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

Report of the Panel

(Continued)

4. Claim under Article 2.4 ("fair comparison")

(a) Arguments of the parties

6.132. Korea contends that, in these investigations, US petitioners in essence claimed that anti-dumping orders were needed to protect them from an increase in imports after the devaluation of the Korea won. In these circumstances, a fair analysis of whether POSCO engaged in injurious dumping must focus on � or at an absolute minimum, include � pricing data after the devaluation of the won. Yet that pricing data was effectively excluded from the DOC's price comparisons by the multiple averaging methodology. In other words, the DOC's multiple averaging methodology resulted in a finding of dumping based solely on pre-devaluation sales. This methodology was however inconsistent with the injury analysis, which found injury based primarily on post-devaluation imports. The methodology was thus inconsistent with the fair comparison requirement of Article 2.4.

6.133. The United States considers that Korea's argument has no bearing on the question of whether the United States properly constructed averages for comparison purposes under Article 2.4.2, or even whether the United States made a fair comparison under Article 2.4. Even if Korea's argument were relevant to the issue of the consistency of the measures with Article 3 of the AD Agreement, Korea did not raise a claim under Article 3 in its request for panel review. Consequently, this issue is outside the Panel's terms of reference, and must be disregarded.

(b) Evaluation by the Panel

6.134. Korea contends that the averaging methodology used in these investigations was inconsistent with the United States' obligations to perform a "fair comparison" because the allegations of injury by petitioners, and the analysis of injury by the US International Trade Commission's, focused on post-devaluation imports. We cannot agree. In our view, the consistency of a determination of dumping with Article 2, including with any "fair comparison" requirement under Article 2.4, cannot depend upon how that determination is used in the context of an analysis of injury pursuant to Article 3. In this respect, we note that the final determination of injury in these investigations, as in all US anti-dumping proceedings, was not even made until well after the date of the final determination of dumping. Surely, a determination of dumping that was consistent with the provisions of Article 2 when it was made could not be rendered inconsistent by reason of the manner in which that determination was used for purposes of a subsequent injury analysis.

6.135. Korea's argument in effect is that the DOC's use of multiple averaging masked the fact that there was no dumping after the devaluation, while the United States' injury determination was based precisely on injury suffered in the post-devaluation period. We note however that such a situation could easily arise whenever an investigating authority uses an average-to-average comparison methodology, and irrespective of whether it uses multiple averaging, because an average-to-average methodology informs only as to whether on average during the POI there was dumping, not whether there was dumping at any given moment in time within that POI¹³⁰. Thus, the issue raised by Korea relates not to the consistency of the calculation methodology with Article 2, but rather to whether a Member is somehow required by Article 3.5 to take account of the circumstances underpinning the final margin of dumping when considering whether "dumped imports are, through the effects of dumping, as set forth in paragraphs 2 and 4, causing injury¹³¹". Korea has not however asserted any claim under Article 3.5 in its submissions, nor would such a claim be within our terms of reference¹³².

6.136. For the foregoing reasons, we conclude that the United States' use of multiple averaging periods in these investigations was not inconsistent with the first sentence of the chapeau of Article 2.4 of the AD Agreement ("fair comparison").

E. OTHER CLAIMS BY KOREA

1. Claims under Article X of GATT 1994 and Articles 6 and 12 of the AD Agreement

6.137. In addition to its claims under Article 2 of the AD Agreement, Korea has advanced a variety of claims pursuant to Article X:3(a) of the GATT 1994 and Articles 6.1, 6.2, 6.9 and 12.2 of the AD Agreement. In section VI.A.4 of this Report, having found that the United States did not act inconsistently with the relevant provisions of Article 2.4 in respect of the alleged "double conversion" of certain home market sales in the Plate investigation, we have proceeded to address Korea's claims under the above provisions. In respect of the other aspects the DOC's methodology in the Plate and Sheet investigations, however, we have found violations of Article 2 of the AD Agreement. Under these circumstances, we do not consider it necessary to address Korea's additional claims under the above provisions.

2. Claims under Article VI of GATT 1994 and Article 1 of the AD Agreement

6.138. Korea has also asserted that the United States has acted inconsistently with Article VI of the GATT 1994 and Article 1 of the AD Agreement, "which only permit anti-dumping measures to be imposed in the circumstances provided for in Article VI and pursuant to investigations conducted in accordance with the Anti-Dumping Agreement¹³³". We note that Korea's claims in respect of these two articles are dependent claims, i.e., Korea argues that because certain provisions of the AD Agreement have been violated, Article VI of the GATT 1994 and Article 1 of the AD Agreement are consequently violated¹³⁴. Because of their dependent nature, we can perceive of no useful purpose that would be served by ruling on these claims. Accordingly, we do not consider it necessary to address them.

VII. CONCLUSIONS AND RECOMMENDATION

A. CONCLUSIONS

7.1 In light of the findings above, we conclude that, with respect to "local sales":

(a) the United States in the Plate investigation did not act inconsistently with its obligations under Article 2.4.1, Article 2.4 chapeau ("fair comparison"), and Article 12.2 of the AD Agreement nor with its obligations under Article X:3(a) of GATT 1994;

(b) the United States in the Sheet investigation acted inconsistently with Article 2.4.1 of the AD Agreement by performing a currency conversion that was not required.

7.2 We further conclude that, with respect to the treatment of unpaid sales, the United States:

(a) acted inconsistently with its obligations under Article 2.4 chapeau of the AD Agreement in both the Plate and Sheet investigations by making allowances in respect of sales through unaffiliated importers which were not permissible allowances for differences affecting price comparability;

(b) acted inconsistently with its obligations under Article 2.4 chapeau of the AD Agreement in both the Plate and Sheet investigations by making allowances in respect of sales through an affiliated importer which were not permissible allowances in the construction of the export price for costs incurred between importation and resale.

7.3 With respect to multiple averaging, we conclude that:

(a) the United States' use of multiple averaging periods in the Plate and Sheet investigations was inconsistent with the requirement of Article 2.4.2 to compare "a weighted average normal value with a weighted average of all comparable export transactions";

(b) The United States' use of multiple averaging periods in the Plate and Sheet investigations was not inconsistent with Article 2.4.1 of the AD Agreement;

(c) The United States' use of multiple averaging periods in the Plate and Sheet investigations was not inconsistent with the first sentence of the chapeau of Article 2.4 of the AD Agreement ("fair comparison").

7.4 Under Article 3.8 of the DSU, in cases where there is infringement of the obligations assumed under a covered agreement, the action is considered prima facie to constitute a case of nullification or impairment of benefits under that agreement. Accordingly, we conclude that, to the extent that the United States has acted inconsistently with the provisions of the AD Agreement, it has nullified or impaired benefits accruing to Korea under that Agreement.

B. RECOMMENDATION AND SUGGESTION

7.5 In accordance with Article 19.1 of the DSU, we therefore recommend that the Dispute Settlement Body request that the United States brings its definitive anti-dumping duties on imports of stainless steel plate and sheet from Korea into conformity with the AD Agreement.

7.6 Korea requests that the Panel suggest, pursuant to Article 19.1 of the DSU, that the United States revoke its anti-dumping orders on stainless steel plate and sheet from Korea. In support of its request, Korea identifies prior panel reports under the WTO and Tokyo Round AD Agreements in which panels have suggested revocation of an anti-dumping order. Korea considers that Article 1 of the AD Agreement, which provides that "[a] anti-dumping measure shall be applied only under he circumstances provided for in Article VI of GATT 1994 and pursuant to investigations initiated and conducted in accordance with the provisions of this Agreement", precludes the possibility that the United States could bring the anti-dumping measures into conformity without revocation.

7.7 The United States considers that Korea seeks to convert the Panel's discretionary mechanism for suggesting ways that a Member could implement its recommendation into a device for obtaining a specific remedy that is inconsistent with established GATT/WTO practice and the DSU. Further, it is impossible for the Panel to know whether a dumping analysis that conformed to the Panel's decision would result in a zero or de minimis margin such that revocation would be necessary in order to bring the measures into conformity. Finally, the United States considers that Korea's broad interpretation of Article 1 of the AD Agreement to require revocation of an anti-dumping measure regardless of the nature or magnitude of the violation would render meaningless the provision of Article 19.1of the DSU that the Member bring the measure into conformity.

7.8 In considering Korea's request, we note first that Article 19.1 of the DSU gives this Panel the clear authority to "suggest ways in which the Member concerned could implement the recommendations". Thus, we do not accept the United States' proposition that a suggestion that a Member withdraw an anti-dumping measure would be inconsistent with the DSU. Nor do we consider that such a recommendation would be inconsistent � or consistent � with "established practice", as only a handful of WTO panels under the AD Agreement have even addressed a request for a suggestion to revoke¹³⁵. Rather, we consider that Article 19.1 of the DSU allows but does not require a panel to make a suggestion where it deems it appropriate to do so.

7.9 That we have the authority under Article 19.1 of the DSU to suggest revocation of an anti-dumping measure does not mean that we must or should do so in a given case. To the contrary, the AD Agreement is comprised of eighteen separate articles and innumerable obligations. Thus, violations of the AD Agreement may take many different forms and have different implications for the anti-dumping measure in question. In our view, Korea's contention that Article 1 of the AD Agreement dictates that any violation of the AD Agreement, irrespective of its nature and severity, requires the revocation of the anti-dumping measure is unsustainable. Although we do not agree that such an interpretation would render Article 19.1 of the DSU a nullity in the strict legal sense¹³⁶, we do believe that, had the drafters intended to deviate from the general rule of Article 19.1 and require revocation of anti-dumping measures in all cases of a violation, they would have manifested that intention through a special or additional dispute settlement provision in Article 17 of the AD Agreement.

7.10 Turning to the case at hand, we recall that Korea's claims related to the determinations of the DOC regarding the margin of dumping. While we have found those determinations inconsistent with the AD Agreement in a number of respects, we cannot say that, had the DOC acted consistently with the AD Agreement, it would not have found the existence of dumping¹³⁷. Under these circumstances, while there can be little doubt that revocation would be one way that the United States could implement our recommendation, we are not prepared to conclude at this time that it is the only way to do so. Accordingly, we decline Korea's request to suggest that the United States revoke the anti-dumping duties at issue in this dispute¹³⁸.

130. For that matter, even in cases where a transaction-to-transaction methodology is used, the final margin of dumping for a given exporter will not inform as to whether sales at any given moment during the POI were dumped.

131. We are not of course expressing any view here as to the proper interpretation of Article 3.5. We note in passing, however, that the use of multiple averaging periods in these investigations would have facilitated, rather than impeded, any such analysis, by making available information regarding the existence of dumping both pre- and post-devaluation.

132. Article 3 is nowhere mentioned in Korea's request for establishment of a Panel. See WT/DS179/3. It is well established that the identification of the relevant treaty provision is a "minimum prerequisite" under Article 6.2 of the DSU. See EC � Bananas, supra at para. 6.84.

133. First Submission of Korea, para. 5.7, last tiret, Annex 1-1.

134. The only exception involves Korea's claim of a violation of Article VI:1 in respect of due allowances for differences affecting price comparability. Korea however identified no basis for concluding that Article VI:1 imposes any obligation in this respect beyond that imposed by Article 2.4.1 of the AD Agreement.

135. Compare Guatemala � Anti-Dumping Investigation Regarding Portland on Cement From Mexico, Report of the Panel, WT/DS60/R, para. 8.6, reversed on other grounds, WT/DS60/AB/R and Guatemala � Definitive Anti-Dumping Measures on Grey Portland Cement from Mexico, WT/DS156/R, para. 9.6, adopted on 17 November 2000 (Panels suggest revocation in the context of a WTO-inconsistent initiation) to United States � Anti-Dumping Duty on Dynamic Random Access Memory Semiconductors (DRAMs) of One Megabit and Above from Korea, WT/DS99/R, para. 7.4, adopted 19 March 1999 (request for a suggestion to revoke was denied "in light of the range of possible ways in which we believe the [defendant] could appropriately implement" the recommendation).

136. Because, inter alia, Article 19.1 would of course continue to operate in disputes relating to measures other than anti-dumping measures.

137. Nor would it be appropriate for the Panel to try to recalculate the margin itself in light of its conclusions.

138. Cf. United States � Imposition of Anti-Dumping Duties on Imports of Fresh and Chilled Atlantic Salmon from Norway, ADP/87, adopted 27 April 1994, para 596 (Panel under Tokyo Round AD Code declined to recommend revocation because "[I]t could not be presumed that a methodology of calculating dumping margins consistent with the Panel's findings on these aspects would necessarily result in a determination that no dumping existed . . . .")

To continue with ANNEX 1-1

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