Case: United States Sunset Reviews of Anti-Dumping Measures on Oil Country Tubular Goods from Argentina (AB-2004-4)
Outcome: discussed
respondents argued that the Appellate Body of the World Trade Organisation had rejected Siam's construction of the relevant test on a review as requiring the Minister to be satisfied positively that, in the absence of measures, there would be dumping and that the dumping was causing or had caused material injury or that such injury was threatened in United States Sunset Reviews of Anti-Dumping Measures on Oil Country Tubular Goods from Argentina (AB-2004-4) at [271]-[285]. The respondents argued that read fairly, the wrong test had not been applied and that, in terms, Customs had applied the correct test in its statement (quoted above). "Customs interprets the test for revocation as whether, in the hypothetical situation of measures not being in place, there would now be grounds to impose the measures. In other words, if the measures were removed, is it likely that the exporter or exporters would cause material injury to the Australian industry?" The respondents also argued that because a notice is intended to remain in force for five years pursuant to s 269TM(1), it would not be appropriate to construe the power to make a declaration on a review as turning merely on the absence of the material injury or dumping, since, in the proceeding 12 months, exporters may have been inhibited in their behaviour or taken action to remove the appearance of the threat. In Oil Country Tubular Goods (AB-2004-4) at [177], [276]-[285] the WTO Appellate Body analysed the differing processes applicable in the initial decision to impose measures and the issues involved, at that stage, in determining whether there was an injury (including a threatened injury) under Art 3 and the subsequent decision in a "sunset review" to continue measures at the end of the initial five year period contemplated in Art 11.3 and in ss 269TM(1) and Div 6A of Pt XVB (Siam's related case involves a "sunset review" Siam Polyethylene Co Ltd v Minister of State for Home Affairs (No 2) [2009] FCA 838). The WTO Appellate Body concluded that in a sunset review Art 11.3 did not require that injury and likelihood of injury be determined again in accordance with Art 3. It found that for the purpose of determining that there was a likelihood of injury on a review, a decision-maker did not have to undertake all of the analyses required by Art 3 in order for the decision-maker to have a "sufficient factual basis" to arrive at a "reasoned conclusion" permitting a decision to continue measures at the end of the five year period: Oil Country Tubular Goods (AB-2004-4) at [280]-[283]. The WTO Appellate Body continued: "284 This is not to say, however, that in a sunset review determination, an investigating authority is never required to examine any of the factors listed in the paragraphs of Article 3. Certain of the analyses mandated by Article 3 and necessarily relevant in an original investigation may prove to be probative, or possibly even required, in order for an investigating authority in a sunset review to arrive at a "reasoned conclusion". In this respect, we are of the view that the fundamental requirement of Article 3.1 that an injury determination be based on "positive evidence" and an "objective examination" would be equally relevant to likelihood determinations under Article 11.3 . It seems to us that factors such as the volume, price effects, and the impact on the domestic industry of dumped imports, taking into account the conditions of competition, may be relevant to varying degrees in a given likelihood-of-injury determination. An investigating authority may also, in its own judgement, consider other factors contained in Article 3 when making a likelihood-of-injury determination. But the necessity of conducting such an analysis in a given case results from the requirement imposed by Article 11.3 &#8212;not Article 3&#8212;that a likelihood-of-injury determination rest on a "sufficient factual basis" that allows the agency to draw "reasoned and adequate conclusions"." (emphasis added) The WTO Appellate Body decided that it is necessary for a decision-maker, on a review under Art 11.3 of the implementation agreement, to make a determination concerning injury (i.e. whether injury is being, has been or is threatened to be caused) based on positive evidence and on an objective examination of the same nature as Art 3.1 required: Oil Country Tubular Goods (AB-2004-4) at [284] see too at [177]-[181] and the WTO Appellate Body decision in United States Sunset Review of Anti-Dumping Duties on Corrosion-Resistant Carbon Steel Flat Products from Japan (AB-2003-5) at [110]-[113]. Although those decisions concerned a sunset review, they were based on a consideration of Art 11 as a whole, that being the article governing all reviews. Divisions 5 and 6A of Pt XVB the Act express the Parliament's manner of giving effect to the review processes contemplated by Art 11 of the implementation agreement. Of course, the nature of the inquiry on a sunset review under s 269ZHB(1) in Div 6A can be affected by the more extensive time frame of at least nine months in which it may occur as compared with the more limited period of 110 or 155 days for a review under s 269ZC(7)(c) Div 5 of Pt XVB. The WTO Appellate Body decisions recognised that in a review, no single prescriptive test or methodology necessarily would apply. The considerations in each review will need to address the facts and circumstances of the particular anti-dumping measures that are in place in the context of the current market and other factors: Oil Country Tubular Goods (AB-2004-4) at [283]-[294]; US Corrosion Resistant Steel (AB-2003-5) at [113]-[115]. Nonetheless, Art 11.1 identifies the key issue in a review as being the necessity to impose the anti-dumping duty "... to counteract dumping which is causing injury" (in the sense of actual or threatened injury). Here, the only injury that could be under examination (given the respondents' admission that in the review period there was no evidence or other material before them that any injury to Qenos was caused by Siam's exports) must have been the threat of future injury that could be based on the likelihood of a recurrence of past injury: see too the WTO panel decision in DRAMS (99-0256) at [6.28]. As the WTO Appellate Body concluded in Oil Country Tubular Goods (AB-2004-4) at [284], a determination of injury on a review requires positive evidence and an objective examination. Here, Report 134 made no finding of any actual or threatened injury caused or likely to be caused by Siam's dumping. Instead, it simply asserted that on the available evidence the CEO could not be satisfied that dumping by Siam would not cause material injury if the measures were revoked. These concepts are reflected in ss 269TG(2)(b) and 269TAE(2A) and (2B) and in the WTO Appellate Body's analysis of the interaction of the review provisions in Art 11 with the initial imposition provisions in Art 3: Oil Country Tubular Goods (AB-22004-4) at [284] and especially at [180] where they said: "The plain meaning of the terms "review" and "determine" in Article 11.3, therefore, compel an investigating authority in a sunset review to undertake an examination, on the basis of positive evidence, of the likelihood of continuation or recurrence of dumping and injury. In drawing conclusions from that examination, the investigating authority must arrive at a reasoned determination resting on a sufficient factual basis; it may not rely on assumptions or conjecture." The CEO and the Minister had to consider whether any material injury to Qenos had been, or was being caused, or threatened by the dumping in determining whether to declare that s 8 of the Dumping Duty Act applied to Siam's exports of the product pursuant to the power to issue a notice under s 269TG(2), or vary an existing declaration under s 269ZDB. Because the three factors are necessary to be considered, dumping, injury and causation, the latter two cannot be presupposed merely by establishing the existence of the practice of dumping. Indeed, s 269TAE(2A) prohibits such presupposition. And, Customs identified the very difficulty which this process of presupposition entailed. It noted that Qenos had performed strongly in a market where some dumping was observed but the volume of dumped goods was small relative to both total imports (bearing in mind that Qenos had been found by Customs to have had a larger market share than all of the imports combined).