WT/DS202/R
Page C-1
ANNEX C
Parties' Comments on Other Parties' Questions
Contents Page
Annex C-1 Korea's comments on questions from the Panel to the United States C-2
Annex C-2 Korea's comments on United States' Response to Questions from
the Panel at the second meeting with the partiesC-16WT/DS202/R
Page C-2
ANNEX C-1
KOREA’S COMMENTS ON QUESTIONS FROM
THE PANEL TO THE UNITED STATES
(7 May 2001)
(i) The measure
1. Are there circumstances in which the na ture of a safeguard measure may change,
depending on whether the competent authority ma kes a finding of present serious injury, or a
finding of threat of serious injury?  If the co mpetent authority finds that increased imports have
caused “serious injury or a threat thereof,” ho w does that authority ensure that the resultant
safeguard measure is “necessary to prevent or remedy serious injury” within the meaning of
Article 5.1 of the Safeguards Agreement?  Is it necessary to choose between a finding of present
serious injury and a finding of threat of seriou s injury in order to co mply with the necessity
requirement contained in the first sent ence of Article 5.1?  Please explain.
Answer
See Korea’s answer to Panel’s Question 8 to the Republic of Korea.
2. At para. 184 of its first written submission, th e United States asserts that “the only limit
on the volume of imports free from the 19 per cent supplemental duty is the number of WTO
Members who choose to take advantage of the 9,000 ton exemption.”  Would this mean that
there is a limit on the volume of imports subject to the lower tariff, and that the limit will be
reached if all WTO Members choose to take advantage of the 9,000-short-ton exemption?
Answer
Obviously, there is a natural limit to the imports which will be subject to the lower rate of
duty because only a limited number of countries make and supply line pipe to the US market.  The
ITC identified only seven significant suppliers other than Canada and Mexico.1  Based on this
assumption, the expected limitation on the quota amount would be approximately 63,000 tons at the
normal rate of duty.  As shown in Exhibit 49, total in-quota imports of line pipe during the first full
quota year equalled 64,067 tons, while total imports from all subject suppliers (except Mexico andCanada) totaled 78,671 tons.
2  Therefore, there is a maximum level of imports that would be likely to
enter at the normal rate of duty.  This information was available to the ITC and the President.
                                                     
1 See e.g.,  ITC Determination , Staff Report , Table 3 at II-15 (KOR-6); see also ITC Determination,
Bragg and Askey Views on Remedy, I-89, n.11 (KOR-6) (noting that there are eight countries that constitute the
principal sources of line pipe imports into the Un ited States, as well as Venezuela).  Moreover, the US
President’s announcement contained a list of all of the countries in the world capable of producing line pipe.Most had never supplied line pipe to the United States and have not under the US President’s measure.
2 See Exhibit 49 (Chart 1:  US Imports of Line Pipe (1999-2000); Chart 2:  US Imports of Line Pipe
(March 2000-February 2001) (updated from previously submitted KOR-29) (KOR-49).WT/DS202/R
Page C-3
3. GATT Article XIII.2(a) provides that quotas representing the total amount of permitted
imports shall be fixed “wherever practicable.”  GATT Article XIII.5 states that Article XIII.2(a)
shall apply to tariff quotas.  Would this suggest that there may be situations in which it may not
be “practicable,” in the context of a tariff quota, to fix a quota representing the total amount of
permitted imports?  If not, why not?  If ye s, would this also suggest that a measure may
constitute a tariff quota even if there is no “overall limit on eligibility” (para. 185, US first
written submission)?
Answer
The decision as to whether a measure is a tariff-rate quota (TRQ) cannot depend on whether it
has been properly constructed and implemented by a Member. Otherwise a Member could evade eachrequirement of Article XIII of the GATT 1994 by failing to comply with all the requirements of
Article XIII.  That, in fact, appears to be the US defence to date – the United States asserts that the
measure cannot be a TRQ because the United States has not met the requirement of a quota by
establishing a total quota amount.  The fact that the United States has violated its obligation cannot
constitute proof that the obligation does not exist.
As the question suggests, Korea agrees with the Panel that not all TRQs require an overall
limit, because, as the Panel properly notes, Articl e XIII:2(a) of the GATT 1994 provides “wherever
practicable.”  For example, import licenses are contemplated as an alternative to a total quota.
3
4. In Section F.2.b of its first written submissi on, the United States ar gues that the rules in
Article 5 of the Safeguards Agreement for quantitative restrictions and quotas do not apply
because the Line Pipe measure is not a quantitativ e restriction.  Does the United States consider
that the terms “quantitative restriction” and “quota” (in Article 5 of the Safeguards Agreement)
are synonymous?  Please explain.  In particular, and considering the US argument that ameasure is only a TRQ if it includes an overall limit on eligibility, why should the term “quota”
(Article 5.2) not refer to the quota element of a TRQ?
Answer
See Korea’s answer to Panel’s Question 9 to the Republic of Korea.
5. In Korea – Dairy, the Appellate Body stated that it does “not see anything in Article 5.1
that establishes such an obliga tion [to justify the necessity of a safeguard measure] for a
safeguard measure other than a quantitative restriction which reduces the quantity of imports
below the average of imports in the last three representative years.”  Could the Appellate Body
have inferred that there is no obligation on a Member to explain that its safeguard measure is
“necessary” (within the meaning of Article 5.1) unless that safeguard measure is a quantitative
restriction which reduces the level of import s below the average level of the last three
representative years?  Please explain.
Answer
See Korea’s answer to Panel’s Question 10 to the Republic of Korea.
6. In their oral presentation the United States asserted that the Presid ent’s decision on the
safeguard measure relied on the same data and information as the ITC recommendation.  Canthe United States also confirm that there were no other documents prepared after the ITC’s
                                                     
3 Article XIII.2(b) of the GATT 1994.WT/DS202/R
Page C-4
recommendation that formed the basis for the Pres ident’s decision on the measure even if those
documents relied on the same data and information before the ITC?
Answer
See US letter, dated 23 April 2001, conceding that such documents exist, but refusing to
provide them to the Panel.4  It appears that the US explanation is that such documents are
confidential5 and their rationale for not giving them to the Panel is that those documents are not
released to other reviewing bodies.  However, Korea notes that the United States also refuses to give
data that is released to other reviewing bodies.6  Moreover, it is now unclear in light of the US
response to this question, how much the measure taken by the President relies on the ITC memoranda.It appears that the United States is now saying that the measure can and must be evaluated exclusivelyon the basis of the Presidential Proclamation and published memorandum, which “form the entirety of
the explanation of the decision to impose ... the measure.” 
7  Neither the proclamation nor the measure
provide any explanation or rationale for the measure.  The United States appears to take the position
that the measure is unreviewable by the Panel.
(ii) Serious injury
7. At para. 267 of its first written submis sion, the United States submits that “any
problems experienced by Geneva resulted in part fr om the difficulties it experienced in line pipe
sales ... .”  What “part,” or proportion, of Geneva Steel’s “difficulties” could be directlyattributed to its line pipe operations?  Please explain, and provide supporting documentation.
Answer
In its letter dated 23 April 2001, the United States answers as follows:
It was not necessary for the USITC or Geneva Steel to apportion the difficulties reflected in
its data because the USITC collected financial information from Geneva Steel (and 14 other US line
producers) specifically regarding their line pipe operations.  As noted in the USITC Report, Geneva
Steel did not produce other products in the facilities where line pipe was made.
It is further clear from the record before the USITC that declines in line pipe operations had a
significant overall effect on Geneva Steel’s operations.  At the hearing in the injury phase of the
USITC investigation an executive from Geneva Steel confirmed that line pipe “is an essential part of
our business from an overall margin perspective,” and that Geneva lost half of its volume of line pipe
sales between 1997 and 1998.8
The US statement is not responsive to the question posed by the Panel for the very reasons
observed by Commissioner Crawford.9  Specifically:
(a) The United States asserts that “Geneva did not produce other products in the facilities
where line pipe was made.”  But, this is a reference to a passage of the ITC Staff
                                                     
4 Letter Fr: United States Re: Panel’s Request for Information (23 April 2001) at 3 (“US 23 April
Letter”).
5 The Panel should ask the United States whether it is relying on Article 3.2 of the SA as its rationale
for not providing the documents.  If not, the United States needs to cite to some other authority.
6 See Korea First Written Submission at paras. 87-92.
7 US 23 April Letter, Response to Question 6 at (i).
8 Id., Response to Question 7 at (ii)(citation omitted)(emphasis in original).
9 See generally ITC Determination, Crawford Dissenting Views on Injury at I-63 (KOR-6).WT/DS202/R
Page C-5
Report referring to other pipe products.  The contrast is to other line pipe producers
which also produced OCTG, standard and structural pipe.10  Geneva did produce
other finished steel products--plate and hot-rolled coil.
(b) As Commissioner Crawford correctly observed, the problem was that Geneva closed
one of its blast furnaces and attributed the shutdown to the line pipe market.11
(c) Missing from the US response to the Panel, but not missed by Commissioner
Crawford, is that the finished steel products produced from the blast furnaces of
Geneva are hot-rolled steel and carbon plate--not line pipe.12  Hot-rolled steel and
carbon plate are finished steel products themselves and are “other product[s]” being
produced in the facilities where welded line pipe is manufactured.13  Only  som e of
that hot-rolled and plate production is used for the production of line pipe.
(d) Thus, one cannot conclude that the shutdown of the blast furnace and its impact on
the financial condition of Geneva was properly attributed to line pipe because Geneva
produced no other “pipe” product on its line pipe-making line.  Moreover, that’s notthe point.  The point is that the shutdown of its blast furnace should have been
attributed to conditions in Geneva’s primary markets of hot-rolled and plate.
14
Indeed, Geneva has been an active participant in unfair trade cases against importedplate and hot-rolled coil.  Commissioner Crawford’s conclusion was not only logical,
but also correct.  It also demonstrates why Commissioner Crawford observed that itwas incorrect to attribute the shutdown of the blast furnace to imports of line pipe.
In addition, Korea notes that the only public record reference relied on by the United States to
establish the source of Geneva Steel’s problems is the ITC testimony of Mr. Johnsen, Executive Vice
President and General Counsel of Geneva Steel.
15  Mr. Johnsen only stated that line pipe was “an
essential part of our business,” but this does not answer the question as to whether the bankruptcy can
be attributed to the production of line pipe.16  Given such self-serving testimony, this issue required a
more thorough analysis.  There is certainly no deni al there that Geneva’s primary business is hot-
rolled sheet and cut-to-length plate17 or that a “blast furnace” is not used to produce pipe.
This uncritical acceptance of assertions by the domestic industry witnesses contrasts sharply
with the ITC’s treatment of the dual-stencilled line pi pe issue.  In the latter case, the ITC states that
Respondent’s evidence could not be considered because Respondents failed to precisely quantify the
amount of dual-stencilled line pipe sold as standard pipe.
                                                     
10 See ITC Determination, Staff Report at II-25 (KOR-6).
11 See ITC Determination, Crawford Dissenting Views on Injury at I-63 (KOR-6); ITC Determination,
Staff Report at II-9, n.65 (KOR-6); see also  US First Written Submission at para. 103.
12 See ITC Determination, Crawford Dissenting Views on Injury at I-63 (KOR-6).
13 See ITC Determination, Staff Report at II-25 (KOR-6).
14 See ITC Determination, Crawford Dissenting Views on Injury at I-63 (KOR-6).
15 See US First Written Submission at para. 103.  We note that in making a reference regarding Geneva
Steel, in Footnote 106 of their submission (found in para. 103), the United States cites to pages 32-33 of theTranscript of the Hearing on Injury.  There is no referen ce to Geneva Steel on either of those pages.  The correct
cite is to pages 51-52.  See Injury Transcript at pp. 32-33 (KOR-50) and pp. 51-52 (KOR-7) (Testimony of
Mr. Johnsen, Executive Vice President and General Counsel, Geneva Steel).
16 According to the United States, the decline in the line pipe business “played a major role in the
decision to shutdown one of its blast furnaces and in the company’s bankruptcy.”  US First Written Submissionat para. 103.
17 See Injury Transcript at pp. 51-52 (KOR-7); see also ITC Determination, Crawford Dissenting Views
on Injury at I-63 (KOR-6).WT/DS202/R
Page C-6
Finally, it is also not clear how the costs of the temporary shutdown and the bankruptcy have
been allocated to line pipe.  Korea’s position is that none of those costs should have been attributed to
line pipe.  Since “some” costs were attributed, the ITC should have examined closely how such costs
were allocated, given that Geneva’s primary business was not line pipe.  The US answer-- i.e., that we
collected data “specifically regarding their line pipe operations”--begs the question:  how were thesegeneral costs allocated to line pipe?
8. Commissioner Crawford found that the Lone Star’s allocation of extraordinary charges
had a “marked impact on SG&A for the company and for the industry as a whole, reducing the
level of operating income to $10.8 million in 1998.”  Did the remaining Commissioners address
this specific finding by Commissioner Crawfo rd?  If so, how?  What would the level of
operating income have been absent the a llocation of this extraordinary charge?
Answer
With respect specifically to Lone Star and the impact of those allocations on the financial
condition of the industry, we note that in its letter of 23 April, the United States indirectly concedesthat the other Commissioners failed to address the issues observed by Commissioner Crawford.
18  The
significance of this allocation is discussed at length in Korea’s Written Rebuttal.
9. At footnote 75 of the ITC’s determination (page I-16), reference is made to data at
page II-31 of the staff report.  What is the equi valent reference in the non-confidential version
of the staff report?  In note 75, reference is also  made to the “two of the largest firms.”  Does
this reference include Geneva Steel and/or Lone Star Steel?
Answer
“Two of the largest firms” refers to Lone Star  and California Steel (CSI), which were the two
US producers verified by the ITC.19
The ITC report is riddled with issues regarding the allocation of costs.  For dual- and triple-
stencilled line pipe, there are also issues regarding the allocation of revenues.20  As has been seen in
the case of Lone Star, these allocations can have a significant impact.  The ITC’s analysis of these
issues was far too cursory.  (We expect that the da ta at II-31 of the ITC Staff Report is confidential.)
Moreover, while the ITC majority stated that there was insufficient evidence of more than a
“relatively small” shift from OCTG to line pipe,21 it was the duty of the ITC to fully investigate this
issue in accordance with its obligations under Articles 3.1 and 4.2(b) of the SA.22  Furthermore, the
ITC conclusions on this point about whether producers can shift between products are contradictory,because, in the remedy recommendation, the ITC majority notes that producers can further increase
their line pipe production by shifting production away from other products like OCTG.
23
                                                     
18 US 23 April Letter, Response to  Question 8 at (ii) and (iii).
19 See ITC Determination, Staff Report at II-25 (KOR-6).
20 US 23 April Letter, Response to Question 7 at ( ii) n.2 (citing Staff Report at II-25) (“Any allocations
that had to be made by the US line pipe producers in order to report financial data specific to their line pipeoperations were based on their sales of end products or on other acceptable allocation methodologies.”  See
USITC Report at p. I-31 (explaining that “increases in per-unit overhead and SG&A were allocated ... in
proportion to their sales of end products or based on other acceptable allocation methodologies.”)) (KOR-6).
21 See ITC Determination, Majority Views on Injury at I-30-31 (KOR-6).
22 United States – Definitive Safeguard Measures on Imports of Wheat Gluten from the European
Communities, Report of the Appellate Body, WT/DS166/AB/R (22 December 2000) (“ US – Wheat Gluten
(AB) ”) at paras. 54-55.
23 See ITC Determination, Majority Views on Remedy at I-78 (KOR-6).WT/DS202/R
Page C-7
10. Under the US system for imposing safe guard measures, what are the “competent
authorities” within the meaning of Article 3.1 of  the Safeguards Agreement?  Do they include
the President of the United States?  If not, why not?  In the present case, please specify precisely
where the “reasoned conclusions” – within the meaning of Article 3.1 – are to be found.  Do they
include the conclusions of the Pr esident of the United States?
Answer
US law is very clear that the “competent authorities” for purposes of US safeguard
investigations include the ITC and the President.24  Each has specific statutory functions for
determining serious injury and recommending and imposing remedies.  Korea sees no basis toconclude that, within the meaning of Article 3.1 of the SA, findings and conclusions by the
“competent authorities” on “all pertinent issues of fact and law” in an “investigation” would not
include the findings and conclusions of the President.
11. With regard to note 21 to the US first writ ten submission, what is the relevance of the
US statement that “capacity and capital expe nditures are not among the factors listed in
Article 4.2(a) of the Safeguards Agreement ... .”  Does the United States consider that the Panel
is precluded from making any findings regarding the ITC’s treatment of capacity and capital
expenditure, simply because they are not mentioned in Article 4.2(a)?
Answer
Korea believes that the answer to this question is that all relevant factors of an objective and
quantifiable nature have to be examined by the authorities in accordance with Article 4.2(a) of the SA.
In this case, Korea actually raised some significant issues on those factors.  Moreover, Korea believesthat an annualized capacity increase of 25 per cent between 1998 and 1999
25 is objective, quantifiable,
and relevant since the dramatic capacity expansion coincided with the drop in domestic demand and
falling prices.
12. Leaving aside the factual circumstances of  the present case, does the United States
consider, as a matter of principle, that improvements in domestic industry performance at the
end of the relevant period of investigation would be inconsistent with a finding of presentserious injury?
Answer
Yes, it would be inconsistent with a finding of present serious injury because the industry
must be suffering serious injury at the “end of the period.”  Although Korea does not believe that in
all cases an improvement in the domestic industry performance would prevent a finding of present
serious injury, the competent authorities would have to explain how such a finding of serious injury
could still be made under such conditions.  If the improvement were significant enough, as in this
case, so that the industry was no longer facing an emergency situation and was objectively expected tocontinue its recovery given the overall conditions of competition, then a finding of serious injury
caused by increased imports would be precluded.
13. At para. 134 of its first written submission, the United States asserts that “Korean
respondents failed to place on the record objectiv e and quantifiable information as to the extent
                                                     
24 See 19 USC. § 2252 (KOR-1).
25 See ITC Determination, Staff Report at II-22, Table 5 (KOR-6); see Exhibit 48A (Welded Line Pipe
– Domestic Industry Capacity, Apparent Consumption and Export Shipments). (KOR-48A).WT/DS202/R
Page C-8
to which imports from Korea of dual stencilled line pipe were used in standard pipe
applications.”  Did the USITC seek such information for itself?
Answer
In US – Wheat Gluten,  the Appellate Body held that Article 3.1 of the SA requires that the
“authorities charged with conducting ... an “investigation” – must actively seek out pertinent
information … [W]here the competent authorities do not have sufficient information before them to
evaluate the possible relevance of such an ‘other factor,’ they must investigate fully that ‘other factor,’
so that they can fulfil their obligations ... under Article 4.2(a) of the SA.” 26
This issue on dual-stencilled line pipe was raised and discussed by the Korean Respondents
during the ITC investigation on several occasions. The fact that there had been several years of
litigation over the proper classification of such pipe strongly indicated that the effect might be very
significant.27  The ITC should have investigated the extent and proper quantification of dual-stencilled
line pipe if it was not satisfied with the evidence presented by the Korean Respondents.  That
evidence included:  (i) an affidavit and direct testimony by an individual, Mr. Smith, with 35 years ofexperience in the industry;
28 (ii) a confidential affidavit by a distributor with equivalent experience
who confirmed the estimate of Mr. Smith that 70-80 per cent of the dual-stencilled line pipe imported
into the West Coast is sold for standard pipe applications;29 and (iii) the actual export data, by mill, by
specification and by region, which supported the affidavits.30
14. Did the ITC undertake any quantitative analys is (such as a regression analysis, and/or
elasticity analysis, for example) in support of its qualitative analysis regarding the impact of
other factors such as the oil and gas crisis, and declines in the domestic industry exports?
Answer
No.  The ITC’s legal analysis of causation, specifically the investigation of the effects of
“other factors,” clearly was insufficient and not in compliance with Article 4.2(b) of the SA.  The ITC
did not attempt to identify and isolate the effects of other factors such as the oil and gas crisis.  They
certainly were not “quantified” in any manner.  Yet, the United States says they “weighed” the
relative impact of each factor (one by one).  However, as elaborated in Korea’s Written Rebuttal, the
United States relied almost exclusively on a two- period comparison for its causation or “weighing”
analysis.  Regardless of the hypothetical integrity of such an analysis, that actual comparison was
riddled with flawed facts and assumptions.
15. In para. 104 of its first submission the Unit ed States responds to Korea’s argument that
the industry was not injured as shown by an increase in capital expenditure during the POI.Would the United States also comment on Kore a’s argument made in Para 250 of its first
submission that during the POI two new producers began operations in 1998 and 1999?
                                                     
26 See US – Wheat Gluten (AB) at paras. 53 and 55.
27 See Exhibit 53 (Posthearing Brief on Injury of Japanese and Korean Respondents (7 October 1999)
(Exh. 13) (attaching the description of the factual background to this dispute in the US Court of Appeals for theFederal Circuit.  The implications of that issue were discussed in both the pre-hearing brief and post-hearingbrief (KOR-53).
28 See Prehearing Brief, Exh. 13 (affidavit of Mr. Ed Smith) (KOR-53).
29 See Posthearing Brief, Exh. 2 (KOR-25).
30 See id., Exh. 12 (KOR-53).WT/DS202/R
Page C-9
Answer
Korea believes that this is very relevant evidence confirming that the industry was not in a
state of significant overall impairment.  Producers do not enter an industry that promises no financial
return.31
16. In para. 109 of its first submission the Unit ed States explains that the $25 – $30 price
increase referred to by Korea could just as li kely compensate for rising raw material costs
following the imposition of anti-dumping duties on hot-rolled steel.  Were all imports of hot-
rolled steel affected by the anti-dumping measu re? What was the coverage of the US measure or
measures on hot-rolled steel?  Were there oth er suppliers of hot-rolled steel that were not
affected by the anti-dumping measures?  Furthermore, at para. 22 of its first writtensubmission, the United States refers to a “decline in the price of hot-rolled carbon steel.”  Is
such a price decline consistent with the rising ra w material costs referred to in para. 109 of its
first written submission?  Please explain.
Answer
The antidumping investigation of hot-rolled steel covered imports from Japan, Russia and
Brazil only.  Imports from Russia and Brazil are covered by suspension agreements while imports
from Japan are covered by an antidumping order.32
There were a number of other suppliers of hot-rolled coil that were not covered by the
antidumping case.  According to US Census Bureau statistics, there were over 40 exporters of hot-
rolled steel to the United States, including major suppliers such as Korea, Canada, Taiwan, France,
the Netherlands, etc.33
Finally, with respect to raw material costs and the conflict between the US assertions
concerning rising raw material costs at paragraph 109 of its First Written Submission and declining
raw material costs at paragraph 22 of its First Written Submission, the data before the Commission
clearly confirms that raw material prices were at an all-time low at the end of the POI – in part
explaining why line pipe prices had declined.  During the period of January-June 1999, raw material
prices had declined to $244/ton compared to $276/ton during the January-June 1998 period and
$290/ton for 1998 as a whole.34
Finally, as noted in Korea’s submission, announced line pipe price increases totaled $80/ton
by the time of the ITC decision.35
                                                     
31 Prudential and Northwest Pipe are the two producers who entered the market in 1999.  See ITC
Determination, Crawford Dissenting Views on Injury, p. I-61, n.26;  see e.g., Prehearing Injury Brief at 13-14,
Exh. 4 (KOR-56) (Prudential press release, dated 22 Se ptember 1999, stating: “As a result of improvements in
demand and pricing, we expect to break even or show a slight profit in our third quarter results, with anticipationof further improvement in the fourth quarter.”); see also Korean Respondents’ Posthearing Brief on Remedy,p. 35, Exh. 11 (KOR-56)(Northwest Pipe press release, dated 19 October 1999, stating: “We have seen definite
improvement in demand and pricing, and we expect to see further improvement in the fourth quarter…”).
32 See ITC Determination, Separate Views on Injury at I-48 n.88 (KOR-6).
33 See Exhibit 54 (US Imports of Hot-Rolled Steel Products) (KOR-54).
34 See ITC Determination, Staff Report at II-28, Table 10 (KOR-6).
35 See ITC Determination, Crawford Dissenting Views on Injury at I-69, n.68 (KOR-6); Posthearing
Brief on Injury, Exhibit 1 (KOR-25); Korea’s Statement Regarding the United States Request For A Preliminary
Ruling (WT/DS202)(11-12 April 2001) at p. 2.WT/DS202/R
Page C-10
(iii) Exclusion of Canada and Mexico
17. According to the United States, the abse nce of any reference to GATT Article XIX in
Article XXIV:8(b) means that Article XIX safegu ard measures “may or must be made part of
the general elimination of ‘restrictive regulations of commerce’ under any FTA (para. 216, USfirst written submission).  Why does the United  States consider that safeguard measures “may”
(as opposed to “must”) be made part of the general elimination of “restrictive regulations of
commerce” under any FTA?  Would an a contrario reading of Article XXIV:8(b) mean that the
imposition of a safeguard measure between FTA partners is inconsistent with the concept of an
FTA?  Please explain.
Answer
Korea considers that the US position on this point is inconsistent and illogical. We assume
this position by the United States is necessitated by the fact that the NAFTA exception is applied on a
case-by-case basis.  It seems to be the US position that Article XXIV of the GATT 1994 does not
address the issue.  For this reason, Korea does not believe that the United States is relying onArticle XXIV:8 as a defence.
Article XXIV:8(b) of the GATT 1994 has a meaning.  Either Article XIX measures are
permitted between FTA Members or they are not.  The fact that Article XIX does not appear in
Article XXIV:8 is not dispositive, as the Appellate Body held in Turkey – Textiles .
36
18. Is it logical that Article XIX safeguard measures are not permitted between FTA
partners, while Article XI measures are, given the fact that Article XIX safeguard measures
may take the form of (Article XI) quantitative restrictions?  Please explain.
Answer
See Korea’s answer to Panel’s Question 16 to the Republic of Korea.
19. In Turkey – Textiles (WT/DS34), the Appellate Body stated that a GATT Article XXIV
defence may be available in the context of a customs union if two conditions are met:  (1) the
measure at issue is introduced upon the formation of the customs union, and (2) “the formationof [the] customs union would be prevented if it were not allowed to introduce the measure at
issue.”  In this regard, please explain how the formation of the NAFTA would have been
prevented if the NAFTA parties had not been allowed to introduce the safeguards exemption
provided for in section 311(a) of the NAFTA Implementation Act.  If the formation of NAFTA
would have been prevented but for the safeguards exemption, why are NAFTA members notautomatically excluded from safeguard measures imposed by other NAFTA members?
Answer:
It is not clear to Korea that the United States is relying on Article XXIV of the GATT 1994 as
a “defence” in this case.  The United States seems to center its entire argument on the language of
Footnote 1 to Article 2.1 of the SA, which does not apply to the US safeguard measure.
In fact, Korea believes that Article XXIV of the GATT 1994 cannot provide a defence when
the NAFTA explicitly provides that safeguards are to be applied on a case-by-case basis.
                                                     
36 Turkey – Restrictions on Imports of Textile and Clothing Products, WT/DS34/AB/R
(22 October 1999) at para. 64.WT/DS202/R
Page C-11
20. The United States argues, on the basis of th e last sentence of note 1 to the Safeguards
Agreement, that “issues related to FTA imports are to be addressed exclusively under the
relevant GATT 1994 articles” (para. 220, US first written submission).  In this regard, please
comment on the Appellate Body’s finding in  Argentina – Footwear (para. 106) that “the
footnote only applies when a customs union applies a safeguard measure ‘as a single unit or onbehalf of a member State.’“  Does the United States consider that the Appellate Body’s finding
does not apply to the last sentence of footnote 1?  Please explain.
Answer
It is impossible to read the Appellate Body opinion as providing that the last sentence of
Footnote 1 is separate from the rest of F ootnote 1 and not covered by the Appellate Body’s
interpretation that “the footnote” – i.e., not parts thereof – “only applies when a customs union applies
a safeguard measure ‘as a single unit or on behalf of a member State.’” 37  The language of the
opinion is quite definitive.  The only issue the Appellate Body did not address is whether
Article XXIV of the GATT 1994 – independent of Footnote 1 – provided Argentina with a defence to
a violation of any other provision of GATT 1994, because Argentina did not appeal that issue. We
note that the United States does not appear to be relying on Article XXIV as a defence.
21. If footnote 1 to the Safeguards Agreement was relevant in some way to the issue of
which Members could be subject to a safeguard measure, is it relevant that footnote 1 has been
inserted in Article 2.1 of the Safeguards Agreement, rather than Article 2.2?  Please explain.
Answer
See Korea’s answer to Panel’s Question 15 to the Republic of Korea.
(iv) Unforeseen developments
22. At para. 230 of its first written submission, the United States asserts that the collapse in
oil prices was not expected.  At what point in time is the United States referring to in making
this statement?  In other words,  when was the collapse in oil prices not expected, or unforeseen?
Answer:
First, Korea notes that the United States made  no attempt in its decision to comply with its
obligation to identify “unforeseen developments.”  Moreover, the Appellate Body has identified that
“‘emergency actions’ are to be invoked only in situations when, as a result of obligations incurred
under the GATT 1994, a Member finds itself confronted with developments it had not ‘foreseen’ or‘expected’ when it incurred that obligation.”
38  To suggest that a “boom/bust” cycle is not expected in
an industry historically characterized by “boom/bust” cycles defies the meaning of “unexpected.”  Notonly are these cycles expected in this industry, but the capital investment cycles of this industry
clearly demonstrate that this industry is aware of these cycles and invests accordingly.
39
                                                     
37 Argentina – Safeguard Measures on Imports of Footwear, Report of the Appellate Body,
WT/DS121/AB/R (14 December 1999) (“ Argentina – Footwear (AB) ”) at paras. 106-109 (emphasis added).
38 Argentina – Footwear (AB)  at para. 93 (emphasis added).
39 See generally Korea First Written Submission, paras. 31-33, 246-51; ITC Determination, Crawford
Dissenting Views on Injury at I-62 n.33 (KOR-6).WT/DS202/R
Page C-12
(v) Causal link
23. Did the ITC demonstrate that the oil and gas crisis was not a more important cause of
injury than increased imports, as it claimed to, or did the ITC simply demonstrate that the oil
and gas crisis did not account for the totality of the injury suffered by the domestic industry?In other words, did the United States simply demonstrate that the industry would still have
suffered injury, irrespective of th e crisis in the oil and gas industry?  If so, is this sufficient to
distinguish the injurious effects of the increased im ports from the injurious effects of the oil and
gas crisis?  Please explain.
Answer
Irrespective of whether it would be a sufficient analysis, Korea does not believe that the
United States demonstrated that the industry would still have suffered injury irrespective of the crisis
in oil and gas.  The United States never performed such an analysis nor addressed this question.  It
only examined whether imports were a greater cause of injury than that single cause, standing alone.40
The focus and sequence of the US evaluation of “other factors” is inconsistent with
Article 4.2(b) of the SA.  The ITC begins with an analysis of the combined effects of other factors
plus imports and determines whether they together cause “injury.” 41  If so, then the ITC examines
whether “the impact of increased imports is as great or greater than the effect of the downturn in
demand” 42 or any other independent cause.  This analysis is backwards and it does not isolate the
effects of other factors.
Article 4.2(b) of the SA clearly requires that imports cause  “serious injury.”  Other factors
also can simply be the cause of “injury” in accordance with Article 4.2(b).  This language strongly
supports the view that the injury from other factors must be specifically isolated before the serious
injury from imports is evaluated.43
The ITC Majority engaged in a two-period analysis to evaluate causation.  They compared the
period of 1994-1996 with the period of 1998 and the first half 1999.  However, they began with an
incorrect factual finding with respect to imports.  As the Panel observed at the meeting of the parties,
the percentage increase in imports between 1996 a nd 1997 and the percentage increase between 1997
and 1998 were very comparable, and 1997 was the industry’s best year.  The ITC nonethelesssimplistically concluded that the effect of the imports was much greater than the effect of the oil and
gas crisis since the presence of imports was the only significant difference facing the industry in
1998/99 and 1994-96.
The ITC Majority also ignored the other significant differences.  First, the ITC assumed that
the effects of the oil and gas crisis could be measured in their totality by reference to the level of
apparent consumption in 1999.  They then looked exclusively at the annualized level of consumption
in 1999 and found that it was not significantly below that for the period of 1994-1996.  This analysis
ignored the very significant fact that there was a 30 per cent decline in apparent consumption from the
                                                     
40 See ITC Determination, Majority Views on Injury at I-22 (KOR-6).  The Separate Views on Injury
concluded that the scale tipped the other way and reached the contrary conclusion with respect to the question of
present injury-- i.e., they determined that the oil and gas crisis was the greater cause of present injury, but
imports were the greater cause of threat.  See ITC Determination, Separate Views on Injury  at I-37, I-44
(KOR 6).
41 See ITC Determination, Majority  Views on Injury  at I-22 (KOR-6).
42 Id.
43 See US – Wheat Gluten (AB)  at paras. 68-69.WT/DS202/R
Page C-13
first half of 1998.44  Such a significant drop in consumption could be expected to produce significant
injurious effects.  No similar drop in consumption had been experienced in the previous periods.45
Furthermore, that decline coincided with a 25 per cent increase in domestic capacity on an annualized
basis due to significant new capacity coming on stream46 (US producers were projecting an increase
in demand).47  Export markets had also dried-up due to the decline in oil and gas demand worldwide.
Thus, the ITC failed to properly identify and isolate the effects of other “differences” between
those two periods, including increased capacity, declining export markets and domestic
consumption.48  The oil and gas crisis was the underlying cause that produced all these other effects
and their confluence caused an industry decline.  The combined effects of all these factors so dilute
the effects of imports that imports no longer had a genuine and “substantial” relationship to the
serious injury.
24. Is a determination that the crisis in the oil and gas industry could not have accounted
for the totality of the serious injury experi enced by the domestic industry sufficient to
demonstrate a genuine and substantial relationship of cause and effect between the increased
imports and the serious injury suffered by the domestic industry?  Does such a determinationensure that none of the injurious effects caused by the crisis in the oil and gas industry have
been attributed to increased imports?  Please explain.
Answer
No, it cannot since Article 4.2(c) of the SA only requires that “other factors” cause “injury”
(Imports must cause “serious injury.”)  By definition, other factors may not account for the totality of
serious injury.
As noted above, the ITC analysis is backwards and does not properly isolate the effects of
other factors.  Nor does the US causation standard even allow the ITC to measure the effect of each
factor.  Rather, the US methodology is simply to weigh imports against each individual cause.
Hypothetically, under the US standard, if there are 10 causes, including imports, each contributing 10
per cent of the “injury,” the ITC could determine that imports are the substantial cause of serious
injury because imports are “not less than any other single cause.”  Yet, imports in this scenario could
not be found to bear a “genuine and substantial” relationship to serious injury since in the absence of
these other factors, serious injury  may not have occurred.49  This standard does not comply with the
requirements of Article XIX of the GATT 1994 or Article 4.2(b) of the SA.
25. Did the ITC find that injury was caused by “o ther factors” in addition to the decline in
the oil and gas industry?  If so, how did the ITC ascertain that the injurious effects of all these
“other factors” together did not preclude the conclusion that there was a genuine andsubstantial relationship of cause and effect between the increased imports and the serious
injury?
                                                     
44 The United States indexed data shows that apparent consumption declined almost 30 per cent
between first half of 1998 and second half of 1999.  See US 16 February Letter .
45 See id..
46 See KOR-48A.
47 See KOR-56.
48 See KOR-48A.
49 See Restatement (Second) of Torts § 433 cmt. e. (1965)(KOR-58).WT/DS202/R
Page C-14
Answer
See answers to Questions 23 and 24 above.  Moreover, we note that the ITC did not properly
investigate the extent to which producers had shifted between the production of OCTG and line
pipe.50  The United States had an obligation to conduct a more thorough analysis of the degree to
which the collapse in the market for OCTG resulted in a shift to line pipe production and distorted the
financial results of the line pipe industry.51
(vi) Developing country exemption
26. Does the Line Pipe measure “appl[y]” (within the meaning of Article 9.1 of the
Safeguards Agreement) to developing countries?
Answer
There is no question that the safeguard measure would apply to developing countries if they
exported in excess of the 9,000 short tons.  The 9,000 short tons is an arbitrary limit that does notreflect the terms of Article 9 of the SA.  The language of Article 9 suggests that the determination of
whether a developing country is “in” or “out” should be made at the time the measure is imposed so
that it can be determined whether the measure applies to them or not.  The 9,000-short-ton limit is
arbitrary also because it must be constantly reconstructed based on current import levels.  This is
particularly the case when Mexico and Canada are excluded so that import levels will vary.
27. With regard to para. 227 of the US first written submission, does the 9,000-short-ton
exemption guarantee that developing country Memb ers accounting for 3 per cent or less of total
subject line pipe imports into the United States will not be subject to the Line Pipe measure?
What if the volume of subject line pipe imports (especially from Canada and Mexico) increasesto such an extent that a developing country Member could export more than 9,000 short tons to
the United States, and still remain at or below the 3 per cent threshold?
Answer
No, it does not guarantee that developing country Members will not be subject to the line pipe
measure.  The measure is a TRQ, with a quota of 9,000 short tons plus a 19 per cent duty.  The TRQapplies equally to developing countries.  Were a developing country to export 10,000 short tons to the
US market, 1,000 tons would be subject to a 19 per cent tariff.  Thus, the United States has failed to
exempt developing countries.  With respect to the US claim that 9,000 short tons represents the 3 per
cent limit, Korea observes that 9,000 short tons is far in excess of 3 per cent of current import levels
and could be below future levels.  If developing countries are not exempted, they are also denied theirpreference under Article 9 of the SA because the overall limit has not been set by the United States in
this case.  There is no way of determining what level of imports 3 per cent represents.
(vii) Increased imports
28. In Argentina – Footwear , the Appellate Body found that the increase in imports must be
inter alia  “recent enough.”  How “recent”  should the increa se in imports be, relative to the date
of the competent authority’s decision to impose a safeguard measure?  What is the minimum
period of time that a domestic industry would need in order to file a petition following a sudden
increase in imports? In the present case, could the US line pipe industry have filed a petition
                                                     
50 See US – Wheat Gluten (AB)  at para. 55; see also KOR-48C (The Percentage Relationship Between
Net Shipments of Line Pipe and Net Shipments of OCTG).
51 See US – Wheat Gluten(AB)  at para. 55.WT/DS202/R
Page C-15
before it did?  Please explain.  Could the ITC have reached its determination before it did?
Please explain.
Answer
See Korea’s answer to Panel’s Question 3 to the Republic of Korea.
29. The United States argues in para. 66 of  its first submission that a comparison of
“mismatched” interim periods could create dist ortions because of seasonal changes in market
conditions.  Does the United States, therefore, believe that line pipe is a seasonal product?  If
line pipe is not a seasonal product why is it necessary to compare “matched” interim periods, as
opposed to the immediately preceding interim period?
Answer
The ITC record contains no evidence that line pipe is a seasonal product.WT/DS202/R
Page C-16
ANNEX C-2
THE REPUBLIC OF KOREA’S COMMENTS ON UNITED STATES’
RESPONSE TO QUESTIONS FROM THE PANEL AT THE
SECOND MEETING WITH THE PARTIES
1. The Panel extended to the Parties the opportunity to respond to the submissions of
15 June 2001.  Before proceeding, Korea notes that it provided its responses to the Panel’s questions
and to the positions of the United States as they were expressed by the US representatives at the
Second Meeting with the Parties (“Second Panel Meeting”).  Very little has been added by the United
States through the written response.  Therefore, rather than repeating our points and arguments, Korea
will largely confine itself to commenting on new material provided in the US response.
Questions for All
2. Question 4, paragraphs 8-11 of the United States Responses to Questions from the Panel at
the Second Meeting with the Parties (‘Second US Resp onse”).  Korea notes that the United States has
made no claim of prejudice because, of course, it could not do so.  As noted in paragraph 11 of
Korea’s Second Response to Questions,1 the Appellate Body held in Thailand – Antidumping on
Angles  that the question is whether a party “suffer[ed] any prejudice on account of any lack of clarity
in the panel request.”2  None has been claimed here nor shown to exist.
3. As Korea properly identified in paragraph 9 of the “Panel Request,”3 critical information on
which the United States relied in its decision-making has not been provided to Korea.  Korea’s claim
in paragraph 9 is clearly separate from its Article 3 and 4 claims made in relation to the ITC phase ofthe investigation in paragraph 1 of its Panel Request.
4  The nature of the measure and “how” it was
determined to be limited to the extent necessary to remedy the injury are the most basic critical
information.  To date, the US response has been limited to the scant information contained in the
Presidential Proclamation.
4. This issue regarding the lack of critical information regarding the measure has been central to
this case.  In its letter of 30 January 2001, to the Panel, Korea requested the Panel to seek information
pursuant to its authority under Article13.1 of the DSU, including with respect to the measure.
5. The United States has responded to the Panel that the obligation to explain the basis of the
action – as required by Articles 3.1 and 4.2(c) of the SA – does not extend to the Article 5.1
obligations.  Korea has disagreed from the outset.  The issue has been raised and fully addressed byboth parties.  There is no basis to allege prejudice.
6. Regarding the ongoing obligation of Article 5.1,  the United States takes issue with the
phraseology used for the claims contained in Korea’s panel request.  The United States cites to the
“tense” in which particular verbs appear in the Panel Request as proof of what is in or out of the Panel
                                                     
1 Korea’s Responses to Questions to the Partie s from the Panel and Korea’s Initial Comments on
Responses of the United States during the Second Substantive Meeting of the Parties , (15 June 2001).
2 Thailand – Antidumping Duties on Angles , Shapes and Sections of Iron or Non-Alloy Steel and H-
Beams from Poland , Report of the Appellate Body, WT/DS122/AB/R (12 March 2001) at para. 95.
3 See United States – Definitive Safeguard Measures  on Imports of Circular Welded Carbon Quality
Line Pipe from Korea (“US – Safeguard Measures on Line Pipe”) , Request for the Establishment of a Panel by
Korea (“Panel Request”), WTD/DS202/4 (15 September 2000) at para. 9.
4 See US – Safeguard Measures on Line Pipe, Panel Request, at para. 1.WT/DS202/R
Page C-17
Request.  Such an allegation is clearly at odds with the Appellate Body precedents and ignores the
distinction made by the Appellate Body between arguments and claims.5
Questions for the United States
7. Question 1, paragraph 23 of the Second US Response.  The United States now states that
“there is no other documentation demonstrating how, at the time it applied the line pipe safeguard, the
United States ensured compliance with the obligations of Article 5.1.”
8. In the United States’ Response to Questions from the Panel and Korea , dated 7 May 2001, the
United States conceded, at paragraphs 26-30, that there are additional documents prepared during the
Presidential decision making.  It is the position of the United States, however, that they will not be
released to the Panel.
9. Question 6, paragraph 37 of the Second US Response. The US seems to be arguing over
whether the allocation methodology is only somewhat distortive (because the declines for both line
pipe and OCTG were similar) or very distortive because OCTG declined much more precipitously
than line pipe.  (Korea has demonstrated that, in fact, the latter was the case.)  In either case, the
failure to properly separate out the effect of the declines due to OCTG was an error and overstated the
declines in the line pipe industry indicators.  The ITC never conducted such an analysis but rather
simply defended the methodology as “verified” by ITC staff.  Korea believes that the Panel shouldconclude that the database before the ITC could not form the basis for a serious injury or threat
decision because of the significant distortions in the data and the failure to properly isolate the “like
product” (see also Korea’s Response in paragraph 21).
10. Moreover, we disagree with the U.S. observation that Commissioner Crawford “misread AISI
data.”  Korea Exhibit 48-C, using the AISI monthly shipment data relied on by the ITC and includedin the U.S. Exhibit 3, demonstrates that domestic shipments of OCTG declined more sharply in 1998
and 1999 compared to domestic shipments of line pipe.
6  The graph is correct and demonstrates that
costs allocated on the basis of a company’s sales of OCTG and line pipe will result in an over-
allocation of costs to line pipe simply because of the more precipitous collapse in OCTG sales during
that period.
11. Question 8, paragraph 40.  Korea believes that a proper analysis of Geneva Steel was never
performed.  Moreover, the US did not answer the Panel’s question concerning what the industry’s
operating income would have been without the costs associated with Geneva Steel’s closing of its
blast furnace and attendant bankruptcy.
12. Question 10, paragraph 42 of the Second US Response.  The United States repeats its
accusation that Korea has “conceded” that certain conditions were unexpected.  Korea does not and
has not conceded that the United States has met its obligation with respect to “unforeseendevelopments”.
13. As noted at paragraphs 147-149 of Korea’s Written Rebuttal, the “unforeseen development”
must be the cause of the increase in imports.
7  The oil and gas crisis, which Korea agrees caused the
                                                     
5 See Korea  – Definitive Safeguard Measure on Imports of Certain Dairy Products , Report of the
Appellate Body, WT/DS98/AB/R (14 December 1999) at para. 123; European Communities – Regime for the
Importation, Sale and Distribution of Bananas , Report of the Appellate Body, WT/DS27/AB/R (9 September
1997) at paras. 141-43 (“Article 6.2 of the DSU requires that claims , but not the arguments , must all be
specified sufficiently ... in order to allow the defending party ... to know the legal basis of the complaint.”)
6 See Exhibit 48C (KOR-48C) and Second US Response  at para. 31.
7 Written Rebuttal of Korea  (7 May 2001) at paras. 147-49.WT/DS202/R
Page C-18
temporary decline in the industry indicators, did not cause imports to increase.  Indeed, it caused
imports to decline as well.  That, of course, is the point.
14. Korea made its claim with respect to unforese en developments in paragraph 2 of the “Panel
Request”8 and the United States does not deny that it failed to make a finding of unforeseen
developments in its determination in violation of Article XIX.9
15. Other Questions, Capacity:  paragraph 49 of the Second US Response.  The United States
refers to the ITC questionnaire, which defined average production capability as follows:
Average production capability .  The level of production that your establishment(s)
could reasonably have expected to attain during the specified periods.  Assume
normal operating conditions (i.e., using equipment and machinery in place and ready
to operate; normal operating levels (hours per week/weeks per year) and time for
downtime, maintenance, repair, and cleanup ; and a typical or representative product
mix).10
16. The above definition does not impose a uniform methodology on domestic producers.  To the
contrary, the actual allocation methodology is at the discretion of each producer and explained in the
confidential questionnaire responses.  The ITC determination makes no mention of the closing of
facilities in the second half of 1998.  Yet, according to the ITC at Table 5 in its determination,
domestic capacity in 1998 and 1999 was as follows:
1st half 1998 2nd half 1998 1st half 1999
656,714 480,668* 708,952
*  1,137,382 (1998 capacity) - 656,714 (1st half 1998) = 480,668
Source: ITC Report, Table 5, at II-22, KOR-6.
17. It is difficult to believe that 176,046 tons were removed from the domestic industry in the
second half of 1998 – but was not noted by the ITC – and then jumped by 228,284 tons (47.5 per cent)
in the first half of 1999.  That makes no sense, given the nature of the industry in question.  Thus, it is
appropriate to annualize 1999 data to get an accurate picture of the degree to which capacity increasedbetween 1998 and 1999 – i.e., 25 per cent.  Capacity could not increase by 8 per cent between the first
half of 1998 and 1999, as alleged by the US.  Nor, could it have increased by 47.5 per cent, which is
the alleged amount of increase between the second half of 1998 and the first half of 1999.  It increased
by 25 per cent between 1998 and 1999, partly due to the inauguration of new plants.  That increase in
capacity was responsible for “leading” prices down.
18. Other Dual-Stencil Line Pipe Questions, para graphs 50-52 of the Second US Response.  The
United States suggests that the issue of dual-stencil line pipe was a new issue that was first raised in
the Respondent’s Pre-Hearing briefs.
                                                     
8 See U.S. – Safeguard Measures on Line Pipe , Panel Request, at para. 2.
9 See United States - Safeguard Measures on Import s on Fresh, Chilled or Frozen Lamb Meat from
New Zealand, Report of the Appellate Body, WT/DS177/AB/R (1 May 2001) at para. 74.
10 General Information, Instructions, and Definitions for Commission Questionnaires , Circular Welded
Carbon Quality Line Pipe, Inv. No. TA-201-70 at 6.WT/DS202/R
Page C-19
19. The fact is that the issue of the usage of dual-stencil pipe had been well-known to the ITC
even before the beginning of the investigation on the instant case.  Thus, in its Pre-Hearing Staff
Report, the ITC noted as follows concerning dual and triple stencilling by US producers.
In some instances, the assignment of sales values and costs to welded line pipe and
standard pipe was complicated by dual (or tr iple) stenciling.  For example, the triple
stenciled welded line pipe and standard pipe sold by *** in 1994 were physically the
same product.  Under these circumstances, according to company officials, the
product’s end use is the only practical way to distinguish between welded line pipe
and standard pipe.11
20. We note that the ITC appears to be treating dual/triple stencilled line pipe produced by
domestic producers as line pipe or standard pipe depending on their usage.  We further note that the
ITC, irrespective of such a prior knowledge, did not ask purchasers to identify what percentage of
their sales of dual/triple stencilled pipe were used respectively for standard or line pipes.  Anincidental point to be made here is ITC’s differential treatment of witnesses for petitioners and for
respondents.  The ITC completely ignored the witn ess for Korean respondents, whose testimony was
also under oath, and whose testimony was further supported by an additional confidential affidavit
12
and actual imports of dual stencil pipe by port.13.
21. Moreover, it appears that dual-stencilled or triple-stencilled line pipe was not always treated
as “line pipe” by the US domestic industry itself.  For the purposes of assigning costs and sales, it
seems that the US industry based allocations between standard pipe and line pipe based on “end use”
of those pipes.  Korea finds that this is another distortion in the sales and cost data since the ITC
treated all dual-stencilled or triple-stencilled line pipe as “line pipe” in terms of imports .  This  further
highlights the problem with the methodology the ITC used to allocate the cost data.
22. Finally, the ITC routinely follows up and requests information additional to that in the
original questionnaires.  As the US admits in its response to Panel questions, the ITC specifically
requested additional data from the Japanese producers in the case of arctic grade and alloy line pipe,
which it treated as “a supplement to the Japanese producers’ questionnaire responses.”14 Obviously,
that same procedure was not followed with respect to the dual-stencil line pipe issue.
23. Other Questions.  The determination of the “competent authorities” and the views of the
Commission, Paragraphs 57-63 of  the Second US Response.
24. It appears to be the position of the US that the “competent authorities” encompass only the
ITC and only those Commissioners that made an af firmative decision on which a safeguard measure
can be based.
25. There is no support in the SA for such a narrow  reading, and the obligations of the SA are not
dependent on the structure of decision-making process in the United States or any other Member
State.  First, “competent authorities” is clearly a term used to refer to those entities entrusted with the
responsibility for safeguards actions.  The composition of that entity can not change depending upon
the determinations made from one case to another.  According to the US theory, the “competent
authorities” in the US could be three Commissioners in one case (in case of a 3-3 “affirmativedecision”) and all six in a unanimous decision.  There is no support for such a theory.  The SA is
                                                     
11 Prehearing Staff Report, Circular Welded Carbon-Quality Line Pipe, Inv. No. TA-201-70
(21 September 1999) at p. I-25; identical language in ITC Determination, Staff Report  at II-25 (KOR-6).
12 See Posthearing Brief of Japanese and Korean Respondents at Exh. 2 (KOR-25).
13  See id.  at Exh. 12 (KOR-62).
14 Second US Response  para. 48.WT/DS202/R
Page C-20
framed in terms of the entity – not individual memb ers of the ITC.  Similarly, under the US theory,
the President is not encompassed in the “competent authorities,” even though the President is clearly
an entity which finally decides whether to take a safeguard measure.
__________