UNITED STATES – COUNTERVAILING MEASURES CONCERNING CERTAIN PRODUCTS FROM THE EUROPEAN COMMUNITIES
Document: Recourse to Article 21.5 of the DSU by the European Communities Request for the Establishment of a Panel
Date: 17 September 2004
Document codes: WT/DS212/15
Complainant: EU
Respondent: U.S.
Third parties: Brazil, China, India, South Korea, Mexico
Dispute stage: Implementation & Compliance
Agreements cited: Art. 1, 10, 14, 21.1, 32.5  Subsidies and Countervailing Measures (SCM)Art. XVI:4  Agreement Establishing the World Trade OrganizationArt. 19.1, 19.3, 19.4, 21.2, 21.3  Subsidies and Countervailing Measures (SCM)Art. VI:3  GATT 1994

UNITED STATES – COUNTERVAILING MEASURES CONCERNING
CERTAIN PRODUCTS FROM THE EUROPEAN COMMUNITIES

Recourse to Article 21.5 of the DSU by the European Communities

Request for the Establishment of a Panel

 The following communication, dated 16 Sept ember 2004, from the delegation of the
European Communities to the Chairperson of the Di spute Settlement Body, is circulated pursuant to
Article 21.5 of the DSU.

 On 8 January 2003, the Dispute Settlement Body (the " DSB") adopted the Appellate Body
Report and the Panel Report, as modified by the Appellate Body, in the case WT/DS212 " United
States – Countervailing Measures concerning Ce rtain Products from the European Communities ".
The resulting DSB rulings included the recommendation that the United States brings its
administrative practice (the " same person " methodology) and the twelve individual determinations
found to be inconsistent with the Agreement on Subsidies and Countervailing Measures (the
"SCM Agreement") into conformity with its WTO obligations.

 On 27 January 2003, the United States informed the DSB that it intended to implement the
recommendations and rulings of the DSB in a manne r consistent with its WTO obligations. The
parties agreed under Article 21.3(b) of the DSU th at the United States had until 8 November 2003 to
implement the Appellate Body decision.

 In June 2003 the United States finalized a new " change-in-ownership" methodology,
published in the US Federal Register (" Notice of final modification of Agency practice under
Section 123 of the Uruguay Round Agreement" published on the US Federal Register on 23 June 2003
at 68 FR 120 p. 37125).

 The new methodology was then applied to the tw elve individual determinations brought by
the European Communities before th e WTO. The United States issued its final determinations on
these determinations on 7 November 2003 (published on the US Federal Register on
17 November 2003 at 68 FR 221 p. 64858). In th e DSB meeting of 7 November 2003, the United
States stated that it had fully complied with the DS B recommendations and rulings on this issue. The
EC did not agree.

 On 17 March 2004, the EC initiated the proce dures under Article 21.5 of the Understanding
on Rules and procedures Governing the Settlement of Disputes (DSU) by requesting the United States
to enter into consultations. The request was circulated in document WT/DS212/14 of 19 March 2004.
Consultations were held in videoconference on 24 May 2004. Consultations have allowed a better
understanding of respective positions but have failed to settle the dispute.

 Accordingly, " there is a disagreement as to the existence or consistency with a covered
agreement of measures taken to comply with the recommendations and rulings" of the DSB. Pursuant
to Article 6 and Article 21.5 of the DSU, Article 30 of the Agreement on Subsidies and
Countervailing Measures ( SCM Agreement), and Article XXIII of the General Agreement on Tariffs
and Trade 1994 (GATT 1994), the EC hereby requests the establishment of a panel.

 In particular, the EC claims and requests the Panel to find the following:

1. That in the sunset review Certain Corrosion-Resistant Carbon Steel Flat Products from
France (C-427-810) (Case No. 9), the United States failed to properly examine the existence,
continuation or likelihood of recurrence of subsid ization. In particular, with regard to the
privatization concerned, it improperly analysed whether the price for employees and retirees'
shares constituted a subsidy or that it led to any continuation of a countervailable subsidy
1.
This is inconsistent with Articles 10, 14, 19.4, 21.1and 21.3 of the SCM Agreement and
Article VI: 3 of GATT 1994.

2. That in the following sunset reviews:

• Cut-to-Length Carbon Steel Plate from United Kingdom (C–412–815) (Case No. 8)2;

• Cut-to-Length Carbon Steel Plate from Spain (C–469–804) (Case No. 11)3,
 The United States failed to properly determine wh ether, in these cases, there was continuation
or recurrence of subsidization and injury, because it did not examine the nature of the
privatizations in question and their impact on th e continuation of the alleged subsidization.
This is inconsistent with Articles 10, 14, 19.4, 21.1, and 21.3 of the SCM Agreement and
Article VI:3 of GATT 1994.

 The European Communities continues to reserve its rights in respect of all other aspects of the
United States' purported compliance with its obligati ons in this case. In particular, the European
Communities reserves its right to challenge the re vised methodology in the light of the eventual
outcome of a number of court challenges seeking to overturn it.

 The EC requests that the Panel be established w ith the standard terms of reference set out in
Article 7 of the DSU.

Note: this memorandum and the other listed below are available at the US Department of Commerce
site at http://ia.ita.doc.gov/download/section129/section129-index.html.
2 See unpublished memorandum of 24 October 2003.
3 See unpublished memorandum of 24 October 2003.