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This dispute concerned anti-dumping measures imposed by the U.S. on oil country tubular goods (OCTG) imported from Korea following an investigation by the U.S. Department of Commerce (USDOC), as well as the WTO-consistency of certain provisions of U.S. anti-dumping law.

In making its findings, with respect to the anti-dumping measures on OCTG, the panel limited its review to the original determination of the USDOC, finding a new determination of the USDOC in this regard, which was challenged by Korea, but issued after panel establishment, to be outside its terms of reference. The panel also found aspects of several claims made by Korea to be outside its terms of reference, and rejected them.

WTO-consistency of U.S. laws on normal value calculation

Korea claimed that U.S. domestic regulation (viability test), which prohibited the USDOC from using third-country market sales as a basis for determining normal value unless certain conditions were met, was “as such” inconsistent with Article 2.2 of the Anti-Dumping Agreement. Korea also claimed that the USDOC’s application of the viability test in the OCTG investigation was inconsistent with Article 2.2 of the Anti-Dumping Agreement. The panel rejected Korea’s claims, finding that Article 2.2 does not preclude an investigating authority from establishing its own criteria for choosing between the use of third-country sales and constructed normal value for the determination of normal value.

Profit determination

Korea claimed that the USDOC’s failure to use actual data of the Korean respondents to determine their constructed value (CV) profit rate, even though their actual home market and third-country market profit data was available on the record of the investigation, was inconsistent with the chapeau of Article 2.2.2 of the Anti-Dumping Agreement. The panel upheld Korea’s claim that the USDOC failed to determine CV profit using the respondents’ actual data pertaining to home market sales, finding that the USDOC had no basis for not using data pertaining to those sales as a basis for determining CV profit. Having concluded that the USDOC had no basis to reject the actual data pertaining to domestic sales of the like product, the Panel did not find it necessary to resolve the question whether the USDOC should have determined CV profit on the basis of the profit derived by the Korean respondents from third-country markets in order to comply with the chapeau of Article 2.2.2 and, therefore, exercised judicial economy on that claim.

Korea claimed that the USDOC’s reliance on an impermissibly narrow definition of the “same general category of products” in concluding that it could not determine CV profit under Article 2.2.2(i), and in concluding that it could not calculate the profit cap required by Article 2.2.2(iii), was inconsistent with Articles 2.2.2(i) and (iii) of the Anti-Dumping Agreement. The panel upheld Korea’s claim, finding that the USDOC defined the same general category of products more narrowly than the like product by excluding from that definition, OCTG not used for down hole applications, which was part of the like product as defined by the USDOC. The USDOC, therefore, had no proper basis for its conclusions that it could not determine CV profit under Article 2.2.2(i) and calculate the profit cap required by Article 2.2.2(iii).

Construction of export price

Korea claimed that the USDOC acted inconsistently with Article 2.3 of the Anti-Dumping Agreement because it constructed the export price of an exporter, without properly considering whether the export price was unreliable because of association between the exporter and the importer or a third party.
The Panel found that Korea had not shown that the USDOC’s conclusions on association were improper, or that it had erred in considering evidence regarding the reliability of the export price.

Korea also claimed that the USDOC acted inconsistently with Articles 12.2.2 of the Anti-Dumping Agreement because it failed to give reason for the rejection of several relevant arguments made by the exporters in the underlying investigation. The panel rejected these claims, albeit on different grounds. With respect to certain claims, the panel found that Korea had failed to demonstrate a violation of Article 12.2.2 as the USDOC’s explanation made it clear how the arguments were rejected, whereas with respect to others, the Panel found that Korea had not shown why the concerned arguments were relevant, or had otherwise failed to make a prima facie case of violation.

Published in the December 2017 Edition of American Recycler News