WORLD TRADE
ORGANIZATIONWT/DS244/4
5 April 2002
(02-1902)
Original:  English
UNITED STATES – SUNSET REVIEW OF ANTI-DUMPING DUTIES
ON CORROSION-RESISTANT CARBON STEEL FLAT PRODUCTS
FROM JAPAN
Request for the Establishment of a Panel by Japan
The following communication, dated 4 April 2002, from the Permanent Mission of Japan to
the Chairman of the Dispute Settlement Body, is circulated pursuant to Article 6.2 of the DSU.
_______________
On 9 July 1993, the United States Department of Commerce ("DOC") concluded its
antidumping investigation on imports of Certai n Corrosion-Resistant Ca rbon Steel Flat Products
("Corrosion-Resistant Steel") from Japan and found that Japanese products were being sold in theUnited States at less than their fair value (i.e., dumped).
1  The United States International Trade
Commission ("ITC") on 9 August 1993, then, determ ined that imports of Corrosion-Resistant Steel
from Japan were causing material injury to the United States domestic industry.2  Following the ITC
injury determination, on 19 August 1993, DOC published its final antidumping duty order on
Corrosion-Resistant Steel from Japan establishing an initial dumping margin of 36.41 per cent
ad valorem3 for all exporters of the subject product.
On 1 September 1999, the DOC automatically initiated a "sunset" review of the definitive
antidumping duties on the Corrosion-Resistant Steel from Japan.4  The DOC preliminary results,
issued on 27 March 2000, found that revocation of th e order would result in continued dumping at the
original rate of 36.41 per cent.5  The DOC's final determination, published on 2 August 2000,
affirmed its preliminary determination.6  Finally, on 2 November 2000, the ITC determined that
revocation of the antidumping order would result in continued injury to the United States' domestic
industry.7
                                                     
1 See Final Determinations of Sales at Less Than Fair Valve:  Certain Hot-Rolled Carbon Steel Flat
Products, Certain Cold-Rolled Carbon Steel Flat Product s, and Certain Corrosion-Resistant Carbon Steel Flat
Products from Japan, 58 Fed. Reg. 37154 (9 July 1993).
2 See Certain Flat-Rolled Carbon Steel Products from Japan , USITC Pub. No. 2664, Inv. No.
731-TA-617, at 4 (Final) (August 1993).
3 See Antidumping Duty Orders:  Certain Corrosion-Resistant Carbon Steel Flat Products from Japan,
58 Fed. Reg. 44163 (19 Aug. 1993).
4 See Initiation of Five-Year ("Sunset") Reviews of Antidumping and Countervailing Duty Orders or
Investigations of Carbon Steel Plates and Flat Products, 64 Fed. Reg. 47767 (1 Sep. 1999).
5 See Corrosion-Resistant Carbon Steel Flat Produ cts From Japan; Preliminary Results of Sunset
Review of Antidumping Duty Order, 65 Fed. Reg. 16169 (27 March 2000).
6 See Corrosion-Resistant Carbon Steel Flat Products From Japan; Final Results of Full Sunset Review
of Antidumping Duty Order, 65 Fed. Reg. 47380 (2 August 2000).
7 See Certain Carbon Steel Products From Japan , USITC Pub. No. 3364, Inv. No. 731-TA-617
(Review) (2 Nov. 2000).WT/DS244/4
Page 2
Following these events, on 30 January 2002, Japan requested consultations with the United
States pursuant to Article 4 of the DSU, Article XXII:1 of the General Agreement on Tariffs and
Trade 1994 ("GATT 1994"), and Article 17.2 of the Agreement on Implementation of Article VI of
GATT 1994 ( the "AD Agreement"), regarding the final determinations of both the DOC and the ITCand the relevant provisions and procedures of the United States.
8  The consultations, which were held
in Geneva on 14 March 2002, enabled the parties to gain a better understanding of each other's
position, but unfortunately did not give rise to a mutually satisfactory solution.
The Government of Japan considers both (i) the United States' decision not to terminate the
imposition of the antidumping duties on the imports of Corrosion-Resistant Steel from Japan, and (ii)
the provisions, procedures and practices pertaining to the United States Tariff Act of 1930 ("the Act")on which the decision was based, to be inconsistent with the United States' obligations under
Articles VI and X of the GATT 1994, Articles 2, 3, 5, 6, 11, 12 and 18 of the AD Agreement, and
Article XVI:4 of the Marrakesh Agreement establishing the World Trade Organization (the "WTO
Agreement").  The Government of Japan would like a panel, which will be established in accordance
with Article 4.7 and Article 6 of the Understanding on Rules and Procedures Governing theSettlement of Disputes ("DSU"), to address the following specific claims:
1. Article 11.1 of the AD Agreement sets forth the overriding principle that antidumping duties
shall remain in force "only as long as and to the extent necessary" to counteract injurious
dumping.  Article 11.3 provides that antidumping duties must be terminated after five years,
unless the authorities determine that their expiry would be likely to lead to the continuation or
recurrence of dumping and injury.   In this context, Article 12 calls on the authorities to
satisfy themselves that sufficient evidence (as defined by Article 5) exists to justify an
initiation of the review before notifying the public of such initiation.  Notwithstanding these
provisions of the AD Agreement, Section 751(c)(1) and (2) of the Act and the DOCregulation 19 C.F.R. § 351.218(a) and (c)(1) mandate the DOC to automatically self-initiate
sunset reviews without sufficient evidence.  This initiation standard does not require sufficient
positive evidence that the above-mentioned provisions of the AD Agreement require to be
shown.  In this particular case, as in all others, the DOC automatically initiated the sunset
review without presenting a scintilla of evidence of the likelihood of continued or recurrent
dumping or injury.  Therefore, Section 751(c)(1) and (2) of the Act and the DOC regulation
19 C.F.R. § 351.218(a) and (c)(1), on the face and as applied in this case, are inconsistentwith Articles 5.6, 11.1, 11.3, 12.1, and 12.3 of the AD Agreement and Article X:3(a) of the
GATT 1994.
2. The US laws, regulations, procedures, practices and determinations regarding the "likelihood
of continuation or recurrence of dumping" are inconsistent, on the face, as a general practiceand as applied in this case, with the WTO obligations as follows:
(a) The DOC regulation 19 C.F.R. §351.222(i)(1)(ii) sets forth the "not likely" standard
to revoke an antidumping duty order.  In  addition, Sections II.A.3 and II.A.4 of the
DOC Sunset Policy Bulletin
9 provide irrefutable conditions where the DOC may find
no likelihood of continued or recurrent dumping.  In fact, to our knowledge, no single
case has ever met the "not likely" conditions set by Sunset Policy Bulletin to date.
The DOC regulation 19 C.F.R. § 351.222(i)(1)(ii) and Sections II.A.3 and II.A.4 of
the DOC's Sunset Policy Bulletin , on the face, as a general practice and as applied in
                                                     
8 That request was circulated in document WT/DS244/1, GL/508, G/ADP/D39/1.
9 Policies Regarding the Conduct of Five-year ("Sunset") Review of Antidumping and Countervailing
Duty Orders; Policy Bulletin, 63 Fed. Reg. 18871 (16 April 1998) (hereinafter "Sunset Policy Bulletin").WT/DS244/4
Page 3
this case, are inconsistent with the requirements of Article 11.3 of the AD Agreement
and Article X:3 of the GATT 1994.
(b) Both the Statement of Administrative Action at 890 and the Sunset Policy Bulletin at
Section II.A.3 set an irrefutable presumption that dumping is likely to continue wherethe import volume has declined or where dumping margins remain after issuance of
the order.  The "good cause" requirement in the DOC regulation 19 C.F.R. §
351.218(d) does not mitigate this defect because it impermissibly narrows the
administering authorities' ability to exam ine other evidences.  As such, no attempt
whatsoever is made to "determine" whether dumping is likely to continue or recur.
The United States' procedures and practice in this regard, both as a general practice
and as applied in this case, are inconsistent with the obligations of Article 11.3 of theAD Agreement and Article X:3 of the GATT 1994.
(c) The dumping margins that the DOC used in its sunset reviews,  including its
interpretation of the proper de minimis  standard in conducting its likelihood
analysis,
10 are inconsistent with the WTO obligations as follows:
(i) The DOC used the dumping margins cal culated in the original investigation
in 1993 to determine the likelihood of continuation or recurrence of dumping
in this sunset review.  These dumping margins were not calculated pursuant
to Article 2 of the AD Agreement.  The US policy and practice, both as ageneral practice and as applied in this case, are thus inconsistent with the
United States' obligations under Articles 2, 11.3 and 18.3 of the
AD Agreement and Article X:3 of the GATT 1994.
(ii) The DOC has a traditional practice of zeroing negative margins when
calculating dumping margins.  The DOC applied this practice in its
calculation of dumping margins in the original investigations and the
administrative reviews in this case.  The Appellate Body found this practice
of zeroing to be inconsistent with Article 2.4 of the AD Agreement in the EC
– Bed-Linen  case (WT/DS141).  The United States' general practice and its
application of the practice in this case are therefore inconsistent with
Article 2.4 (particularly 2.4.2) of the AD Agreement and Article X:3 of the
GATT 1994.
(iii) Notwithstanding the 2.0 per cent de minimis standard set forth in Article 5.8
of the AD Agreement, the DOC regulation 19 C.F.R. § 351.106(c)(1) and
Section II.A.5 of the Sunset Policy Bulletin  provide for a 0.5 per cent de
minimis  standard for sunset reviews.  In this case, had the DOC properly
applied the 2.0 per cent de minimis  standard provided in Article 5.8 of the
AD Agreement, the Japanese producers might have been exempt from the
continuation of antidumping duties.  Japan contends that the US de minimis
standard, on the face and as applied in this case, is inconsistent with theUnited States' obligations under Articles 5.8 and 11.3 of the AD Agreement
and Article X:3 of the GATT 1994.
(d) Both the Statement of Administrative Action  and Sunset Policy Bulletin  provide that
the DOC "will make its determination of likelihood on an order-wide basis."
11  The
US policy and practice, as a general practice and as applied in this case, are
                                                     
10 Id. at section II.A.5.
11 Id. at section II.A.2.WT/DS244/4
Page 4
inconsistent with Articles 6.10 (which provides the obligation to determine dumping
margins on an individual company basis) and 11.3 of the AD Agreement and
Article X:3 of the GATT 1994.
(e) The DOC requires Japanese respondents to  file all relevant evidence in their
"substantive response" within 30 days from the date of initiation.  The DOC refused
to accept and consider any other information submitted by a Japanese respondent in
this case.12  The DOC's refusal to accept and consider such information in this case
was inconsistent with Articles 6.1, 6.2 a nd 6.6 of the AD Agreement and Article X:3
of the GATT 1994.
(f) The DOC's approach to Article 11.3 determinations contradicts its approach to
Article 11.2 determinations pursuant to Sections 751(a) and (d) of the Act and the
DOC regulation 19 C.F.R. § 351.222(b) and (d).  Given that the language with regard
to determining the "likelihood of continuation or recurrence of dumping" is the same
in Article 11.2 as in Article 11.3, the US difference in approach, on the face, as a
general practice and as applied in this case, is inconsistent with Article X:3 of theGATT 1994.
3. The US procedures and determinations rega rding the "magnitude of the margin likely to
prevail", i.e., determinations of dumping margins to be reported to the ITC for the purpose of  its
injury analysis, are inconsistent  with the WTO obligations as follows:
(a) Both Section 752(c)(3) of the Act and Section II.B.1 of the Sunset Policy Bulletin
state that the DOC shall normally provide the ITC with dumping margins from the
original investigation.  The DOC applied this policy in this case without considering
any other factors.  The US policy and practice, as a general practice and as applied inthis case, are therefore inconsistent with the United States' obligations under Article
11.3 of AD Agreement and Article X:3 of the GATT 1994.
(b) The DOC's reporting of the pre-WTO-Agreement dumping margins to the ITC is, as a
general practice and as applied in this case, inconsistent with the United States'
obligations under Articles 2, 11.3 and 18.3 of AD Agreement and Article X:3 of the
GATT 1994 for the same reasons as discussed in Paragraph 2(c)(i) above.
(c) The DOC's application of its WTO-inconsistent practice of zeroing negative dumping
margins for the magnitude of dumping margins in the sunset review, as a general
practice and as applied in this case, is inconsistent with Article 2.4 (particularly 2.4.2)
of the AD Agreement and Article X:3(a) of the GATT 1994 for the same reasons asdiscussed in Paragraph 2(c)(i) above.
4. The ITC does not consider whether imports were negligible as defined in Article 5.8 of the
AD Agreement when determining whether to cumulate imports in a five-year "sunset" review.
In addition, the ITC, in this case, never examined whether imports were negligible andtherefore whether they should, or should not, be cumulated.   In light of footnote 9 of the AD
Agreement, the United States has acted inconsistently with Articles 3.3, 5.8, 11.3, 12.2 and
12.3 of the AD Agreement and Article X:3 of the GATT 1994.
                                                     
12 Nippon Steel Corporation ("NSC") provided information on that its 50 per cent-owned galvanizing
plant in Indiana achieved full production and that NSC has maintained a steady base of customers.WT/DS244/4
Page 5
5. As mentioned above, the US erroneously maintains the antidumping duty on the imports of
Corrosion-Resistant Steel from Japan.  In this regard, the US acts inconsistently with
Articles 11.1 and 11.3 of the AD Agreement.
6. As mentioned above, the US has not conducted the sunset review in a uniform, impartial and
reasonable manner.  In this regard, the US acts inconsistently with Article X:3(a) of the
GATT 1994.
7. Finally, by maintaining these inconsistent laws, regulations and administrative procedures
with its obligations under the AD Agreement and Article VI of GATT 1994, the United States
is in violation of Article XVI:4 of the WTO Agreement as well as Article 18.4 of the AD
Agreement.
Accordingly, pursuant to Article XXIII of the GATT 1994, Articles 4.7 and 6 of the DSU, as
well as Article 17 of the AD Agreement, the Government of Japan respectfully requests the
establishment of a panel.  To that end, I would be grateful if this request could be included in the
agenda for the next meeting of the Dispute Settlement Body on 17 April 2002.
__________