KOREA – ANTI-DUMPING DUTIES ON IMPORTS OF CERTAIN PAPER FROM INDONESIA
Document: Request for Consultations by Indonesia
Date: 10 June 2004
Document codes: WT/DS312/1; G/L/681; G/ADP/D54/1
Complainant: Indonesia
Respondent: South Korea
Third parties: Canada, China, EU, Japan, U.S., Taiwan
Dispute stage: Panel
Agreements cited: Art. 5.4, 2.6, 3.1, 4.1, 5.2, 5.3, 5.7, 12.1.1, 6.5, 6.7, Annex I, Annex II, 6.8, 12.2, 2.1, 2.2, 2.4, 5.8, 9.3, 3.2, 3.4, 3.5, 3.7, 6.1, 6.4, 6.9  Anti-dumpingArt. VI:1, VI:2(a), VI:2(b), VI:6  GATT 1994

KOREA – ANTI-DUMPING DUTIES ON IMPORTS
OF CERTAIN PAPER FROM INDONESIA

Request for Consultations by Indonesia

 The following communication, dated 4 June 2004, from the delegation of Indonesia to the
delegation of Korea and to the Chairperson of the Dispute Settlement Body, is circulated in
accordance with Article 4.4 of the DSU.

 My authorities have instructed me to requ est consultations with the Republic of Korea
("Korea") pursuant to Article 4 of the Unders tanding on Rules and Procedures Governing the
Settlement of Disputes ("DSU"), Article XXII:1 of the General Agreement on Tariffs and Trade 1994
("GATT") and Article 17 of the Agreement on Im plementation of Article VI of the General
Agreement on Tariffs and Trade 1994 ("AD Agreement" ) with respect to the imposition of definitive
anti-dumping duties on imports of business informa tion paper and uncoated wood-free printing paper
from Indonesia
1 and certain aspects of the investigation leading to the imposition of such duties.

 Article 1 of the AD Agreement requires that "[a]n anti-dumping measure shall be applied only
under the circumstances provided for in Article VI of GATT 1994 and pursuant to investigations
initiated* and conducted in accordance with the pr ovisions of [the AD] Agreement" [*footnote
omitted]. In the light of this requirement, and b ased on Article VI of GATT and other prov isions of
the AD Agreement hereafter cited, Indonesia is d eeply concerned about the following aspects of the
imposition of definitive anti-dumping duties and the investigation leading thereto:

 1. Korea's initiation of investigation:

• notwithstanding its failure to make a de termination that the application had
been made by or on behalf of the domes tic industry, (Article 5.4 of the AD
Agreement);

• notwithstanding its failure to make an objective examination of the
participation of the applicant Hansol Paper Co. ("Hansol") in the definition of
"domestic industry", despite Hansol's significant volume of imports from
Indonesia during the period of investigation for injury, (Article 3.1 and
Article 4.1(i) of the AD Agreement);

1 Imposed under Resolution No. 2003-22, issued by Korea Trade Commission dated
24 September 2003.

• notwithstanding the applicants' failure to include in the application sufficient
and adequate evidence of dumping, injury and causal link between the
alleged dumped imports and the injury, particularly in respect of:

(i) the occurrence of certain injury factors, inter alia, market share,
domestic prices, output, profits, ability to raise capital or investment,
employment, productivity, actual and potential negative effects on
cash flow, growth, and the magnitude of the margin of dumping,

(ii) the existence of causal link be tween the alleged dumped imports and
injury, as the information and evidence on injury submitted by the
applicants relates to a period of investigation (1999-2001) during
which – except for the quarter October to December 2001 – there
was no occurrence of dumping for the purpose of the investigation
(according to the Notice of Initiation, the period of investigation for
dumping was 1 October 2001 to 30 September 2002),

 (Article 5.2 and Article 5.3 of the AD Agreement);

• notwithstanding the fact that the period for injury and the period for dumping
overlapped only for a period of three months, Korea's failure to consider
simultaneously the evidence of both dumping and injury in the decision to
initiate the investigation, (Article 5.7 of the AD Agreement);

 2. Korea's failure to provide in the Notic e of Initiation, any information regarding the
factors on which the allegation of injury [was] based, (Article 12.1.1(iv) of the AD
Agreement).

 3. Korea's granting of confidential treatment to information contained in the domestic
industry's application without (i) requiring the applicants to provide showing of good
cause for such a treatment, (ii) requiring the applicants to furnish non-confidential
summaries "in sufficient detail to permit a reasonable understanding of the substance
of the information submitted in confiden ce", or (iii) any indication that the
information could not be summarized a nd the reasons why summarization was not
possible, (Article 6.5, Article 6.5.1 and Article 6.5.2 of the AD Agreement).

 4. Korea's making of a request for information from a firm which was not subject to
investigation - i.e. PT Cakrawala Mega Indah ("CMI") -, without having obtained the
agreement of that firm, and without havi ng notified the Government of Indonesia of
such request in the context of an on-the-s pot investigation, (Ar ticle 6.7 and Annex I
of the AD Agreement).

 5. Korea's rejection of information related to the sales of CMI, even though it was
(i) verifiable information, (ii) appropria tely submitted to be used without undue
difficulties, and (iii) submitted in a timely fashion, (Article 6.8 and paragraph 3 of
Annex II of the AD Agreement).

 6. Korea's failure to explain why it did not accept the information related to the sales of
CMI (Article 6.8 and paragraph 6 of Annex II of the AD Agreement).

 7. In the context of the preliminary determination:

• Korea's incorrect characterization of business information paper and uncoated
wood-free printing paper as like products (Article 2.6 of the AD Agreement)
and the failure to explain this conclusion in sufficient detail, (Article 12.2 of
the AD Agreement);

• Korea's resort to constructed value as the basis for determining normal value
for PT Pindo Deli and PT Indah Kiat, (A rticle VI:1 and VI:2 of GATT and
Articles 2.1. and 2.2 of the AD Agreement);

• Korea's construction of the normal va lue in respect of PT Pindo Deli and PT
Indah Kiat without taking into consider ation actual data from CMI pertaining
to sales in the ordinary course of trade of the like products subject to
investigation, notwithstanding the fact that all information requested by
Korea was supplied by the exporters in tim e, (Article 2.2, Article 2.2.1.1 and
2.2.2 of the AD Agreement);

• Korea's resort to best informati on available in order to construct
administrative, selling and general costs of PT Pindo Deli and PT Indah Kiat,
(Article 6.8 and paragraphs 3 and 6 of Annex II of the AD Agreement);

• Korea's failure to make a fair comp arison between the export price and the
constructed normal value of PT Pindo Deli and PT Indah Kiat inter alia, by
failing to take into account that domestic sales were made through the
intermediary CMI, while export sales were made directly to consumers,
(Article VI:1 and Article VI:2 of GATT and Article 2.1 and Article 2.4 of the
AD Agreement);

• For exporters who did not submit information to Korea ( i.e., PT Tjiwi Kimia
and unidentified exporters of Indonesia), Korea's arbitrary application of the
"best information available" standard to determine the dumping margin for
Tjiwi Kimia, (Article 6.8 and paragraph 7 of Annex II of the AD Agreement);

• In relation to further informati on provided by the domestic industry
concerning the domestic industry's pe rformance up to June 2002, Korea's
denial of access to such information by not making it available to the other
interested parties in a timely manner or by not allowing other interested
parties to see it so as to present their cases on the basis of this information,
(Article 6.1.2 and Article 6.4 of the AD Agreement);

• Korea's refusal to provide an opportuni ty to Indonesian exporters to present
their views in time prior to the disclosure of essential facts and final
determination, (Article 6.2 of the AD Agreement);

 8. In the context of the final determination:

• Korea's incorrect characterization of business information paper and uncoated
wood-free printing paper as like products (Article 2.6 of the AD Agreement)
and the failure to explain this conclusi on in sufficient detail notwithstanding
the views expressed by Indonesian exporters that business information paper

and uncoated wood-free printing paper ar e not like products, (Article 12.3 of
the AD Agreement);

• Korea's failure to determine individua l margins of dumping for PT Inda Kiat,
PT Pindo Deli and PT Tjiwi Kimia, (Article 6.10 of the AD Agreement) and
the consequent levy of an anti-dumping duty in excess of individual margins
of dumping, if any, (Article VI:2 of GATT and Article 9.3 of the
AD Agreement).

• Korea's resort to constructed value as the basis for determining normal value
for PT Pindo Deli, PT Indah Kiat and PT T jiwi Kimia, (Article VI:1 and VI:2
of GATT and Articles 2.1. and 2.2 of the AD Agreement);

• Korea's construction of the normal valu e in respect of PT Pindo Deli, PT
Indah Kiat, and PT Tjiwi Kimia without taking into consideration actual data
pertaining to sales of CMI in the ordinary course of trade of the like products
subject to investigation, (Article 2.2, Article 2.2.1.1 and 2.2.2 of the AD
Agreement);

• Korea's failure to make a fair comp arison between the export price and the
constructed normal value in respect of PT Pindo Deli, PT Indah Kiat and
Tjiwi Kimia, (Article VI:1 and Article VI:2 of GATT and Article 2.1 and 2.4
of the AD Agreement);

• Korea's incorrect classification of imports from PT Inda Kiat as dumped
imports as a result of treating PT Inda Kiat, PT Pindo Deli and Tjiwi Kimia
as a single economic unit, and the conse quent incorrect determination of
injury and causal link between the alleged dumped imports and injury,
(Article 3.1, Article 3.2, Article 3.4, and Article 3.5 of the AD Agreement,
and Article VI:1 and Article VI:6 of GATT);

• As a result of the incorrect characterization of business information paper and
uncoated wood-free paper as like products, Korea's incorrect assessment of
the impact of the dumped imports on the domestic industry, (Article 3.1,
Article 3.4, and Article 3.5. of th e AD Agreement, and Article VI:1 and
Article VI:6 of GATT);

• Korea's failure to evaluate the effect of the dumped imports on prices in the
domestic market for like products, (Article 3.1, Article 3.2, and Article 3.5 of
the AD Agreement, and Article VI:1 and Article VI:6 of GATT);

• Korea's failure to evaluate all releva nt economic factors and indices having a
bearing on the state of the domestic industry, in particular, actual and
potential decline, productivity, return on investment, factors affecting the
domestic prices, magnitude of the ma rgin of dumping, actual and potential
negative effects on cash flow, wages, growth, ability to raise capital or
investment, (Article 3.1, Article 3.4, and Article 3.5 of the AD Agreement,
and Article VI:1 and Article VI:6 of GATT);

• In relation to further informati on provided by the domestic industry
concerning the domestic industry's performance up to first half of 2003,

Korea's denial of access to such informat ion by not making it available to the
other interested parties in a timely manner or by not allowing other interested
parties to see it, (Article 6.1.2 and Article 6.4 of the AD Agreement).

 It appears to Indonesia that the foregoing cannot be reconciled with Article VI of the GATT,
Article 1 of the AD Agreement, and the specific provisions cited above.

 Indonesia looks forward to receiving your reply to this request at your earliest convenience. I
propose that the date and venue of these consultations be agreed between our two Missions.