.3oftheAgreement onImplementation ofArticle VIofthe
GATT 1994andwithArticle 4oftheUnderstanding onRules andProcedures Governing theSettlement
ofDisputes, theEuropean Community requests consultations withtheUnited States ofAmerica
concerning thefollowing matter:
Anti-dumping duties imposed onexports ofsolid urea from the former
German Democratic Republic; termination ofchanged circumstance review andcontinuation asanti-
dumping dutyadministrative review.
1. On1May1995, theUSDepartment ofCommerce (DoC) published theprovisional results
ofachanged circumstance review, initiated inFebruary 1992 andcarried outtoassess theimpact of
thereunification ofGermany ontheanti-dumping dutyorder covering solidureafromtheformer GDR
which hadbeenimposed in1987. Although theDoCdecided nottoconfirm theextension oftheduties
toshipments from thewhole reunified Germany itmaintained theorder onthefive"Länder" which
formerly constituted theterritory oftheGDR (the"five States"). TheDoC simultaneously opened
achanged circumstances administrative review onshipments fromthesefiveStates solely forthepurpose
ofassessing anewcashdeposit rateusing amarket economy analysis forthedetermination ofnormal
value. Thisreview wasterminated inMarch 1996because therewerenoshipments ofsolidureafrom
theterritory oftheformer GDR.
2. On30May1996,theDoCinitiatedanotherchangedcircumstancesreviewinordertoinvestigate
shipments made after1May1995 andbefore 31May1996. During thisperiod oneshipment from
thesoleproducer ofsolidureainthe"fiveStates" tookplace. Subsequently questionnaires wereissued
andtheexporter, SKW, fullycooperated intheproceedings.
However,on20September1996,theDoCterminatedthischangedcircumstancesreviewwithout
afinaldecision. Atthesame timetheDoCproceeded withanadministrative review which hadbeen
initiated onrequest ofpetitioners on15August 1996. DoCjustifies these decisions onthebasis that
bothreviews substantially overlap andthatinbothreviews essentially thesame analysis would have
./.WT/DS63/1
G/ADP/D4/1
Page2
tobeconducted. Itisimportant tonote, however, thatunder USlawtheDoCdoesnotappear tohave
theauthority torevoke ananti-dumping order onthebasis ofoneadministrative review only: three
successive suchreviews, confirming theabsence ofdumping, appear tobenecessary instead forsuch
arevocation totakeplace.
3. TheEuropean Community isveryconcerned about thiscourse ofaction. Theabove-mentioned
decisions prove thattheUnited States isnotprepared totakeintoaccount theradical changes which
came about withthereunification ofGermany.
Bymaintaining theorder against thefiveStates oftheformer GDR theDoChasignored de
jureanddefactothefullintegration ofthenewStates intothereunified Federal Republic ofGermany,
andthustheeconomic integration ofthecompanies inthenewStates intotheGerman market economy.
Thedecision nottotakeintoaccount thecomplete conversion ofaterritory fromanon-market
economy intoamarket economy andthefullprivatization oftheexporting enterprises isaviolation
oftheUnited States 'obligation under Article 11oftheAgreement. Theadministrative review can
onlyresult intherecalculation ofthedeposit rateandnot,aswould bewarranted, thekindofreview
which should leadtoacomplete revocation oftheorder, ifnodumping isfound. Itfollows thatthe
DoCisdenying theexporter concerned therighttodemonstrate that,because ofachange initseconomic
structure andenvironment, itsexport sales arenot(ornolonger) made atdumping prices andthat
thisdemonstration should therefore leadtoarevocation oftheanti-dumping order.
Instead theDoCisonlyprepared tocalculate anewdumping rate,which, evenifitwerezero,
would notleadtoarevocation oftheanti-dumping order, which would bemaintained asifthe
circumstances hadnotchanged significantly. Thisinspiteofthefactthatthefootnote toArticle 11.2
indicates inaclear manner thatthemere recalculation ofamargin within anadministrative review
doesnotbyitself constitute areview within themeaning ofArticle 11.
4. Inanyevent, thedivision oftheterritory ofasignatory oftheAgreement isincontradiction
withitsArticle 9.2which provides that,when anti-dumping measures areimposed, theinvestigating
authorities must name thesupplier concerned and/or thecountry concerned. Itmust beconcluded
from thisrequirement, thatduties areapplicable toimports from countries andnotregions orother
parts ofacountry.
5. Moreover, itappears thatUScustoms, sincetheprovisional decision of1May1995continues
tosuspend liquidation onentries oftheproduct concerned fromallexporters situated intheterritory
oftheformer Federal Republic ofGermany. Thesuspension ofliquidation hastoberegarded asa
provisional measure andtheCommunity would liketorequest explanation fromtheUnited States on
whatlegalbasis suchmeasures areimposed.
6. Since theunification ofGermany andtheprivatization oftheexporter concerned, more than
fiveyears havelapsed during which theUnited States hasconsistently denied therighttohavechanged
circumstances taken intoaccount inaproper changed circumstances review. This iswhythe
European Community isrequesting consultations onthismatter.
TheEuropean Community reserves itsrights toraisetoraiseanyother issue concerning this
caseduring thecoming consultations.
TheCommunity considers thistobeamatter ofurgency andwould, therefore, request
consultations totakeplace attheearliest opportunity.