WT/DS162/R/Add.1 Page 22
and sale thereof in the United States: Provided, That such act or acts be done with the intent of destroying or injuring an industry in the United States, or of preventing the establishment of an industry in the United States, or of restraining or monopolizing any part of trade and commerce in such Articles in the United States."69
Japan recalls that under Article VI of the GATT 1994, dumping occurs when "products of one country are introduced into the commerce of another country at less than the normal value of the products", and "normal value" means the home market prices, third country prices, or the constructed cost of the product at issue.70 These requirements are the core concept of dumping as prescribed in Article VI of the GATT 1994.71 Article VI of the GATT 1994 prohibits Members from taking measures against dumping other than the anti‑dumping duties prescribed by this Article, irrespective of "intent to injure" or "material injury". As the text of the 1916 Act quoted above shows, the 1916 Act targets precisely this conduct.
Japan notes that the 1916 Act sets out two basic elements that trigger a violation. First, the US price must be lower than the benchmark price (normal value), which can be based either on home market prices or on third country prices. Second, the price discrimination must be accompanied by an intent to injure, destroy or prevent the establishment of a US industry. Thus, the 1916 Act targets imports and is designed to protect US industries. The conduct which it prohibits or regulates is dumping, defined as a "substantial" difference between US prices and home market or foreign market prices. Therefore, the Act is intended to regulate dumping every bit as much as would a law that complied with Article VI of the GATT 1994 and the Anti‑Dumping Agreement.
Japan argues that the provisions of the 1916 Act show that the conduct the Act targets is the same as dumping as defined by Article VI of the GATT 1994 and by the Anti‑Dumping Agreement:
The US price must be lower than normal value (the comparison price).
The US price must be adjusted for freight, customs duty and other expenses incident to importation to ensure comparability to the comparison price.
The comparison price can be based either on home market prices or on third country prices.
Japan further submits that beyond the core concept of dumping, the 1916 Act also mirrors expressions stipulated in Article VI of the GATT 1994 by requiring injury to a domestic industry to warrant relief.
Japan considers that this comparison shows that the precise wording used in the 1916 Act and in Article VI:1 of the GATT 1994 may vary, but their essential concepts are identical. The addition of other qualifying elements on the core features of the law does not alter the fundamental nature of
69 15 U.S.C. § 72 (1999) (emphasis added by Japan).
70 Japan notes that this is the core of the concept of international price discrimination.
71 Japan notes in this regard that material injury is a necessary additional requirement to take measures against dumping, but that dumping is defined only in terms of price differentials.