CHINA – COUNTERVAILING AND ANTI-DUMPING DUTIES ON GRAIN ORIENTED FLAT-ROLLED ELECTRICAL STEEL FROM THE UNITED STATES RECOURSE TO ARTICLE 21.5 OF THE DSU BY THE UNITED STATES
Document: Request for the Establishment of a Panel
Date: 14 February 2014
Document codes: WT/DS414/16
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
RECOURSE TO ARTICLE 21.5 OF THE DSU BY THE UNITED STATES
Request for the Establishment of a Panel
The following communication, dated 13 February 2014, from the delegation of the United States to
the Chairperson of the Dispute Settlement Body, is circulated pursuant to Article 21.5 of the DSU.

On 16 November 2012, the Dispute Settlement Body ("DSB") adopted its recommendations and
rulings in the dispute China – Countervailing and Anti-Dumping Duties on Grain Oriented Flat-
rolled Electrical Steel from the Unit ed States ("China – GOES") (DS414).
1 The DSB found that the
Government of the People's Republic of China ("China") imposed antidumping and countervailing
duties on US exports of grain oriented flat-rolled electrical steel ("GOES") in a manner that
breached China's obligations under the Agreement on Implementation of Article VI of the General
Agreement on Tariffs and Trade 1994 ("AD Ag reement") and the Agreement on Subsidies and
Countervailing Measures ("SCM Agreement"). The DSB recommended that China bring its
measures into conformity with its obligations under these Agreements.

On 30 November 2012, China announced its intention to implement the DSB's recommendations
and rulings in this dispute and stated that it would need a reasonable period of time in which to do
so.
2 On 3 May 2013, the arbitrator appointed under Article 21.3(c) of the DSU issued an Award
providing China eight months and 15 days to implement the DSB's recommendations and rulings,
expiring on 31 July 2013.
3

On 31 July 2013, China issued a re-determination in relation to the duties at issue in this dispute,
as set forth in China's Ministry of Commerce (MOFCOM) Public Notice [2013] No. 51, including its
annexes. This re-determination continues the imposition of antidumping and countervailing duties
on imports of GOES from the United States.

On 21 August 2013, the United States and China informed the DSB that the two parties had
concluded Agreed Procedures under Articles 21 and 22 of the Dispute Settlement Understanding
("Agreed Procedures") .
4 Paragraph 1 of the Agreed Procedures provides that, "[s]hould the
United States consider that the situation described in Article 21.5 of the DSU exists, the United
States will request that China enter into consultations with the United States."5

On 13 January 2014, the United States requested consultations with China pursuant to
Paragraph 1 of the Agreed Procedures.
6 The consultations took place on 24 January 2014, but did
not resolve US concerns.

1 WT/DSB/M/324.
2 WT/DSB/M/326.
3 WT/DS414/12.
4 WT/DS414/14.
5 Original footnote 1 following this sentence reads: "The Parties agree that under Article 21.5 of the
DSU, consultations are not obligatory."
6 WT/DS414/15.

The United States considers that China has failed to bring its measures into conformity with the
covered agreements. Specifically, the United States considers that China's measures continuing to
impose antidumping and countervailing duties on GOES from the United States, as set forth in
MOFCOM Public Notice [2013] No. 51, including its annexes, and in MOFCOM Public Notice No. 21
[2010], including its annexes, are not consistent with the following provisions of the covered
agreements:

1. Articles 3.1 and 3.2 of the AD Agr eement and Articles 15.1 and 15.2 of the
SCM Agreement, because China failed to establish that the effect of the dumped and
subsidized imports was to depress prices to a significant degree or prevent price increases,
which otherwise would have occurred, to a significant degree, on the basis of an objective
examination of the record and positive evidence.

2. Articles 3.1 and 3.4 of the AD Agr eement, and Articles 15.1 and 15.4 of the
SCM Agreement, because China's findings that the dumped and subsidized imports
negatively impacted the domestic industry were not based on an objective examination of
the record and positive evidence, including an evaluation of all relevant economic factors
and indices having a bearing on the state of the industry.

3. Articles 3.1 and 3.5 of the AD Agr eement, and Articles 15.1 and 15.5 of the
SCM Agreement, because: (a) China's analysis of the alleged causal relationship between
subject imports and injury to the domestic industry was not based on an objective
examination of the record and positive evidence, including an examination of all relevant
evidence before the authorities, or an examination of any known factors other than
dumped and subsidized imports which at the same time were injuring the domestic
industry; and (b) China failed to meet the requirement that injuries caused by other
factors must not be attributed to the dumped and subsidized imports.

4. Article 6.9 of the AD Agreement and Arti cle 12.8 of the SCM Agreement, because China
failed to disclose the "essential facts" under consideration which form the basis for its
re-determination.

5. Articles 12.2 and 12.2.2 of the AD Agr eement, and Articles 22.3 and 22.5 of the
SCM Agreement, because China failed to provide in sufficient detail the findings and
conclusions reached on all issues of fact and law it considered material, and the reasons
for the acceptance or rejection of relevant arguments or claims.

6. Article 1 of the AD Agreement as a consequence of the breaches of the AD Agreement
described above.

7. Article 10 of the SCM Agreement as a conseq uence of the breaches of the SCM Agreement
described above.

8. Article VI of the GATT 1994 as a conseq uence of the breaches of the AD and
SCM Agreements described above.

As "there is disagreement as to the existence or consistency with a covered agreement of
measures taken to comply with the recommendatio ns and rulings" between the United States and
China within the meaning of Article 21.5 of the Understanding on Rules and Procedures Governing
the Settlement of Disputes ("DSU"), the United States seeks recourse to Article 21.5 of the DSU,
including wherever possible resort to the original panel.

The United States notes that China, pursuant to Paragraph 2 of the Agreed Procedures, has agreed
to accept the establishment of the panel at the first DSB meeting at which a request for the
establishment of an Article 21.5 panel appears on the agenda.