WORLD TRADE  
ORGANIZATION  WT/DS414/2 
14 February 2011 
 
 (11-0758) 
 Original:   English 
  
 
CHINA – COUNTERVAILING AND ANTI-DUMPING DUTIES ON  
GRAIN ORIENTED FLAT-ROLLED ELECTRICAL STEEL  
FROM THE UNITED STATES 
 
Request for the Establishment of  a Panel by the United States
 
 
  The following communication, dated 11 Febr uary 2011, from the delegation of the 
United States to the Chairman of the Dispute Settlement  Body, is circulated pursuant to Article 6.2 of 
the DSU. 
 
_______________ 
 
  On September 15, 2010, the United States Gove rnment requested consultations with China 
pursuant to Article 4 of the Understanding on Rules and Procedures Governing the Settlement of 
Disputes ( "DSU"), Article XXII:1 of the General Agreement on Tariffs and Trade 1994 ("GATT 
1994"), Article 17.3 of the Agreement on Implementation of Article  VI of the General Agreement on 
Tariffs and Trade 1994 ("AD Agreement"), and Article 30 of the Agreement on Subsidies and 
Countervailing Measures ("SCM Agreement").
1  The United States and China held such consultations 
on November 1, 2010.  Unfortunately these consultations did not resolve the dispute.   
 
 The United States considers that certain measures of the Government of the People's Republic of China ("China") are inconsistent with Chin a's commitments and obligations under the GATT 1994, 
the AD Agreement, and the SCM Agreement.  The measures impose countervailing duties and anti-
dumping duties on grain oriented flat-rolled electrical steel ("GOES") from the United States, and are set forth in Ministry of Commerce of the Peopl e's Republic of China ("MOFCOM") Notice No. 21 
[2010], including its annexes.   
  These measures appear to be inconsistent with the following provisions of the AD 
Agreement, SCM Agreement, and GATT 1994:  Initiation of the Investigation  
 
1. Articles 11.2 and 11.3 of the SCM Agreement, because:  
(a) The application for a countervailing duty i nvestigation failed to contain information 
reasonably available to the applicant re garding the existence of a financial 
contribution, a benefit, or specificity for sev eral of the alleged subsidy programs; and  
(b) There was insufficient eviden ce in the application to justify the initiation of an 
investigation for several of the alleged subsidy programs.   
                                                     
 
1 WT/DS414/1. WT/DS414/2 
Page 2  
 
  Subsidy Rate Determinations  
 
2. Article 12.7 of the SCM Agreement, because China improperly made its subsidy rate 
determinations based on the facts available.  In particular, China was not entitled to reject necessary 
information submitted by respondent producers.  The respondent producers submitted the necessary 
information in a reasonable period of time, and did not significantly impede the investigation.  In 
addition, China applied facts available in a punitiv e manner, and disregarded its own findings in doing 
so.   
3. Article 12.8 of the SCM Agreement, because China failed to disclose the essential facts 
underlying its final determination with regard to the subsidy rates, thus impairing the respondents' 
ability to defend their interests. 
4. Article 22.3 of the SCM Agreement, because Chin a failed to provide in sufficient detail the 
findings and conclusions it reached on all issues of f act and law it considered material in making its 
preliminary and final determinations, including w ith respect to its use of facts available. 
All Others Subsidy Rate Determination 
 5. Article 12.7 of the SCM Agreement, because Ch ina improperly applied facts available in 
determining the duty rate applicable to exporters that were not known at  the time of the investigation, 
including potential "new shippers" and exporters that were not given notice of the information 
required by the investigating authority.  In add ition, China applied facts available in a punitive 
manner, and disregarded its own findings in doing so.  
6. Article 12.8 of the SCM Agreement, because China failed to disclose the essential facts 
underlying its determination regarding the all others subsidy rate, thus impairing the interested parties' 
ability to defend their interests. 
7. Article 22.3 of the SCM Agreement, because Chin a failed to provide in sufficient detail the 
findings and conclusions it reached on all issues of fa ct and law it considered material in makings its 
preliminary and final determinations.  China also did not explain why the all others subsidy rate 
increased from the preliminary determination to the final determination.  
Antidumping Margin Determinations  
 
8. Articles 6.9 and 12.2.2 of the AD Agreement,  because China failed to disclose the essential 
facts underlying its determination a nd make available all relevant in formation on the matters of fact 
and law and reasons which led to the imposition of th e final measures, thus impairing the respondents' 
ability to defend their interests.  
All Others Dumping Determination  
 
9. Article 6.8 and paragraph 1 of Annex II of the AD Agreement, because China improperly 
applied facts available in determining the duty rate applicable to exporters that were not known at the 
time of the investigation, including potential "new sh ippers" and exporters that  were not given notice 
of the information required by the investigating authority.    
10. Article 6.9 of the AD Agreement, because Ch ina failed to disclose the "essential facts" 
underlying its determination regarding the all othe rs dumping rate, thus im pairing the respondents' 
ability to defend their interests.  WT/DS414/2 
 Page 3 
 
 
  11. Article 12.2 of the AD Agreement, because Ch ina failed to provide in sufficient detail the 
findings and conclusions it reached on all issues of fact and law it considered in making its preliminary or final determination regarding the all others dumping rate.  China also did not explain 
why the all others dumping rate increased from the preliminary determination to the final 
determination.  
12. Article 12.2.2 of the AD Agreement because Chin a failed to make available all relevant 
information on the matters of fact and law and reasons which led to the imposition of the final 
measure. 
Explanation of Final Countervailing Duty Determination 
 
13. Article 22.5 of the SCM Agreement because Chin a failed to make available all relevant 
information on the matters of fact and law and reasons which led to the imposition of the final 
measure. 
Confidential Information 
 
14. Articles 6.4 and 6.5.1 of the AD Agreemen t, and Articles 12.3 and 12.4.1 of the SCM 
Agreement, because China failed to provide, or require the applicant to provide, adequate non-
confidential summaries of allegedly confidential in formation.  China's treatment of confidential 
information did not allow the interested parties to obtain a reasonable unders tanding of the substance 
of the confidential information prior to the prelimin ary and final determinations , such that they could 
prepare presentations on the basis of this informat ion.  China did not give any indication that the 
information could not be summarized and did not  provide the reasons why summarization was not 
practicable.  
Injury Determination: Price Effects Analysis 
 
15. Article VI of the GATT 1994 and Articles 3.1, 3.2 , 6.9, and 12.2.2 of the AD Agreement, and 
Articles 12.8, 15.1, 15.2, and 22.5 of the SCM Agreem ent, because in its analysis of the price effects 
of imports under investigation, China did not dischar ge its obligations to de termine whether there had 
been significant price undercutting by the allege dly dumped imports, whether the effect of such 
imports was to depress prices to a significant de gree, or prevent price increases which would 
otherwise have occurred to a significant degree.  In particular:  
(a) China never disclosed several pieces of in formation critical to its price effects 
analysis; 
(b) China failed to provide in sufficient detail the findings and conclusions reached on all 
issues of fact and law it considered material  and failed to provide the reasons for the 
acceptance or rejection of the relevant argument or evidence by the exporters or importers; and 
(c) China's findings that the dumped and subsid ized imports had significant price effects 
failed to reflect an objective examination of  the evidence in the record and/or are 
unsupported by positive evidence.  
Injury Determination: Causation  
 
16. Articles 3.1, 3.5, 6.9, and 12.2.2 of the AD Agreement, and Articles 12.8, 15.1, 15.5, and 22.5 
of the SCM Agreement, in particular:  WT/DS414/2 
Page 4  
 
   
(a) China's causal link analysis relied on findings that did not reflect an objective 
examination of the record and/or are un supported by positive evidence.  China failed 
to examine all relevant evidence;  
(b) China never disclosed several pieces of info rmation critical to its causation analysis; 
and 
(c) China failed to provide in sufficient detail the findings and conclusions reached on all 
issues of fact and law it considered material. 
 In view of the claims set forth above, the United States considers that China has also acted 
inconsistently with Article VI of the GATT 1994, Article 1 of the AD Agreement, and Article 10 of 
the SCM Agreement, which only permit anti-dumpi ng or countervailing duty measures to be applied 
under the circumstances provided for in Article VI of the GATT 19994 and conducted in accordance 
with the AD Agreement and the SCM Agreement.  These measures also appear to nullify or impair 
the benefits accruing to the United States directly  or indirectly under the cited agreements.  
 
 Therefore, the United States respectfully re quests, pursuant to Article 6 of the DSU, 
Article 17.4 of the AD Agreement, and Article 30 of  the SCM Agreement, that the Dispute Settlement 
Body establish a panel to examine this matter, with  the standard terms of reference as set out in 
Article 7.1 of the DSU.   
__________