2 April 1993

I. INTRODUCTION

II. FACTUAL ASPECTS

III. MAIN ARGUMENTS

III.1 Findings Requested by the Parties

III.2 Consideration of the Transcript of the KTC's Voting Session

III.3 Alleged Use of a Presumption of "Import Substitution"

III.4 Basis for the Determination

III.5 Other Aspects of the Determination of Injury

IV. ARGUMENTS PRESENTED BY THIRD PARTIES

IV.1 Canada

IV.2 The European Communities

IV.3 Japan

V. FINDINGS

V.1 Introduction

V.2 Basis for the Review by the Panel of the KTC Injury Determination

V.3 Alleged Failure of the KTC to State the Basis of its Determination

V.4 Sufficiency of the KTC's Determination as a Basis for Affirmative Findings of Present Material Injury, Threat of Material Injury, or Material Retardation of the Establishment of an Industry

VI. CONCLUSIONS AND RECOMMENDATION

ANNEX 1 Documents ADP/72 and Add.1

ANNEX 2 Determination of the Korean Trade Commission, Decision No. 91-6, 24 April 1991

* English only

1. In a letter dated 21 June 1991, the United States requested consultations with Korea under Article 15:2 of the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade (hereinafter referred to as "the Agreement"), regarding the imposition of anti-dumping duties by Korea on imports of polyacetal resins ¹ from the United States. The two parties first consulted on this matter on 24 July 1991, and a second consultation meeting was held on 30 September 1991. The parties did not reach a mutually satisfactory solution. On 12 September 1991, i.e. prior to the second consultation meeting, the United States referred the matter to the Committee on Anti-Dumping Practices (hereinafter referred to as the "Committee") for conciliation under Article 15:3 of the Agreement (ADP/64 and Add.1). A special meeting of the Committee was held for this purpose on 4 October 1991 (ADP/M/34). The conciliation process did not lead to a resolution of this dispute and on 21 January 1992, the United States requested the establishment of a panel under Article 15:5 of the Agreement (ADP/72 and Add.1; see ANNEX 1).

2. At its meeting of 17 February 1992, the Committee agreed to establish a panel on the matter (ADP/M/36). The representatives of Canada, the European Communities and Japan reserved their rights to present their views to the panel.

3. On 29 April 1992, the Committee was informed by its Chairman in document ADP/76 that the terms of reference and composition of the Panel were as follows:

Terms of Reference:

Composition:

4. The Panel met with the parties on 10 July, 30 September and 1 October 1992. On 10 July 1992, the delegations of Canada, the European Communities and Japan appeared before the Panel and presented their views on the dispute. The Panel submitted its findings and conclusions to the parties to the dispute on 10 March 1992.

5. The dispute before the Panel concerned the imposition by Korea of an anti-dumping duty on imports of polyacetal resins (hereinafter referred to as "PAR") from the United States and Japan. This duty was imposed by Presidential Decree 13,467 (dated 14 September 1991), and the effective date of this Decree was 30 September 1991.

6. The following are the factual aspects of this dispute. ²

7. Until late 1988, the Korean market for PAR was served entirely by imports. Korea Engineering Plastics (hereinafter referred to as "KEP") ³ completed a 10,000 tons annual production facility in September 1988 and began producing PAR mainly for the domestic market. ⁴ In about a year, KEP increased production to nearly full capacity and its domestic market share for PAR increased from below 1 per cent in 1988 to 47.7 per cent in 1989, and to 60.8 per cent in first-quarter 1990. There was a concomitant decrease in the share of imports in the Korean PAR market, with the share of imports from three companies subject to the anti-dumping investigation (see below) falling from about 60 per cent in 1988, to about one-third in 1989, and then to about one-fifth in first-quarter of 1990. The prices of imported and domestically produced PAR declined in the Korean market during this time period.

8. In June 1990, KEP established another plant with an annual production capacity of 10,000 tons and thus increased its total annual production capacity to 20,000 tons.

9. On 8 May 1990, KEP filed an anti-dumping petition against two producers from the United States ⁵ and one producer from Japan ⁶ , alleging that these producers were exporting PAR at less than normal value to Korea and causing material injury to the domestic industry. The Government of Korea formally initiated an investigation on 25 August 1990. The period of investigation was from 1 January 1989 through 31 March 1990 ⁷ and the scope of the investigation was limited to middle viscosity, low viscosity and audio/video grade resins, thus excluding from the investigation high viscosity and special grade resins which were not manufactured by the domestic industry. On 20 February 1991, Korea's Office of Customs Administration found dumping margins ranging from 20.6 to 107.6 per cent for the three respondents. On 24 April 1991, the Korean Trade Commission (hereinafter referred to as "KTC") determined that "dumped imports of polyacetal resin of middle viscosity, low viscosity and audio/video grade (HSK, 3907-10-0000) from Asahi Chemical Industry Co. Ltd. of Japan, and E.I. du Pont de Nemours, Inc. and Hoechst Celanese Corp. of the United States, caused material injury to the domestic industry as set forth in Article 10-1 of the Customs Act." ⁸ On page 8 of the Determination, the KTC had concluded that "[h]aving examined various economic factors and indicators which are relevant to the evaluation of the domestic industry's condition, the Commission hereby determines that the domestic industry has suffered material injury, etc. as defined in Article 10-1 of the Customs Act." Article 10-1 of the Customs Act was as follows: "In cases where the importation of foreign goods for sale at a price lower than the normal value causes or threatens to cause material injury to a domestic industry or materially retards the establishment of a domestic industry (hereinafter in this Article referred to as "material injury, etc."), if deemed necessary to protect the domestic industry concerned, a duty may be imposed ... ".

10. On 30 September 1991, Korea's Ministry of Finance implemented a basic price system of relief under which anti-dumping duties were to be applied where PAR was imported at prices lower than certain specified prices. The anti-dumping duty order was due to expire on 3 October 1993, unless extended.

11. The main arguments of the United States were as follows: (a) the determination of injury by the KTC was inconsistent with Articles 3:1, 3:2, 3:3 and 3:4 because it was not based on positive evidence or an objective examination of the volume and price effects of subject imports, or of developments regarding certain other factors which could have justified a negative determination. This, according to the United States, was because the KTC had applied a presumption of "import substitution", i.e., the KTC had presumed that if a domestic producer was a new entrant in the market, it was "normal" for it to undercut the price of imports and to capture a large proportion of the domestic market within a short period of time; (b) the Determination had failed to specify the type of injury suffered by the domestic industry, i.e. there was no indication of whether the KTC had found material injury, threat of material injury, or material retardation. Thus it was impossible to discern the real basis for the injury determination, and the KTC's determination was therefore inconsistent with the requirements of Articles 3:4 and 8:5 of the Agreement; (c) the KTC's Determination did not provide an adequate basis for affirmative findings regarding material injury, threat of material injury or material retardation. Therefore, the United States argued that the determination of injury by the KTC was inconsistent with Articles 3:1, 3:2, 3:3, 3:4 and 3:6 of the Agreement; (d) the KTC had not conducted an objective examination also because it had considered certain factors when they tended to favour an affirmative finding of injury but not when they favoured a finding of no injury, thus violating Article 3:1; and, (e) the KTC had violated Article 3:4 by relying upon the injurious effects of factors other than dumped imports.

12. In reply, the main arguments of Korea were as follows: (a) the KTC had conducted an objective examination based on positive evidence of the requisite factors for causality, price effect, material injury, threat of injury and material retardation. The term "import substitution" in the Determination did not denote the use of any presumption or theory, but was only a description of the situation that sales by the newly established domestic industry had displaced imports in the domestic market. This was a normal occurrence whenever a new entrant started producing in a domestic market which had earlier been supplied entirely by imports. Thus, the KTC's determination was not inconsistent with Articles 3:1, 3:2, 3:3 and 3:4; (b) it was clear from the text of the Determination that all the three bases for injury, i.e. material injury, threat of material injury, and material retardation, had been found by the KTC in this case, and therefore, the KTC's determination was not inconsistent with the requirements under Articles 3:4 and 8:5; (c) the record evidence and the Determination showed that there was sufficient basis to find each of the three bases for injury, and thus, the determination of injury by the KTC was not inconsistent with Articles 3:1, 3:2, 3:3, 3:4 and 3:6 of the Agreement; (d) regarding the United States' complaint that the KTC's analysis of certain factors was not conducted in a consistent manner and hence was inconsistent with Article 3:1, Korea said that the United States' objection was essentially an argument that the KTC should have weighed certain factors differently compared to what it did. However, the Agreement provided discretion to the investigating authorities in this regard. The Panel's task was not to reweigh the importance of different factors, but to assess whether there was positive evidence to support the basis of the KTC's determination; and, (e) the KTC's determination of injury was not inconsistent with Article 3:4 of the Agreement because the Agreement required that imports be "a" cause of injury, and not the "only" or "main" cause of injury. The KTC had first found that there was injury to the domestic industry, and then found that imports had been "a" cause of this injury.

III.1 Findings Requested by the Parties

13. The United States requested the Panel to find that the KTC's Determination was not in conformity with the Agreement. The United States further requested the Panel to recommend to the Committee that the Committee request Korea to bring its law as applied into conformity with its obligations under the Agreement. Explaining its request, the United States said that in essence, it was requesting that the Panel confirm the violation or violations of the Agreement that had occurred in this case, and to recommend that Korea take steps to achieve compliance with the Agreement. However, the United States was not requesting that the Panel recommend the specific steps that Korea should take to achieve compliance with the Agreement. The United States believed that detailed and specific recommendations exceeded the appropriate role of a dispute settlement Panel convened under the Agreement. Because the violating Party should be permitted in the first instance to determine the appropriate steps to take to bring its laws and practices into compliance with the Agreement, the United States intended the term "law as applied" to have a broad, inclusive meaning potentially encompassing the administrative practices and procedures of the KTC (including the particular injury determination on PAR and the subsequent imposition of anti-dumping measures on imports of PAR), the applicable Korean administrative regulations, or even the Korean legislation.

14. The United States said that at present it was not aware of any Korean statute or administrative regulation that would mandate the type of violations of the Agreement that the United States had identified in these proceedings. Thus, it might be that Korea could come into conformity with the Agreement through action involving its administrative practices. Should the current information on this point prove incorrect, the United States expected Korea to take necessary action to amend the offending statute or regulation.

15. Korea requested the Panel to find that the KTC's Determination satisfied the requirements of the Agreement. Korea said that according to the United States, the law "as applied" by the KTC was inconsistent due to the application of an assumption of "import substitution". However, since no such assumption had been used, the request for relief was meaningless. Thus, the Panel need not order, and Korea need not implement, the relief which the United States requested because the problem which the United States sought to have remedied did not exist. Similarly, Korea could not correct any problem involving the weighing of evidence by four of the seven Commissioners. This would involve an impermissible effort to interfere with the discretion possessed under the Agreement by the investigating authorities.

III.2 Consideration of the Transcript of the KTC's Voting Session

16. To support the argument that the Determination had met the requirements under the Agreement, Korea submitted on 18 August 1992, an English translation of the transcript of the 49th meeting of the KTC (hereinafter referred to as the "transcript"). At this meeting, the different KTC Commissioners had given their individual views and findings in the case under review by the Panel. This transcript was first mentioned by Korea in a response provided on 24 July 1992 to a question by the Panel as to whether the KTC had found actual material injury, threat of material injury or material retardation of the establishment of an industry. In the transcript, the Commissioners were not identified by name.

17. The United States said that, in view of the requirements of Articles 8:5 and 3:4 of the Agreement, the transcript could not be used to assist Korea in meeting its obligations under the Agreement, and hence the Panel should not consider it in its examination of the matter in this case. Korea's reliance on the transcript before the Panel raised fundamental questions about the transparency of anti-dumping proceedings, the certainty of the investigating authorities' basis for taking anti-dumping measures, the ability of the exporting country to assess whether its rights under the Agreement had been violated, and the meaningfulness of dispute settlement procedures under the Agreement. It was also contrary to one of the fundamental goals of the Agreement mentioned in its preamble, namely "to provide for equitable and open procedures as the basis for a full examination of dumping cases."

18. The United States argued that the transcript was a post hoc attempt by Korea to supplement the Determination, and did not comport with Korea's obligations to provide public notice of its findings under Article 8:5 or to demonstrate that imports were causing injury under Article 3:4. Article 8:5 of the Agreement provided in relevant part that

19. The United States said that Article 8:5 required transparency of anti-dumping proceedings, and promoted fairness by limiting the reasons to those asserted at the time of the determination rather than permitting subsequent revelations purporting to justify the action. This provision gave the affected parties a "right-to-know" the official statement of reasons, and enabled the Government of the exporting country to assess whether its rights under the Agreement had been violated by the actions of the investigating authorities. Moreover, the notice of an action had to be given at a time reasonably close to when the action was taken. Korea had never mentioned the existence of the transcript until after the first hearing of the Panel, and as far as the United States was aware, that was the first time that the transcript, which was still considered by Korea to be a confidential document, had been made available to anyone outside the Korean Government. Throughout the consultations, conciliation, and the Panel proceedings till the first hearing of the Panel, Korea had maintained that the only document that set forth the KTC's official findings and conclusions in the investigation was the written Determination. This document, dated 24 April 1991, was unequivocally entitled "Determination of the Korean Trade Commission". The United States informed the Panel that during consultations, Korea had proffered to the United States a document entitled "The Government of Korea's Position", which had elaborated on the Determination in various respects. In order to clarify the status of that document, the United States had asked Korea to indicate whether Korea claimed that the position paper was a part of the official Determination. Korea confirmed that the position paper was not part of the official determination but simply prepared for purposes of consultations. Korea did not at that time indicate that documents other than the Determination might also form part of the KTC's explanation of its finding in this case. Moreover, even though the very issue of dispute settlement proceedings had been whether the Determination was in conformity with the Agreement, at no time did Korea ever indicate that a "transcript" might exist.

20. Regarding Article 3:4, the United States said that this provision required the investigating authorities to "demonstrate" that imports were causing injury within the meaning of the Agreement. Since this provision pertained to all the other obligations relating to the rendering of injury determinations, it was clear that the required demonstration had to be made at the time that the affirmative injury determination was rendered, rather than in submissions filed only when the determination was subsequently challenged. The "demonstration" requirement in Article 3:4 reinforced the Agreement's emphasis on the investigating authority stating publicly, for all to see, the basis for the determination.

21. Thus, the United States urged the Panel to disregard the transcript in its deliberations, for purposes of examining whether the affirmative finding satisfied the Agreement.

22. Korea argued that because the transcript was the most direct evidence of the deliberative process engaged in by each KTC Commissioner in this case, it was an essential and most important administrative record document bearing upon issues which this Panel had to resolve. According to Korea, the record of the investigation comprised all documents considered by the KTC and all other documents which were part of the investigation until the KTC reached its determination, i.e. everything from the petition to the written Determination. Korea also pointed out that the United States had not claimed that the transcript was not part of the administrative record.

23. Korea said that under its law, a transcript of the voting session had to be prepared in every KTC injury investigation. Thus, this transcript was both a routine part of the KTC's administrative record and a contemporaneous and reliable record of the reasons which each individual Commissioner had expressed as the basis for his vote. The fuller expression of these views had been later summarized in the KTC's published written Determination. Such a summarization could not modify or change the opinion that each Commissioner had expressed. There was nothing in the Agreement that prevented an investigating authority from conducting its internal deliberations in a confidential session; in fact, this allowed for more candid and complete discussion of the relevant issues. The public and the parties concerned were not injured in any way by this procedure because the written Determination contained an ample summary of the basis of the majority's decision. The transcript had been confidential in order not to disclose how the different individual KTC Commissioners had voted. The version of the transcript provided to the Panel was a public version of the document because it had suppressed the identities of the Commissioners. Korea had provided the transcript only because the United States had repeatedly challenged the truthfulness of Korea's assertion that the KTC had not used an import substitution theory. The transcript had been submitted to the Panel to assist in interpreting and to provide an understanding of the context in which the statements in the Determination were made. The only real issue before this Panel concerned the KTC's intent in using the word "import substitution" in its written determination. The transcript was useful in assisting the Panel in interpreting how these words were intended to be understood, and thus it assisted in interpreting the basis for the affirmative determination. Korea should not be penalized for providing more information concerning the basis for its determination than was normally provided to panels.

24. Korea said that there was nothing in the Agreement that prevented the Panel from considering the transcript in order to evaluate whether the KTC's determination had satisfied the requirements of Article 3. Confidential documents were part of the administrative record of an investigation and panels had the authority to review such confidential information in evaluating compliance with the Agreement, and in certain cases the review of confidential information formed an important part of a panel's inquiry. By ignoring confidential information which was nonetheless relevant and material for a panel's evaluation, the panel might reach incorrect results; no panel should be free to disregard a portion of the record. The United States had not claimed that panels lacked the authority to consider confidential information, nor that the Panel may not consider the entire record in evaluating whether or not the demonstration required under Article 3 had been made. The transcript was no more or no less relevant to resolving the issue of the required demonstration having been made than any other part of the record, and the United States had failed to explain why it should be treated any differently from the other confidential record document to which the United States did not object. In the situation under review, there was nothing inappropriate in using any materials which helped to shed light on the intentions of those who drafted the language at issue. If this Panel found it appropriate to disregard any part of an agency's administrative record bearing upon the final determination, it would seriously undermine the dispute resolution process and have extremely significant repercussions for all national investigating authorities as to how they would conduct and conclude their investigations in the future.

25. Korea said that this Panel proceeding would have taken an entirely different course if the KTC had done one of two simple things. First, it could have taken the transcript, deleted the names of the Commissioners, and issued it as its final written determination. Alternatively, it could have stated in the Determination that the transcript remarks should be deemed to be incorporated in the written Determination by reference to them. Either of these two simple options would have resulted in many, if not all, of the United States' challenges to the Determination not being raised. The question for the Panel was whether the KTC should be penalized, through the Panel's disregard of the transcript, for failing to take either of the two simple options, and deciding to attempt to combine the reasoning of all four Commissioners in a single integrated document.

26. Korea stated that the United States International Trade Commission (hereinafter referred to as "USITC") also followed the exact same transcription procedure. Even for the USITC, the transcript became part of the record of the investigation, and it could be reviewed by a United States court in considering whether the USITC determination had satisfied the applicable evidentiary test under United States law. Similarly, here, the Panel had to consider the transcript in evaluating whether the requirements of the Agreement had been met. If the Panel would ignore to do so, it would impermissibly obstruct Korea's right to show that the factors identified in Article 3 had been considered and that the required demonstration of material injury by reason of dumped imports had been made. Moreover, Korea said that the United States had earlier requested Korea to provide the administrative record, and now was arguing for a part of this record not to be considered by the Panel.

27. Korea said that it did not claim that the transcript constituted public notice under Article 8:5. Nor did Korea claim that the Panel should consider the transcript as being part of the Determination. Rather, the transcript assisted in showing that the KTC had considered all the relevant issues which were required to be considered under Article 3. It also showed that an objective examination had occurred and that no import substitution theory or presumption had been used. The fact that the transcript contained a fuller expression and the precise basis for the separate opinion of each Commissioner did not violate Article 8:5 because the basis of the affirmative determination was clear from the text of the Determination. Moreover, under the logic of the United States assertion that the public notice provision of Article 8:5 had been violated in this case, Article 8:5 would also be violated if a determination was based entirely on confidential information that could not be released. In that case too, the United States would say that parties could not understand all of the facts upon which the decision had been based.

28. Korea said that by arguing that the submission of the transcript violated Article 8:5 of the Agreement, the United States was attempting to obscure the sole issue before this Panel, namely whether positive evidence existed of injury and causation under Article 3 of the Agreement. The initial complaint of the United States, and its subsequent submissions to the Panel, only alleged that certain provisions under Article 3 had not been met. The United States' sole focus in this case had been on the failure of the KTC to conduct an objective evaluation and to rely on positive evidence. The United States had earlier never claimed that Article 8:5 was at issue. The terms of reference defined, and thus limited, the permissible scope of review by a Panel. The terms of reference presented to this Panel by the Chairman of the Committee on 29 April 1992 provided that the matter before it was defined in documents ADP/72 and Add.1. These documents, particularly ADP/72/Add.1, explicitly limited the basis for the United States' challenge of the KTC's final determination to Articles 3:1 to 3:3. This was reconfirmed in the United States' response to the Panel's questions of 10 July 1992 and in its first written submission. Nowhere in these documents had the United States contended that it was challenging the KTC's affirmative determination on the basis of the public notice requirement of Article 8:5, and the Panel must reject the United States' efforts to raise an entirely new issue.

29. Furthermore, Korea said that the Agreement did not limit an investigating authority's ability to demonstrate that it had considered all of the required factors, and to demonstrate that dumped imports had caused injury, to the text of the public notice which announces its determination. In particular, the "demonstration" requirement of Article 3:4 did not require an investigating authority to "demonstrate" in the published written determination the findings and conclusions reached on all issues of fact and law it had considered material. What Article 3:4 required was a demonstration that dumped imports were causing injury. The purpose of this requirement was to prohibit an investigating authority from attributing injury caused by other factors to dumped imports. Article 8:5, on the other hand, required an investigating authority to provide adequate notice to the public of the basis for its final determination. The concern expressed in Article 8:5 was not found in Article 3:4 or in any other paragraph of Article 3. Had the drafters of the Agreement intended the public notice requirement for Article 3:4, they would have said so. The transcript was also relevant in making the required demonstration, and nothing in the Agreement prohibited the Panel from considering it in this connection. The transcript was the most direct and contemporaneous evidence of the precise factors considered by each KTC Commissioner in reaching a conclusion on how to vote.

30. Korea said that if there was any defect in the amount of notice afforded in the KTC's Determination, it was merely the harmless omission of a statement that of the four Commissioners voting in the affirmative, one had voted affirmative on the basis of current material injury, two had voted on the basis of threat of material injury, and one had voted on the basis of material retardation. However, the public had not been denied notice of the three alternative bases for the determination, because the Determination quite clearly stated that all three had been found to exist. Also, the fact that the vote was four to three in favour of the affirmative finding had been released to the public.

31. Korea argued that since the KTC was required by its regulation to make a transcript of its voting session, the interested parties were aware of the existence of the document. These interested parties would have been allowed access to the public version of the transcript, i.e. with the names of the Commissioners deleted from the document, provided these parties had requested for the document. However, no interested party had requested for the transcript. Furthermore, had this case been appealed in a Korean court, the court would have considered the transcript in order to ascertain the basis of the Determination.

32. Regarding the United States' protest that Korea had never mentioned the transcript during consultations, Korea stated that the United States had not requested the transcript during either the consultation or conciliation phase of this proceeding even though the companies whose interests it was representing were aware that one existed. It was not Korea's fault that the respondents to the investigation apparently failed to notify the United States that a transcript of the voting session had been made or that they had not exercised their right to request a non-confidential version of the transcript. Also, apparently the United States was not familiar with the KTC's regulations which expressly stated that a transcript of every voting session had to be prepared, but this was not Korea's fault. Korea had not specifically discussed the transcript with the United States because the bases for the affirmative determination were clearly stated in the Determination. More importantly, Korea had explained to the United States all of the reasoning for the KTC's decision that appeared in the transcript. There was nothing new in the transcript as far as the United States was concerned.

33. Therefore, Korea argued that the Panel should consider the transcript in its deliberations.

34. The United States replied that the issue was not whether the transcript was officially a part of the record, or whether the Commissioners may meet in confidence, or whether the Panel may look at the entire record in deciding the consistency of the Determination with the Agreement. The issue was what should constitute the basis for the affirmative determination of injury by the KTC. The GATT had been concerned about transparency for some time, and this concern had been carried over directly into the Agreement. The 1959 Report of the Group of Experts on Anti-Dumping and Countervailing Duties had stated that the reasons for a decision concerning the application of anti-dumping measures "should be made public in the appropriate form so as to avoid the impression that the decisions had been taken in an arbitrary way". ⁹ Similarly, in its 1983 Recommendation concerning transparency of anti-dumping proceedings, the Committee on Anti-Dumping Practices had stated that "a notice of ... a positive determination ... shall contain all relevant information on the matters of fact and law and reasons which have led to the imposition of final measures ...". ¹⁰ Articles 3:4 and 8:5 required that the determination be set forth publicly, and be forwarded to the exporting parties so that they knew the basis for the determination. However, the transcript itself had been never made available to the parties to the investigation; never published; never disseminated outside the Korean Government; never mentioned during consultations; never mentioned by Korea during conciliation; never referred to in Korea's first submission to the Panel; never referred to in Korea's oral presentation at the Panel's first meeting; and was still considered confidential by Korea. Instead it was the written Determination, dated 24 April 1991, and entitled "Determination of the Korean Trade Commission" that was published as the official statement of reasons at the time the anti-dumping duty order was issued; was given to the United States during consultations as being the determination; was treated as the statement of reasons during consultations and conciliation; was represented to the Panel as being the determination in Korea's first submission; and was represented to the Panel as being the determination during the first Panel meeting.

35. The United States said that when the drafters of the Agreement had intended a more limited requirement for public explanation, such as in the case of a negative determination, they had indicated it in the Agreement. Thus, for a negative determination, Article 8:5 provided that "each notice shall set forth at least the basic conclusions and a summary of the reasons therefor." For affirmative findings, Article 8:5 made clear that the entire explanation had to be made public, and this meant that investigating authorities could not use non-public documents such as the transcript to compensate for gaps and deficiencies in the determination. Nor did it permit authorities to use such non-public documents to elaborate on the determination, expand upon the determination, or provide fuller explanation of the finding.

36. The United States agreed with Korea that the transcript issue had grave implications for the viability of the GATT dispute settlement process, but not for reasons Korea had offered. Having only introduced the transcript at a late stage in the proceedings, Korea proceeded to base its arguments almost exclusively on the transcript, which it described as "the most important record document". Korea's late introduction of the transcript as the basis for the KTC determination threatened to render largely meaningless the dispute settlement proceedings, including consultations and conciliation, to date in this case. Even in its first submission to the Panel, Korea had not included the transcript in the list of items under the administrative record. There, Korea had stated that:

If Korea were permitted to rely on the transcript to provide some or all of the reasons or explanation for the determination, the dispute settlement proceedings preceding the introduction of the transcript would have been of little or no meaning. Permitting Korea to do so would send a clear message that it was acceptable for a contracting party to conceal some or all of the actual reasons for the decision for as long as the party was able to do so. If challenged, the party could subsequently come forward with the full statement of reasons. Article 8:5 of the Agreement was in place to prevent precisely such a situation. Carried to its logical extreme, this would permit the investigating authorities of a contracting party simply to state only certain findings publicly, but hold in reserve the reasons for the determination. Also, the very concept of a demonstration under Article 3:4 meant an overt showing at the time of the determination, not only when challenged before a Panel. Thus, it was clear that the transcript was not in conformity with the notice and the demonstration requirements of Articles 8:5 and 3:4 of the Agreement.

TO CONTINUE WITH ANTI-DUMPING DUTIES ON IMPORTS OF POLYACETAL RESINS FROM THE UNITED STATES

¹ Polyacetal resin is a form of plastic with a number of applications, including in audio or video tape machines, automotive parts, zippers and buckles, and parts and components for electronic machinery.

² The data submitted to the Panel by Korea included business proprietary information. The Panel clarified which data was confidential and thus should not be presented in its report. The factual data given in this report is the data for which Korea specifically stated that it had no objection to inclusion of that data in the Panel's report.

³ KEP was a joint venture company established by a Korean company, Dong Yang Nylon, and a Japanese company, Mitsubishi Gas Chemical, Inc. Dong Yang had previously imported PAR into Korea, and Mitsubishi had previously exported PAR from Japan to Korea.

⁴ The total production capacity was listed as 11,000 tons annually, with the "optimal production capacity" listed as 10,000 tons annually. See Determination of the Korean Trade Commission (hereinafter referred to as the "Determination"), Investigation No. Taemu 40-6-90-2, dated 24 April 1991, page 3

⁵ These were E.I. Du Pont de Nemours. Inc. (hereinafter referred to as "DuPont") and Hoechst Celanese Corporation (hereinafter referred to as "DuPont") and Hoechst Celanese Corporation (hereinafter referred to as "Hoechst").

⁶ Asahi Chemical Industry Company, Limited (hereinafter referred to as "Asahi").

⁷ Government of Korea's Ministry of Finance Public Notice No. 91-29, 14 September 1991.

⁸ The Determination, op. cit., page 1.

⁹ BISD 8S/145, 151, paragraph 21.

¹⁰ BISD 30S/24, 27, paragraph 6(c), emphasis added by the United States.