CHINA – COUNTERVAILING AND ANTI-DUMPING DUTIES ON GRAIN ORIENTED FLAT-ROLLED ELECTRICAL STEEL FROM THE UNITED STATES
Document: Request for the Establishment of a Panel by the United States
Date: 14 February 2011
Document codes: WT/DS414/2
Complainant: U.S.
Respondent: China
Third parties: Argentina, EU, Honduras, India, Japan, South Korea, Saudi Arabia, Vietnam, Russia
Dispute stage: Implementation & Compliance
Agreements cited: Art. VI  GATT 1994Art. 1  Anti-dumpingArt. 10, 11.2, 11.3, 12.7, 12.8, 22.3, 12.7, 12.8, 22.3, 22.5, 15.1, 15.2  Subsidies and Countervailing Measures (SCM)Art. 6.9, 12.2.2, 6.8, Annex II, 6.4, 6.5.1, 3.1, 3.2  Anti-dumping

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 several 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.

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 punitive 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 with 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.

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 determine 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:

(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.