c) Rebuttal Arguments Made by Korea

1.545 Korea makes the following arguments in rebuttal to the United States' responses:

1.546 Article I:1 of the General Agreement requires that: "any advantage, favour, privilege or immunity"; with respect, inter alia, to rules and formalities imposed on or in connection with importation or the method of levying customs duties and charges imposed on or in connection with importation; granted by a WTO Member to any product originating in any other country; shall be accorded immediately and unconditionally to the like product originating in all other WTO Member countries.

1.547 The United States does not challenge (presumably because it recognizes that it cannot do so) the facts that:

1.548 The United States' only response is that "the United States applies the same statutory and regulatory provisions with regard to the issue of revocation in every case" and that "each anti-dumping proceeding is unique and the DOC must base each decision on the facts before it."⁴⁰⁸

1.549 First, the facts that the same US regulation (section 353.25(a)(2)) ostensibly controls in all determinations regarding whether to revoke and that this regulation lists three criteria, including the "no likelihood/not likely" criterion, are not dispositive. The Appellate Body in the EC Bananas case, citing with approval the panel decision in Beef from Canada, declared that Article I of the General Agreement condemns government actions that have the effect of discriminating against certain imported products.

1.550 That is exactly what happened here. The United States may not have engaged in de jure discrimination against Korean DRAMs, because the DOC uses Section 353.25(a)(2) in making its determination of whether to revoke in all cases. The shifting of the standard--not its literal text--is what is at issue here. Conditioning revocation for the Korean Respondents upon proof of the "no likelihood/not likely" criterion, while automatically concluding in other cases that this criterion was satisfied where there had been three consecutive determinations of no or de minimis dumping margins and certification of no future dumping by Respondent companies, constitutes de facto discrimination. The application of less stringent criteria and procedures in these cases constitutes an "advantage" that was not afforded in the DRAMs from Korea case. To be consistent with its obligations under Article I of the General Agreement, the United States should have substantively analyzed the "no likelihood/not likely" criterion in all cases, or in none. Arbitrarily conducting a substantive analysis in DRAMs from Korea, while not doing so in other cases, is a de facto violation of the most-favoured-nation principle.

1.551 Second, the United States' assertion that in all cases the DOC bases its revocation decision on the facts on the record is false. The reality is that in the vast majority of cases the DOC automatically presumes satisfaction of the "no likelihood/not likely" criterion when the two primary criteria (no dumping for three reviews and agreement to reinstatement) are satisfied. The only instance in which it does not do so is where the US petitioner chooses to allege that the "no likelihood/not likely" criterion is not satisfied. In these instances, the DOC does not require the US petitioner to prove its allegations; rather, it requires the Respondent companies to prove to the satisfaction of the Secretary (whose decision is not based on any objective criteria) that there is "no likelihood" that dumping will resume (or that the resumption of dumping is "not likely").

1.552 The United States explicitly admits this where it declares that, except where the US petitioner⁴⁰⁹ raises concerns, there is "a de facto presumption that if a Respondent has not dumped within the prior three-year period, it is not likely to resume dumping in the future."

1.553 Thus, the US assertion that different outcomes in its revocation cases are based on different facts boils down to an admission that different outcomes are based on the application of a different standard when the US petitioner so demands. The Panel should reject this attempt by the United States to shield itself from Article I's requirement of non-discriminatory application of revocation determinations.

d) Rebuttal Response by the United States

1.554 The following are the United States' rebuttal arguments in response to Korea's claim:

1.555 Korea argues that the United States has violated its obligations under Article I of GATT 1994 by not according most-favored-nation treatment in its revocation decisions. Korea bases its Article I arguments upon its erroneous assertion that the DOC inconsistently applies the "not likely" criterion in its revocation decisions, thus according favorable treatment in those cases that do not consider this criterion. Korea's arguments lack merit and should be rejected by the Panel.

1.556 The United States has established that it applies the same statutory and regulatory provisions with regard to the issue of revocation in every case. As such, the same three criteria set forth in section 353.25(a)(2) of the DOC's regulations, including the "not likely" criterion, are applied in each case subject to the regulation. While the three criteria in section 353.25(a)(2) are independently applied in every case, satisfaction of two of the DOC's criteria is relevant to the consideration of whether the "not likely" criterion has been satisfied. When additional evidence relating to the "not likely" criterion is available, the DOC reviews that evidence. Thus, the evidence on the record, not the DOC's whim, will dictate whether the three criteria contained in section 353.25(a)(2) are satisfied. This approach does not constitute de facto or de jure discrimination, nor does it accord an advantage to any party. As such, the United States has complied with its obligations under Article I.

2. Korea Submitted an Effective Data Collection Proposal

a) Claim Raised by Korea

1.557 Korea claims that the refusal of the United States to give Korea the opportunity to negotiate a Data Collection Proposal despite doing so in like cases in the past constitutes a violation of Articles I and X:3 of GATT 1994. The following are Korea's arguments in support of that claim:

1.558 As part of their express, binding commitment not to sell at less than fair value (normal value) in the future, the Korean Respondents agreed to participate in a data collection program (DCP) that the Government of Korea had proposed to the United States. This agreement is noted in the DOC's Notice of Determination Not to Revoke.⁴¹⁰ The DOC rejected the proposed agreement, based on Micron's repeated opposition to it.⁴¹¹ In the Final Determination, the DOC noted that the DCP originally was proposed prior to the deadline for submitting new information, but then seems to say that the proposal came too late to be considered.⁴¹² Also, the DOC stated that the proposal was "precatory in nature"; presumably, this means that the program was not currently in place. (It could not be, because the United States refused to negotiate it) This part of the Final Determination, in particular, demonstrates the flaws of the DOC's "analysis"⁴¹³

1.559 In a prior anti-dumping proceeding involving semiconductors from Japan, the United States terminated its suspension agreement on 256k and above DRAMs from Japan in return for an agreement similar to that offered by both the Government of Korea and Respondents--an agreement to ensure that there would be no further dumping of the products.

1.560 In this way the United States provided an advantage to Japan with respect to its semiconductor imports concerning a rule or formality applicable to anti-dumping duties (or a method of levying such duties) that it refused to provide to Korea with respect to its semiconductor imports. The failure to grant this advantage - the opportunity to negotiate and implement a data collection system in lieu of the imposition of anti-dumping duties - to Korea constitutes de facto discrimination in contravention of the United States' obligations under Article I.

1.561 The US conduct also violated Article X. Paragraph 3(a) of Article X requires a Member to administer its laws, regulations, decisions and rulings in a "uniform, impartial and reasonable manner." By refusing Korea's DCP and maintaining the duties, even though in another similar case the DOC accepted such a proposal, the DOC violated Article X.

b) Response by the United States

1.562 The following are the United States' arguments in response to Korea's claim:

1.563 Korea's argument that the United States violated its obligations under Article I because the DOC did not accept a data collection program (DCP) proposed by Korea is groundless. The only support Korea musters for this argument is that the United States engaged in another data collection program in another anti-dumping proceeding. Once again, Korea's arguments do nothing more than point to the fact that each anti-dumping proceeding is unique and the DOC must base each decision on the facts before it. Merely noting different outcomes in two different cases is inadequate to sustain an argument under Article I. Therefore, the United States did not violate Article I of GATT 1994 in its Final Results Third Review.

1.564 Korea argues that the United States violated Article X:3(a) by refusing Korea's DCP after having accepted such a proposal in "another similar case." For the same reasons that the United States did not violate Article X:3(a) by revoking anti-dumping orders in allegedly "similar" cases, the United States did not violate Article X:3(a) with regard to the rejection of Korea's DCP proposal. Certainly, the factual records and procedural history of each case were distinct and, thus, will lead to different results. However, different results based on different facts does not constitute an Article X:3(a) violation

c) Rebuttal Arguments Made by Korea

1.565 Korea makes the following arguments in rebuttal to the United States' responses:

1.566 In providing the opportunity to negotiate and then accepting a DCP from Japan in 256K and Above DRAMs from Japan, but refusing to extend as favorable treatment to Korea, the United States failed to grant an "advantage" to Korea that it had granted to Japan. This failure to grant the opportunity to negotiate and implement a DCP in lieu of the imposition of anti-dumping duties constitutes de facto discrimination in contravention of the United States' obligations under Article I of the General Agreement.

d) Rebuttal Response by the United States

1.567 The following are the United States' rebuttal arguments in response to Korea's claim:

1.568 Korea's additional argument that the United States has violated its obligations under Article I because the DOC did not accept the DCP proposed in the instant case is equally groundless. The paucity of support for this claim is evident in Korea's first submission because Korea has not provided any evidence to support a finding of disparate treatment. Most importantly, Korea has provided no evidence concerning the facts pertaining to the earlier proceeding on DRAMs from Japan.⁴¹⁴ Accordingly, Korea has failed to establish a critical component of a disparate treatment claim that the facts in the two proceedings are similar.

1.569 In its first submission Korea relies entirely on its 17 June 1997 letter containing its DCP proposal, and on the similar suggestions from Compaq and Respondents Hyundai and LG Semicon.⁴¹⁵ Those documents make clear that Korea proposed a data collection program modeled on the 19 December 1996 agreement between the US and Japanese semiconductor industries.⁴¹⁶ By definition, an industry-to-industry agreement does not depend on acceptance by the United States, which is not a party to the agreement. Furthermore, Korea's proposal did not make any reference to the circumstances or agreements involved in the termination of the earlier anti-dumping proceeding in 256K DRAMs from Japan. The Panel should not find an Article I violation based on the assertions offered by Korea.

1.570 In any case even if the Panel deem Korea's bare assertions sufficient to satisfy its burden of presenting a prima facie case of a violation of Article I, publicly available information concerning the earlier investigation demonstrates that the circumstances of the two proceedings are fundamentally dissimilar. The earlier anti-dumping investigation concerning 256K DRAMs from Japan was suspended in August 1986 pursuant to a statutory suspension agreement (undertaking) concluded in connection with the 1986 US-Japan Semiconductor Agreement.⁴¹⁷ As part of this agreement, the Japanese semiconductor companies undertook to provide a range of cost and pricing data to the DOC on a quarterly basis and to revise their prices to eliminate dumping.⁴¹⁸

1.571 In 1991, when the 1986 agreement came up for renewal, the DRAM anti-dumping proceeding and related price undertaking were terminated with the express support of the US semiconductor industry.⁴¹⁹ At the same time, the data collection procedures were extended, with the proviso that data would be made available to the DOC only upon initiation of a new anti-dumping investigation. In 1996, the US-Japan Semiconductor Agreement was modified further. This time, the provisions regarding data collection took the form of an industry-to-industry agreement.⁴²⁰ It was this formulation of the DCP which was suggested as the basis for an arrangement in the instant case. ⁴²¹

1.572 This brief review of the circumstances underlying the US-Japan data collection program as it evolved out of the 256K DRAMs from Japan investigation reveals the substantial differences between that case and the case before this Panel. First, the 1996 US-Japan industry-to-industry data collection agreement, which was identified as the model for Korea's proposal, involved neither acceptance by the United States government, which was not a party to the agreement, nor any action by the United States involving an active anti-dumping proceeding. Second, the DOC's 1991 termination of the suspension agreement in the 256K DRAMs from Japan case, the central element in Korea's disparate treatment claim, was predicated upon receipt of the express support of the domestic industry, which thereby indicated that it no longer had an interest in the continuation of the suspension agreement. In the present case, there is an outstanding anti-dumping order, not a suspension agreement, and, as Korea acknowledges, the domestic industry has opposed termination of the order.

1.573 The facts underlying the 256K DRAMs from Japan case demonstrate that Korea's claim under Article I is based on mere assertion of a violation. While the results in the two cases differed, the treatment of Respondents and the application of the DOC's regulations in the two cases was not such that an advantage was provided in 256K DRAMs from Japan that was not accorded to Respondents in the Final Results Third Review. Therefore, the Panel should reject Korea's claims under Article I.

3. Variance of the "No Likelihood/Not Likely" Criterion and the Time-Period Selected

a) Claim Raised by Korea

1.574 Korea claims that by varying the "no likelihood/not likely" criterion and the time-period selected for analyzing it from case to case the United States has Contravened its Obligations under Article X:3(a) of GATT 1994. The Following are Korea's arguments in support of this claim:

1.575 Despite its repeated references to Brass Sheet and Strip,⁴²² the DOC admits that this supposed source of criteria does not in fact specify the criteria that the DOC will use in its revocation decision, and indeed it does not necessarily specify the range of factors that Commerce may use. Thus, we come back full circle--the DOC believes it has complete discretion to choose the criteria it wishes to consider determinative in each specific case. The criteria the DOC uses will vary from case to case. They are not uniform or impartial. Therefore, the United States is in breach of its transparency and due process obligations under X:3(a) of the General Agreement

1.576 Moreover, given the absence of objective criteria and the resulting unfettered discretion to select any period it desires, the United States is not administering its law in a uniform, impartial and reasonable manner, as required by Article X:3(a).

1.577 The period chosen by the United States illustrates the results of the administrative arbitrariness that Article X is meant to prevent. The administrative determination at issue in this dispute was published in the US Federal Register on 24 July 1997. At the time the determination was drafted, actual data were available for the first half of 1997 and credible predictive data were available for the remainder of the year. Yet, the DOC chose to base its "no likelihood/not likely" determination on events during calendar year 1996; and it did so despite acknowledging that market conditions in the DRAM industry had recovered in 1997.⁴²³ The DOC then accepted and rejected data in a biased fashion, to reach its conclusion that the "no likelihood/not likely" standard was not satisfied. Therefore, the period chosen by the United States was neither impartial nor reasonable, and the United States breached its obligations under Article X:3(a) of the General Agreement.

b) Response by the United States

1.578 The United States responds to Korea's claim with the following arguments:

1.579 Korea states that the United States violated Article X:3(a) because "[t]he criteria the DOC uses will vary from case to case." The United States addressed this argument in the context of its discussion of Article X:1. As the United States does not vary the criteria relevant to a revocation decision from case to case, the United States has not violated Article X:3(a).

1.580 Korea states that "the period chosen by the United States was neither impartial nor reasonable, and the United States breached its obligations under Article X:3(a) of the General Agreement." The DOC determined the relevant period in which to consider the likelihood issue on the basis of the evidence on the record. The fact that different periods of time may be examined in different cases is a result of the existence of different factual records. Once again, a different result based on different facts does not constitute an Article X:3(a) violation.

To continue with Rejection and Acceptance of Data

⁴¹¹ Id. at 39811.

⁴¹² Id.

⁴¹³ Id.

⁴¹⁴ Anti-dumping; Dynamic Random Access Memory Semiconductors of 256 Kilobits and Above from Japan; Suspension of Investigation and Amendment of Preliminary Determination, 51 Fed. Reg. 28396 (7 August 1986) (hereinafter 256K DRAMs from Japan ) (Ex. USA-89).

⁴¹⁵ Case Brief of Compaq, 18 April 1997 at 9-10 (Ex. USA-90), Letter from Doug Young Joo, Commercial Counselor, Embassy of the Republic of Korea, 17 June 1997 (hereinafter Korea Letter of 17 June 1997) (Ex. USA-91), and Letter of Michael P. House (counsel to LG Semicon) and Lawrence R. Walders (counsel to Hyundai), 27 June 1997 at 2-3 (Ex. USA-92).

⁴¹⁶ See Korea Letter of 17 June 1997 ("Compaq pointed out that the December 19, 1996 agreement between the US Semiconductor Industry Association (SIA) and the Electronic Industries Association of Japan (EIAJ) could provide an appropriate model for resolving the Korean DRAM case. We agree with that suggestion.") (Ex. USA-91).

⁴¹⁷ See 256K DRAMs from Japan, 51 Fed. Reg. 28396 (7 Aug. 1986) (Ex. USA-89). The US-Japan Semiconductor Agreement also involved market-access commitments in settlement of an investigation under section 301 of the Trade Act of 1974. Presidential Memorandum of 31 July 1986, Determination Under Section 301 of the Trade Act of 1974, 51 Fed. Reg. 27811 (4 Aug. 1986) (Ex. USA-93).

⁴¹⁸ Id., 51 Fed. Reg. at 28398-99 (7 Aug. 1986) (Ex. USA-89). The DOC's notice announcing the agreement stated as follows:

Id., 51 Fed. Reg. at 28398 (Ex. USA-89).

⁴¹⁹ Dynamic Random Access Memory Semiconductors of 256 Kilobits and Above from Japan; Termination of Anti-dumping Duty Investigation, 56 Fed. Reg. 37522, 37523 (7 August 1991) (Ex. USA-94).

⁴²⁰ See Office of the US Trade Representative, Press Release 96-65, US and Japan Reach Semiconductor Accord, 2 August 1996 ( The heart of the new agreement is an industry-to-industry accord which will provide a broad range of activities across industry as well as serving as a clearinghouse for the collection and analysis of data. The new agreement retains a role for government in reviewing a wide range of qualitative and quantitative data, including market share ) (Ex. USA-95).

⁴²¹ See Korea Letter of 17 June 1997.

⁴²² Brass Sheet and Strip from Germany, 61 Fed. Reg. 49727 (23 September 1996) (Ex. ROK-36).

⁴²³ 62 Fed. Reg. 39809, 39817 (24 July 1997) (Ex. ROK-3). Also, the DOC rejected the Flamm study because, according to the DOC, the study was overly optimistic. But, elsewhere, the DOC itself acknowledged that market conditions improved, thus confirming the accuracy of Dr. Flamm's assumptions.