UNITED STATES – CONTINUED DUMPING AND SUBSIDY OFFSET ACT OF 2000
Document: Recourse by Korea to Article 22.2 of the DSU
Date: 16 January 2004
Document codes: WT/DS217/25
Complainant: Australia, Brazil, Chile, EU, India, Indonesia, Japan, South Korea, Thailand
Respondent: U.S.
Third parties: Argentina, Canada, Costa Rica, Hong Kong, Israel, Mexico, Norway
Dispute stage: Implementation & Compliance
Agreements cited: Art. X:3  GATT 1994Art. 18.4  Anti-dumpingArt. 32.5  Subsidies and Countervailing Measures (SCM)Art. VI:3  GATT 1994Art. XVI:4  Agreement Establishing the World Trade OrganizationArt. 1, 5.4  Anti-dumpingArt. 4.10, 7.9, 10, 11.4, 18, 32.1  Subsidies and Countervailing Measures (SCM)Art. 8  Anti-dumpingArt. VI:2  GATT 1994Art. 18.1  Anti-dumping

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.

 The Republic of Korea requests that a special meeting of the Dispute Settlement Body be held
on 26 January 2004 in order to consider the following agenda item:

 : 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 and 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

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.