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WT/DS162/R/Add.1 Page 69

3.27

According to the United States, Article II:2 does recognize certain situations where duties may be imposed in excess of the bound rate, and one of them is "any antidumping or countervailing duty applied consistently with the provisions of Article VI".  Otherwise, according to the panel report, duties in excess of the bound rate (or duties provided on a nonmostfavourednation basis) are prohibited.241   

3.28

The United States argues that, when Article VI is read in the context of Article I:1 and Article II:1, it can be seen how the coverage of Article VI is limited.  Article VI itself applies only to laws or measures that attempt to counteract injurious dumping through the imposition of antidumping duties.

3.29

The United States submits that, given the limited coverage of Article VI and, in particular, its status as a carveout from the mostfavourednation obligation of Article I:1 and Article II:1, it does not follow that Article VI (or Article 18.1 of the AntiDumping Agreement) would itself act as a prohibition against actions that a Member may take.  Rather, Article VI is properly viewed as establishing a right that a Member has, and that is the right to impose duties to counteract injurious dumping.  Article VI and the AntiDumping Agreement do require a Member to follow the rules set forth in the AntiDumping Agreement when imposing antidumping duties.  But, they do not prohibit the imposition of other measures to counteract injurious dumping.  Indeed, Article VI does not even address that issue.  It is Article 18.1 of the AntiDumping Agreement that addresses that issue, and it makes clear that a Member may take whatever other action is consistent with other GATT 1994 provisions.  

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In the view of the United States, it is for precisely this reason that Professor Jackson opined that "although Article VI carves out an exception to GATT obligations for antidumping and countervailing duties, nevertheless, measures that do not violate other GATT provisions can also be used to counteract dumping or subsidies."242

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In reply to the Japanese argument that "[i]f the US interpretation were correct, a Member could take any measure in addition to antidumping duties after completing an investigation in accordance with the AntiDumping Agreement", the United States maintains its position that Article 18.1 allows remedies for dumping other than duties as long as those remedies do not run afoul of other GATT 1994 provisions.  However, that requirement poses a severe limitation on the actions available to a Member.  For example, the national treatment obligation of Article III, by itself, substantially restricts the actions that a Member might take.  If a law imposed damages on an importer based on findings of "dumping" and "injury", it would not be governed by Article VI, given that it did not impose duties.  Instead, it would be an internal law, governed by Article III:4, and the treatment accorded to imported products by that law would have to be no less favourable than the treatment accorded to domestic products by any comparable domestic law.  In all likelihood, moreover, that law would violate Article III:4, given that national antitrust regimes generally base liability for low pricing on factors such as the possession of a large market share and predation.

241 In response to the question of the Panel regarding how the parties understand the phrase "In order to offset dumping […]" in Article VI:2 of the GATT 1994, the United States argues that the phrase "[i]n order to offset dumping […]" is used in Article VI:2 of the GATT 1994 in order to differentiate the type of duty that a Member may impose under Article VI from the types of duty that would run afoul of Article I:1 and Article II:1 of the GATT 1994.  As explained by the panel report in United States - Pork, Article I:1 prohibits duties on imported products that do not meet the mostfavourednation standard.  Article II:1 prohibits duties in excess of the bound rate.  Within this context, the phrase "In order to offset dumping […]" in Article VI:2 can be seen as an attempt to specify a situation in which it is proper for a Member to impose duties in excess of the bound rate and on a nonmostfavourednation basis.

242 The United States refers to J. H. Jackson, Op. Cit., p. 411.

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