The Un-Likelihood of Recurrence of Injury: Korea- SSR of Anti-Dumping Duties on Stainless Steel Bars
On 30 September 2020, a Panel Report was circulated as “Korea — Sunset Review of Anti-Dumping Duties on Stainless Steel Bars” (DS553). Japan had filed a complaint on the following grounds:
The Korean Investigative Authority (“KIA”)’s determination that the expiry of anti-dumping duties would likely lead to a recurrence of injury is inconsistent with Article 11.3 of the Anti-Dumping Agreement as it did not rest on sufficient factual basis, reasoned and adequate conclusions.
KIA’s recourse to the ISSF data to determine production capacity of the industry in Japan instead of the data submitted by the three Japanese exporters is inconsistent with Article 11.4, Article 6.8, and Annex II of the Anti-Dumping Agreement.
The KIA had acted inconsistently with Article 11.3 and Article 6.5 of the Anti-Dumping Agreement:
With respect to its treatment of information provided by the applicants as confidential information without requiring good cause shown.
As it also failed to specify “on what basis” confidential treatment was provided.
Q. What is the legal standard under Article 11.3 of the Anti-Dumping Agreement?
Under Article 11.3 of the Anti-Dumping Agreement, the causal link between the removal of the duties and the likelihood of recurrence/continuation of dumping is the key factor to be examined. While Article 11.3 does not prescribe any methodology to be followed to make such an analysis, certain principles are established and undisputed. The investigating authority is bound to play an “active rather than a passive decision-making role.” Further, the investigating authority must act with an "appropriate degree of diligence" in arriving at a "reasoned and adequate explanation" for the likelihood-of-injury determination.
Q. When does the failure to perform an ‘unbiased and objective’ evaluation result in the violation of Article 11.3 of the Anti-Dumping Agreement?
‘Objectivity’ of an authority’s assessment could be called into question if:
1. There is a failure to address a directly relevant and substantiated point; or
2. The authority adopts one sides argument and evidence without addressing the other side’s argument and evidence; or
3. Meaningful inconsistencies are present in the authority’s own reasoning.
Q. What happened in the dispute?
One of KIA’s central findings while examining the causal link between the removal of duties and the likelihood of recurrence of material injury to the domestic industry was that once the anti-dumping duties are removed, it is likely that were will be a deep fall in the price of the dumped imports. Such a fall in the price of the imports is bound to weaken the price competitiveness of the like products sold by the domestic industry.
The Panel applied the standard as described above to Japan’s challenge of KIA’s intermediate findings in three parts:
“A drop in the price of dumped imports” was central to the final conclusion. Thus, in view of the structure and flow of the KIA's findings that led to the likelihood-of-injury determination, the panel considered that the KIA's failure to undertake an "unbiased and objective" evaluation of the facts on the consequences of the drop in Japanese prices invalidates this determination and gives rise to a violation of Article 11.3 of the Anti-Dumping Agreement.
Q. What were the other issues?