U.S. & China Agree to Dispute Procedure for WTO AD/CV Double Counting Case
The U.S and China have adopted procedures for disputes regarding implementation of the World Trade Organization’s ruling against double counting in United States -- Definitive Anti-Dumping and Countervailing Duties on Certain Products from China (DS379). The procedures provide for 90-day periods for panel rulings and appellate body rulings, optional consultations, the suspension of concessions by China (which is not limited by the normal 30-day expiration date), and an arbitration period of 60 days.
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(On March 11, 2011, a WTO Appellate Body reversed the findings of an October 2010 panel and found against, among other things, U.S. imposition of double remedies (i.e., the offsetting of the same subsidization twice by the concurrent imposition of AD duties calculated on the basis of an NME methodology and CV duties) in four U.S. AD/CV cases against China1. The U.S. agreed to implement the Appellate Body’s recommendations by February 2012, and the U.S. and China later mutually agreed to extend this deadline to April 25, 2012. In March 2012, in response to this WTO case as well as Court of International Trade and Court of Appeals for the Federal Circuit rulings against double counting the application of CV duties to non-market economy (NME) countries, respectively, the U.S. enacted legislation to allow the application of CV duties to NME countries and provide for adjustments for double counting.)
Consultations Not Required; 90-Day Period for Panel, Appellate Body Rulings
According to a WTO document, the U.S. and China have agreed on a procedure whereby, if China says the U.S. is not in compliance with the WTO ruling, China is not required to request consultations, and may at any time request establishment of a panel. However, if China decides to request consultations with the U.S., the U.S. and China will hold consultations within 15 days from the receipt of that request, and China may at any time after this 15-day period request establishment of a panel.
The panel must then circulate its report within 90 days of establishment, pursuant to normal procedure, unless China decides to suspend its request. Either party may request adoption of the report by the Dispute Settlement Body at a DSB meeting held at least 20 days after circulation of the report, unless either party appeals.
If either party appeals, the Appellate Body will issue its report within 90 days of notification of the appeal to the DSB. Requests for adoption of the Appellate Body report must be made at a DSB meeting within 30 days of circulation of the report.
China May Request Authorization to Suspend Concessions, not Limited by Normal 30-day Period
If a measure taken to comply with the panel or Appellate body report on implementation does not exist or is inconsistent with a covered agreement, the agreement said China may request authorization to suspend concessions or other obligations pursuant to Article 22 of the Dispute Settlement Understanding. China is not limited by the 30-day expiration date of its ability to request suspension of concessions or other obligations that normally applies pursuant to Article 22.6.
The U.S. maintains the right to object to a Chinese request to suspend concessions or other obligations, and in such cases the matter will be referred to arbitration. The agreement says the parties will cooperate to enable the arbitrator to circulate its decision within 60 days of referral.
(See ITT’s Online Archives 10102509 and 11031414 for summaries of WTO panel and Appellate Body rulings in DS379, respectively, and 11071137 and 12012418 for summary of agreements to implement these rulings in February 2012 and extension of implementation date to April 25, 2012, respectively. See also ITT’s Online Archives 12031403 for summary of enactment of U.S. law providing for, among other things, adjustments for double counting, and 10080911 and 11122210 for summaries of U.S. court decisions against double counting and application of CV duties to NME countries, respectively. See ITT’s Online Archives 12051106 for summary of CAFC granting of a motion to rehear the cases in light of the March 2012 law.)
1Certain new pneumatic off-the-road tires (A-570-912 / C-570-913), laminated woven sacks (A-570-916 / A-570-917), circular welded carbon quality steel pipe (A-570-910 / C-570-911), and light-walled rectangular pipe and tube (A-570-914 / C-570-915).