UNITED STATES � ANTI-DUMPING MEASURES ON
STAINLESS STEEL PLATE IN COILS AND STAINLESS
STEEL SHEET AND STRIP
FROM KOREA

Report of the Panel

(Continued)

ANNEX 1-5

SECOND SUBMISSION OF KOREA

(29 June 2000)

CONTENTS

INTRODUCTION 

ARGUMENT

1. ISSUES CONCERNING PANEL PROCEDURES 

1. THE BURDEN OF PRESENTING A prima facie CASE 

1. Anti-Dumping Measures Are a Derogation from the Main Thrust of the WTO, But that Does Not Affect the Burden to Establish a prima facie Case
    
2. Korea Has Met its Burden to Establish a prima facie Case of a  Violation by the United States 

2. THE STANDARD OF REVIEW

1. Article 17.6(i) Requires the Panel to Review Factual Conclusions to Determine Whether the Facts Were Both Properly Established and Evaluated Objectively and Without Bias 
    
2. Article 17.6(ii) Requires the Panel to Construe the Anti Dumping Agreement in Accordance with Customary Rules of Interpretation of Public International Law

2. THE FLAWS IN THE US ANTI-DUMPING DETERMINATIONS AND IN THE RESULTING ANTI-DUMPING MEASURES

1. UNPAID SALES 

1. The US Adjustment for the Actual Costs of Non-Payment Violated the  Requirements of Article 2.4 

(a) The Post-Sale Costs of Non-Payment Do Not Affect Price Comparability and, As a Result, They Cannot Form the Basis for an Adjustment Under Article 2.4 

(b) The US Adjustment for the Costs of Non-Payment Was Based on the Unreasonable Assumption that Those Costs Affected the Price Comparability of US Sales that Were Paid in Full, But Not of Sales in Other Markets that Were Also Made on Credit 

(c) The Adjustment for the Actual Costs of Non-Payment Violates the Fair Comparison Requirement of Article 2.4 

(d) The Defenses Offered by the United States Do Not Justify the Adjustment It Made 

(i) The US Arguments under Article 2.3 of the Anti-Dumping Agreement Are Irrelevant  

(a) The Panel Must Consider Korea's Responses to the Article 2.3 Defence Offered by the United States under the Terms of Reference for this Proceeding

(b) Because the Adjustment for Non-Payment Was Made to Direct "Export Price" Sales, It Cannot Also Have Been Made to "Construct" an Export Price under Article 2.3

(c) Article 2.3 Does Not Permit an Adjustment for the Actual Costs of Non-Payment

(ii) The US Has Effectively Conceded that an Adjustment for the Actual Cost of Non-Payment Is Not Consistent with Article 2.4

(a) A Customer's Actual Failure to Pay Is Not a "Condition or Term of Sale" 

(b) The United States Has Conceded that an Adjustment under Article 2.4 Is Appropriate Only for Differences in the "Risk" of Non-Payment, and the United States Did Not Make Such an Adjustment 

(iii) Although the United States Has Contended that Non-Payment Is Like Warranty, It Did Not Calculate the Adjustment for the Costs of Non-Payment in the Manner Used to Calculate the Adjustment for Warranty Costs 

(iv) The Decision by the US Court of International Trade in the Daewoo Case Does Not Justify the US Treatment of the Costs of Non-Payment in the SSPC and SSSS Cases 

(v) The US Interpretation of the "Fair Comparison" Requirement Would Improperly Render the Relevant Provision "Inutile", and Would Frustrate the Clearly Expressed Intent of the Anti-Dumping Agreement 

2. The Inclusion of the Unpaid Sales in the Calculation of the Dumping Margins Was Inconsistent with Established US Practice and the "Fair Comparison" Requirements of Article 2.4

2. MULTIPLE AVERAGING 

1. The Multiple-Averaging Methodology Is Inconsistent with Article 2.4.2 of the Anti-Dumping Agreement
    
2. The Multiple-Averaging Methodology Is Inconsistent with Article 2.4.1 of the Anti-Dumping Agreement
    
3. The Multiple-Averaging Methodology Deprived POSCO of the "Fair Comparison" Required by Article 2.4 of the Anti-Dumping Agreement 
    
4. The Arguments Presented by the United States Do Not Justify Its Departure from the Methodology Required by the Anti-Dumping Agreement

(a) Although Article 2.4.2 Requires the Investigating Authorities to Limit Averages to "Comparable Transactions," A Currency Depreciation Does Not Make Transactions Non-Comparable 

(i) The Meaning of the Term "Comparable Transactions" Must Be Understood in Light of the Rules Concerning "Comparisons" Established by the Anti-Dumping Agreement 

(ii) A Currency Depreciation Does Not Make Transactions "Non-Comparable" under the Anti-Dumping Agreement

(iii) The Provision in the Chapeau of Article 2.4 Requiring that Comparisons Be Made "At As Near As Possible the Same Time" Does Not Justify a Multiple-Averaging Methodology to Account for Currency Movements

(b) Article 2.4.1 Describes the Permissible Modifications to the Dumping Calculations for Exchange Rate Movements; It Is Not Limited to Defining the Appropriate Exchange Rates to Be Used in Dumping Calculations

(c) A Comparison of a Single Average Normal Value to a Single Average Export Price Does Not "Disguise" Dumping Margins

(i) The Notion of "Disguised" Dumping Margins Is Inherently Circular and Fundamentally Contrary to the Bargain Reflected in the Anti-Dumping Agreement 

(ii) The Multiple-Averaging Methodology Improperly Assumes that an Over-Valued Exchange Rate Is More Correct than an Under-Valued Exchange Rate

3. DOUBLE-CONVERSION OF LOCAL SALES

1. The Double-Conversion of the Dollar Prices for the "Local Sales" Violated Article 2.4.1 of the Anti-Dumping Agreement, Which Permits Currency Conversions Only When Such Conversions Are "Required
    
2. The Double-Conversion Methodology Employed by the United States Was Inconsistent with the Fair Comparison Requirement of Article 2.4 
    
3. The Justifications Offered by the DOC for Adopting the Double-Conversion Methodology Were Unreasonable, Unfair and Otherwise Inconsistent with the Requirements of the Anti-Dumping Agreement 
    
4. The US Arguments Before this Panel Concede that the Double-Conversion Methodology Was Flawed

(a) The United States Has Conceded that Its Decision to Adopt the Double-Conversion Methodology Was Based on a Factual Error

(b) The United States Has Conceded that the First Conversion from Dollars to Won Did Not Comply with the Requirements of Article 2.4.1

5. The Other Defenses Offered by the United States Do Not Provide a Basis for Upholding the Double-Conversion Methodology

(a) The Facts Concerning the Local Sales Were Never in Dispute, and the Decision by the United States to Apply the Double-Conversion Methodology to the Local Sales Was Not a Factual Finding that Is Entitled to Special Deference

(b) The Issue Is Not Whether the DOC Used Exchange Rates on the Date of Some Sale 

(c) The Anti-Dumping Agreement Only Permits Currency Conversion under the Situations Described in Article 2.4.1 

(d) The DOC's Adoption of the Won Amounts that Had Been Calculated by POSCO for Internal Accounting Purposes Constitutes an Improper Double-Conversion 

(e) The United States Cannot Justify the Unfair Results Caused by the Double-Conversion Methodology

4. PROCEDURAL ERRORS IN THE US DETERMINATIONS 

1. The United States Failed to Administer Its Laws in a "Uniform" and "Reasonable" Manner, As Required by Article X:3(a) of GATT 1994 

(a) Article X:3(a) Requires Investigating Authorities to Implement Domestic Law Consistently, in a Uniform and Reasonable Manner 

(b) The Unjustified US Departures from Established Practice Violated the Requirements of Article X:3(a) 

(i) The Failure to Exclude Unpaid Sales from the Dumping Analysis Was Inconsistent with the DOC's Established Practice 

(ii) The Multiple-Averaging Methodology Was Inconsistent with the DOC's Established Practice 

(iii) The Double-Conversion of Local Sales Was Inconsistent with the DOC's Established Practice 

2. The Incorrect and Incoherent Explanations Offered by the United States Were Inconsistent with the Requirements Set Forth in Article 12.2 of the Anti-Dumping Agreement 
    
3. The Sharp and Unwarranted Reversals in US Methodology on These Issues Between the Preliminary and Final Determinations Effectively Deprived POSCO of the "Full" and "Ample" Opportunity to Defend Its Interests Required by Article 6 of the Anti-Dumping Agreement

3. REMEDY 

CONCLUSION 

INTRODUCTION

1. This submission by the Republic of Korea ("Korea") responds to the arguments presented by the United States in its First Submission and during the first meeting of the Panel, as well as to the arguments presented by the third parties in their written submissions and oral presentations, concerning the anti-dumping measures imposed by the United States against the Pohang Iron and Steel Co., Ltd. ("POSCO") as a result of the investigations of Stainless Steel Plate in Coils ("SSPC") and Stainless Steel Sheet and Strip in Coils ("SSSS") from Korea.

2. As an initial matter, it should be noted that the first round of written submissions, and the first meeting of the Panel, have narrowed the issues in this proceeding considerably - as the United States has retreated significantly from a number of the positions it had taken previously. In particular,

• With respect to the "unpaid" sales issue, the United States has conceded that the adjustment for the cost of unpaid sales was made to both direct "export price" and indirect "constructed export price" sales - which means that the adjustment has to be justified, if at all, under Article 2.4 of the Anti-Dumping Agreement. The Article 2.3 defense advanced earlier by the United States is therefore clearly insufficient, because Article 2.3 does not apply at all to direct "export price" sales.
   
• The United States has also conceded that an adjustment under Article 2.4 is appropriate only for differences in the risk of non-payment in each market - because only the risk is known at the time the "conditions and terms of sale" are fixed. This concession is fatal to the US case, because the United States did not purport to measure differences in the risk of non-payment in the SSPC and SSSS cases. Instead, the United States simply made an adjustment for the actual cost of the non-payment that POSCO happened to experience during the investigation period - despite evidence indicating that this non-payment was unanticipated and disproportionate to POSCO's normal experience on US sales. Once it is conceded that an adjustment is appropriate only for the risk of non-payment, it is clear that the adjustment for actual non-payment costs was flawed.

• With respect to the "multiple averaging" issue, the United States has conceded that Article 2.4.2 requires the calculation and comparison of a single average normal value to a single average export price for all "comparable transactions" - which means that the multiple-averaging methodology is permissible only if the sales before and after the depreciation of the Korean won were not "comparable transactions." Significantly, the United States has also conceded that the exchange-rate provisions of Article 2.4.1 (which are the only provisions of the Anti-Dumping Agreement addressing changes in exchange rates) do not "establish a limit on which sales may be considered 'comparable' within the meaning of Article 2.4.2." Thus, the United States has effectively conceded that there is no basis under the Agreement for treating pre- and post-depreciation sales as non-comparable transactions. The multiple-averaging methodology cannot, therefore, be consistent with the requirements of Article 2.4.2.

• And, finally, the United States has conceded that its double-conversion methodology for the "local sales" would only have been appropriate if the sales had been denominated in Korean won, and not in US dollars. The United States also has conceded that the information verified by the US Department of Commerce (the "DOC") confirmed that the economic substance of these sales was fixed in dollars, and that the initial conversion of these dollar amounts to won (which was done by POSCO for internal accounting purposes) was not consistent with the exchange-rate methodology required by the Anti-Dumping Agreement. These concessions necessarily mean that the DOC's final determinations - which relied on extraneous factors such as the differences between POSCO's "internal" exchange rates and the official US exchange rates - failed to address the fundamental issue. Instead, because the orders, invoices and payments were all fixed in dollars, and the initial conversion to won was inconsistent with the Agreement's requirements, the DOC's double-conversion methodology cannot be upheld.

3. In short, the concessions the United States has made are fatal to its case. The anti-dumping measures on SSPC and SSSS should not, therefore, be allowed to remain in effect.

ARGUMENT

I. ISSUES CONCERNING PANEL PROCEDURES

4. In its submissions, the United States has argued that the Panel's role in this proceeding should be narrowly circumscribed to essentially shield the US anti-dumping measures from meaningful review. Thus, the United States argues that the Panel is not even permitted to consider the merits of Korea's claims, because, it contends, Korea allegedly failed to meet the burden of proof in some as-yet unspecified manner. The United States also argues that the Panel should accept the US decisions under some extreme rule of deference - in part because it contends that the issues raised by Korea involve "factual" questions (even though there actually are no facts in dispute) and in part because it has decided that its own interpretations of the Anti-Dumping Agreement on the relevant issues are "permissible."

5. These procedural arguments by the United States are, however, off the point. They misstate the requirements of the Anti-Dumping Agreement, and they mischaracterize the claims Korea has actually made. As discussed below, they certainly do not provide a basis for the Panel to ignore the substantive claims Korea has presented.

A. THE BURDEN OF PRESENTING A prima facie CASE

1. Anti-Dumping Measures Are a Derogation from the Main Thrust of the WTO, But that Does Not Affect the Burden to Establish a prima facie Case

6. The First Submission of the United States asserted that a complaining party "bears the initial burden of coming forward with evidence and argument that establishes a prima facie case of a violation."¹ Significantly, the US Submission did not argue that Korea had failed to meet its burden. Instead, it seems that the United States had a different purpose for making this statement: To set up a phantom argument that Korea did not make in an attempt to obscure a key point in this case.

7. The US Submission argued that Korea's burden is not affected by the fact that anti dumping measures are a derogation from the trade liberalization purposes of the WTO.² The US argument implies that Korea argued that it is exempt from the initial burden of presenting a prima facie case. But Korea never made such an argument. To the contrary, Korea introduced considerable evidence and argument to meet its initial burden.

8. The true significance of the fact that anti dumping measures are a derogation from the main thrust of the WTO lies in the nature of WTO disciplines on anti dumping measures. As Korea explained in its First Submission, the authority to impose anti dumping duties is narrowly limited to circumstances where there is injurious dumping, and anti dumping duties cannot exceed the dumping margin. This has always been the rule under GATT 1947, and it is very explicit in Articles 1 and 9.3 of the Anti Dumping Agreement.³

9. These limitations are essential to the proper functioning of the WTO regime. Without these limitations, Members could readily circumvent their tariff bindings and most favoured nation commitments simply by labeling any new duties as "anti dumping duties" without regard to whether there was any dumping to offset. Dumping calculations thus play a vital role in preserving the integrity of other WTO obligations - and so these calculations are themselves subject to detailed substantive and procedural disciplines. The object and purpose of these detailed rules, then, is to restrict the use of anti dumping measures to circumstances where (among other conditions) dumping has been fairly established. These detailed rules must, of course, be interpreted in accordance with that object and purpose.

2. Korea Has Met its Burden to Establish a prima facie Case of a Violation by the United States

10. It was only in its Oral Statement that the United States argued for the first time that Korea "failed to meet its burden of proof." Specifically, the United States argued as follows:

It is obvious that Korea believes the United States should have weighed the evidence differently and taken different approaches to certain issues in the underlying investigations. It has simply failed to demonstrate that the United States was required by the Anti dumping Agreement to do so. There is much rhetoric in Korea's submission about the United States "penalizing" POSCO, underscored by the insinuation that the United States ignored its own legal precedent to do so. But legally and factually there is no case.⁴

It is readily apparent that these conclusory assertions by the United States are insufficient to establish that Korea failed to produce sufficient evidence and argument to present a prima facie case. The US Oral Statement did not point to a single concrete example of a missing piece of required evidence or argument.

11. Nor could the United States have done so. Korea bore its burden by providing ample evidence and argument in its First Submission to demonstrate the United States' substantive violations concerning each of the three key issues, as well as the various procedural violations. For example, with regard to the unpaid sales issue, Korea provided evidence and argument showing that there were unpaid sales, that the United States made an adjustment for those unpaid sales, that the United States included the unpaid sales in its calculation of export price, and that the adjustment and the inclusion in the dumping calculation were improper, unfair, and inconsistent with WTO procedures. If anything more than that is required to make a prima facie case, the United States has failed to suggest what that might be. Korea, therefore, clearly met its burden of presenting a prima facie case.

B. THE STANDARD OF REVIEW

1. Article 17.6(i) Requires the Panel to Review Factual Conclusions to Determine Whether the Facts Were Both Properly Established and Evaluated Objectively and Without Bias

12. In an effort to avert legitimate Panel scrutiny of the DOC's factual conclusions, the US Submission mischaracterized Korea's position. Specifically, the US Submission complained that "Korea invites the Panel to step into the shoes of the DOC and engage in a de novo review of the facts."⁵ That statement has no basis. Korea never invited de novo review.

13. To the extent that there are facts in dispute, Korea expects that this Panel will assess the facts of this matter in accordance with Article 17.6(i) of the Anti Dumping Agreement. Under that Article , factual conclusions are to be rejected by the Panel if the facts were not established properly or if they were not evaluated objectively and without bias. Thus, contrary to the United States' suggestion, the Anti Dumping Agreement does not preclude the Panel from reviewing factual conclusions altogether. To the contrary, Article 17.6(i) expressly contemplates Panel "assessment of the facts of the matter" and requires that factual conclusions be reviewed under an appropriate standard. Decisions of other panels demonstrate that the appropriate standard of review is "whether a reasonable, unprejudiced person could have" made the factual determinations at issue "based on the evidence relied upon."⁶

14. In any event, the US argument is largely irrelevant. There actually are very few, if any, facts in dispute - especially in light of the significant concessions made by the United States at the first Panel meeting. To be precise,

• On unpaid sales, there is no dispute that there were unpaid sales, that the DOC included the unpaid sales in its analysis, and that the DOC also made an adjustment for the cost of non-payment in its analysis of all US sales (including the direct sales made by POSCO and the indirect sales through POSAM).

•  On multiple-averaging, there is no dispute that the Korean won depreciated significantly against the US dollar late in 1997, that the DOC split the investigation periods into sub periods, that the DOC calculated separate averages for each sub period, and that for those sub periods with "negative margins" the DOC "zeroed" those "negative margins" when calculating the overall margin.

• On double-conversion, there is no dispute that the orders for the "local sales" were placed in US dollars (and not in won), that the invoices showed both the agreed-upon dollar price and an amount in won calculated by applying the Korean Exchange Bank's exchange rate in Seoul on the date of invoice, that the won amount on the invoice was recorded in POSCO's accounting records, that the customer paid in won by converting the dollar price using the Korean Exchange Bank's exchange rate in Seoul on the date of payment, that the won amount of the payment did not correspond to the won amount on the invoice, that the DOC chose to calculate normal value based on the won amounts recorded in POSCO's accounting records instead of the actual dollar prices of the sales and to convert that amount back into dollars at a different exchange rate announced by a different bank (the New York Federal Reserve) on a different date (the date of the US sale), and that the double conversion in fact caused distortions in calculation of the normal value.

For none of the substantive issues, therefore, are there any key facts in dispute. There are only legal questions concerning the propriety, fairness, and reasonableness of the US methodology.

2. Article 17.6(ii) Requires the Panel to Construe the Anti Dumping Agreement in Accordance with Customary Rules of Interpretation of Public International Law

15. The United States repeats in this case its now familiar attempt to import a concept of extreme deference from US domestic law into the WTO regime.⁷ Specifically, the US First Submission contended, "[T]he relevant question in every case is not whether the challenged determination rests upon the best or the 'correct' interpretation of the Anti Dumping Agreement, but whether it rests upon a 'permissible interpretation' (of which there may be many). If it does then this Panel must uphold the determination."⁸

16. That assertion (which is unsupported by any argument) misstates the rule for construing the Anti Dumping Agreement in Article 17.6(ii). Article 17.6(ii) provides:

[T]he panel shall interpret the relevant provisions of the Agreement in accordance with customary rules of interpretation of public international law. Where the panel finds that a relevant provision of the Agreement admits of more than one permissible interpretation, the panel shall find the authorities' measure to be in conformity with the Agreement if it rests upon one of those permissible interpretations.

The US view virtually ignores the first sentence of Article 17.6(ii),⁹ while distorting the meaning of the second.

17. In fact, this Panel is expressly charged with interpreting the Anti Dumping Agreement in accordance with customary rules of treaty interpretation (such as Articles 31 and 32 of the Vienna Convention on the Law of Treaties). If that process leads the Panel to conclude that there is one correct interpretation of a particular provision, then an anti dumping measure based on a different interpretation cannot stand. Only in those rare circumstances where the customary interpretative process leads the Panel to conclude that there is "more than one permissible interpretation," does the second sentence of Article 17.6(ii) apply. That is, Article 17.6(ii) only provides for deference to a defending party's interpretation of a provision after the Panel has already completed the interpretative process and affirmatively found "more than one permissible interpretation." Thus, the US view has it backwards. It is not the Panel's role to ask first (and only) whether the US interpretations of the Anti Dumping Agreement are "permissible" - instead, that question only arises at the end of the customary interpretative process. Any other interpretation would render the first sentence of Article 17.6(ii) "inutile," and would undo the carefully wrought balance of interests that is reflected in Article 17.6(ii) as negotiated.

18. In DRAMS, another case arising under the Anti Dumping Agreement between the same two parties as in this case, the parties argued at length about the US claim for special deference to its legal interpretations.¹⁰ The DRAMS Panel found it possible to rule for Korea without making a definitive "general" statement about the meaning of Article 17.6(ii). Nevertheless, the Panel's comment on Article 17.6(ii) is highly instructive:

In arriving at our finding, we examined the matter in accordance with the terms of Article 17.6, including 17.6 sub para (ii). In interpreting the relevant provisions of the AD Agreement in the course of addressing the claims and arguments before it, we have done so in accordance with customary rules of interpretation of public international law. We note that, in making certain of its arguments in response to the claims of Korea, the United States characterised those arguments as constituting a "permissible interpretation" of the terms of the AD Agreement. As a matter of fact, where we failed to find these arguments persuasive, we rejected them on the basis that they were not consistent with the AD Agreement and, in reaching such a view, we did so on the basis of the customary rules of interpretation of public international law. The fact that the arguments concerned had been presented as a "permissible interpretation" did not, in the circumstances of this case, alter the legal basis upon which we were able to, and did, evaluate them, viz. the customary rules of interpretation of public international law. We further observe that, as a consequence, there is neither warrant nor need in this case to enquire further as to whether the AD Agreement "more generally," as it were, admits of further interpretation.

Thus, in the course of rejecting interpretations advanced by the United States as "permissible," the DRAMS Panel made two important points about how Article 17.6(ii) functions. First, it re affirmed the primacy of customary rules of interpretation in construing the Anti Dumping Agreement. Second, it clearly rejected the notion that mere invocation of the phrase "permissible interpretation" automatically "alter[s] the legal basis" upon which a panel may evaluate a legal argument.

1 US First Submission, para. 36.

2 US First Submission, paras. 37, 39.

The US Submission denied that anti-dumping measures are a derogation from the main thrust of the WTO regime. Naturally, the United States failed both to provide any alternative to Korea�s view that the main thrust of the WTO regime is to liberalize and promote trade and to reconcile tariff-raising measures with the liberalization and promotion of trade. Instead, the United States hid behind a tangential legal argument. According to the United States, the Appellate Body found in Wool Shirts that the transitional safeguard mechanism in the Agreement on Textiles and Clothing ("ATC") was not an "exception" and that the "reasoning" of that finding "applies with equal force to anti-dumping measures." US Submission, para. 38, discussing United States - Measure affecting Imports of Woven Wool Shirts and Blouses from India, WT/DS33/AB/R, Report of the Appellate Body, adopted 23 May 1997, at 16. That argument is flawed. The Appellate Body did not in fact rule on whether the transitional safeguard mechanism is an "exception." Rather, it simply found that the GATT cases regarding the burden of production for GATT "exceptions" did not apply in the context of the ATC. That is, it ruled that the normal rules applied: the complaining party had the initial burden and, when that was satisfied, the defending party had the burden to respond. (The latter point is noticeably missing from the US discussion of burden issues generally and Wool Shirts in particular. It is quite ironic that the United States heavily relies on Wool Shirts when that decision held that the complaining party (India) met its initial burden, but the defending party (the United States) failed its later burden.) Moreover, the reasoning of the Appellate Body was strictly focused on the unique aspects of the ATC as a transitional arrangement within the WTO and there is absolutely nothing about the Wool Shirts decision that suggests that anti-dumping measures should not be regarded as a derogation from basic GATT norms. See Wool Shirts, at 16.

3 See Korea�s First Submission, para. 4.2.

4 US Oral Statement, para. 3.

5 US First Submission, para. 27.

6 See Mexico - Anti-Dumping Investigation of High Fructose Corn Syrup (HFCS) from the United States, Report of the Panel, WT/DS132/R, adopted 24 Feb. 2000, paras. 7.94 - 7.95 ("whether the evidence before SECOFI at the time it initiated the investigation was such that an unbiased and objective investigating authority evaluating that evidence, could properly have determined that sufficient evidence of dumping, injury, and causal link existed to justify initiation"). The HFCS decision applied the standard of review announced in Guatemala - Anti-Dumping Investigation regarding Portland Cement from Mexico, Report of the Panel, WT/DS60/R, adopted 25 Nov. 1998, as modified by the Appellate Body on other grounds, paras. 7.54 - 7.57, which in turn applied the standard of review in United States - Initiation of a Countervailing Duty Investigation into Softwood Lumber Products from Canada, Report of the Panel, 34S/194, adopted 3 June 1987, paras. 332-35.

Although it pre-dates the Uruguay Round, the observation of the Electrical Transformers Panel about the importance of reviewing factual conclusions under an appropriate standard still rings true today: That Panel rejected the defending party�s argument that its factual determinations were not reviewable, because that "would give governments complete freedom and unrestricted discretion in deciding anti-dumping cases without any possibility to review the action taken in the GATT. This would lead to an unacceptable situation under the aspect of law and order in international trade relations as governed by the GATT." New Zealand - Imports of Electrical Transformers from Finland, Report of the Panel, L/5814 -32S/55, adopted on 18 July 1985, para. 4.4.

7 The so-called Chevron doctrine of US law - which requires the courts to defer to an agency�s interpretation of the laws it administers - is based on concepts of governance peculiar to the US domestic system (such as the "separation of powers" among the three branches of the federal government). See Adams Fruit Co. v. Barrett, 494 US 638, 649 (1990) ("A precondition to deference under Chevron is a congressional delegation of administrative authority.") (ROK Ex. 59), superseded by statute on other grounds as stated in Deck v. Peter Romein�s Sons, Inc., 109 F.3d 383 (7^th Cir. 1997). Chevron deference has no application in the WTO context. The US attempt to bring Chevron to the WTO was not successful in the Uruguay Round negotiations, it was not successful in past cases such as DRAMS, and it should not succeed here.

8 US First Submission, para. 35. In an oral aside at the first meeting of the Panel, the United States clarified its position, indicating that it meant to say that any "permissible interpretation" of the Anti-Dumping Agreement is "correct" and "must be sustained." This clarification is the high-water-mark of the US demand for deference, revealing the extreme, unquestioning deference the United States seeks.

9 Indeed, in its oral statement, the United States wholly ignored the first sentence, describing the second sentence alone. US Oral Statement, para. 50.

10 Korea commends the relevant portion of the descriptive part of the DRAMS Panel report to this Panel for further discussion of this issue. See United States - Anti-Dumping Duty on Dynamic Random Access Memory Semiconductors (DRAMS) of One Megabit or Above from Korea, Report of the Panel, WT/DS99/R, adopted on 19 Mar. 1999, at paras. 4.44 - 4.74. Korea further commends to the Panel�s attention the excellent Article on this subject by the eminent WTO scholar John Jackson, which (as discussed further in DRAMS) completely undercuts the intellectual basis for the US position. See Steven P. Croley & John H. Jackson, WTO Dispute Procedures, Standard of Review, and Deference to National Governments, 90 Am. J. Int�l L. 193 (1996) (ROK Ex. 60).

To continue with II. THE FLAWS IN THE US ANTI-DUMPING DETERMINATIONS AND IN THE RESULTING ANTI-DUMPING MEASURES A. UNPAID SALES

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