This is Jesse Kreier's Typepad Profile.
Join Typepad and start following Jesse Kreier's activity
Join Now!
Already a member? Sign In
Jesse Kreier
Recent Activity
The following response is from Zhiguo Yu: Thank you for your attention, Professor Kreier. As to legal text regarding Particular Market Situation (PMS), there are no provisions about this notion in either the Foreign Trade Law or the Antidumping Regulation of China. And there are no specific rules or guidance on how to probe the PMS at the Ministerial regulation level. To the best of my knowledge, however, the Antidumping Manual of Chinese IA provides an introduction of this notion which has not been made available to the public. In my opinion, however, the absence of a direct citation to PMS does not mean the IA has no authority to deal with relevant claims in an antidumping investigation. In fact, PMS-related claims have been submitted to MOFCOM in the past. In 2005 in a case against imported butanols from South Africa, the petitioners argued that the market within South Africa was in a particular market situation because of the international sanctions resulting from the segregation policy by the exporting government. Unfortunately, the IA did not rule on this issue because the investigation was dismissed after a finding of no injury. The legal authorization to look into PMS may come from two sources. First, the fair comparison rule in the Foreign Trade Law and the Antidumping Regulation may be the direct source. As the Law and Regulation both require the IA to ensure price comparability between the NV and EP, MOFCOM has the obligation to establish a NV as a proper benchmark to gauge EP. Therefore, if a PMS is spotted in a case, the IA has to arrive at a proper NV instead of using convention methods. The other one is the ADA itself. Even though there is no direct citation to PMS in domestic rules, it does not mean the IA could not handle it. For example, there is also no direct provisions about targeted dumping in the Law and Regulations. Similarly, the Foreign Trade Law only provides a broad authorization to MOFCOM to ensure the remedial effects of trade remedy measures without direct mention of anti-circumvention. In my opinion, the IA nevertheless could deal with related claims in a specific procedure if it complies with the ADA. In this case, MOFCOM did not invoke PMS but rather concluded that several segments of the market and industries of the US were affected by non-market factors which lead to a finding that NV based on domestic sales of like products was not a proper benchmark to make a fair comparison with the EP. Once distortions in these segments were spotted, the petitioners argued, the NV should be adjusted to preclude the impacts of these non-market factors upon the cost and price of the like products. Because the IA applied FA rules instead of such non-market factor findings to calculate the dumping margins, the specific method of how the non-market findings affect the NV calculation remains unknown yet.
1 reply
Well, they could have easily said that they considered the Panel's reasoning to be flawed, and over-ruled them again. Turning to the Article 11 claim, they could have simply said we do not reach this claim. Or they could have said that ignoring their decisions, while perhaps impolitic, was not an Article 11 violation. That they did not do, either in Stainless Steel or in Continued Zeroing. But when (referring to your subsequent post) Giorgio Sacerdote says (in 2019) that "the AB rejected the claim of Mexico that article 11 DSU had been breached by the panel because of it not having followed the interpretation previously laid down by the AB", he is reading a different AB Report than I am. The Report says ""Since we have corrected the Panel's erroneous legal interpretation and have reversed all of the Panel's findings and conclusions that have been appealed, we do not, in this case, make an additional finding that the Panel also failed to discharge its duties under Article 11 of the DSU." (para. 162). Contrast that to DS248, for example, where the AB states that the US "has not substantiated its claim that the Panel acted inconsistently with Article 11 of the DSU, and this claim must therefore fail"."
1 reply
Indeed. It's a bit of a Greek tragedy, where hubris brings down the protagonist. I think in a number of situations, the AB realized they had slipped up, but in their zeal to defend their authority they pushed back and dug themselves in deeper. This happened even when panels tried to cloak their disagreement by distinguishing, and offering the AB a face-saving way to shift position or at least not extend it. As a person who dedicated a quarter century to multilateral DS, and who remains convinced that functional, binding dispute settlement is needed in a fractured and complex world, the current state of affairs is even sadder because it was perhaps avoidable.
1 reply
Sorry, Jeppe, that I missed your post. We must have been writing our posts simultaneously. Your comments about the AB's approach being one of "norm" and "deviation" are insightful. The question is how broad is the scope for deviation, and whether finding a legal interpretation unconvincing would satisfy the AB's test. I think the answer is a clear no.
1 reply
Hi Meredith. Your link does not work. I'd like to see the article, and compare your list of cogent reasons to the narrow set of examples in DS449. In that Report, the US argues that "one example of a cogent reason would be where the Appellate Body findings are not persuasive or not in keeping with the covered agreements" (para. 7.311). The Panel disagrees, and offers a narrow list of examples (one of which is that the Members have subsequently agreed to a contrary authoritative interpretation under Article IX of the WTO Agreement!). The US did not appeal.
1 reply
By the way, we should not ignore the AB Report in Continued Zeroing (DS350), issued less than a year after after the Stainless Steel report. In that dispute, the EU takes a conditional appeal under Article 11, explicitly arguing that "cogent reasons" cannot be invoked by a panel in the face of an AB decision, but only by the AB in face of a prior AB decision (para 363). After repeating the findings in Stainless Steel (or, perhaps, the dicta, since they make no Article 11 ruling), the AB concludes that because "the panel does appear to have acceded to the hierarchical structure contemplated in the DSU", it need not address the EU's conditional appeal.
1 reply
Simon. If it hasn't said it explicitly, it has come very close indeed. It made a very lengthy statement about Appellate Body review of findings of fact at the 27 August 2018 DSB meeting. The punchline: "As we have noted in this statement, DSU Article 17.6 expressly limits appellate review to issues of law and legal interpretation covered in a panel’s report. On its face, this would not include panel fact-finding. When we look back to the appellate report in which the Appellate Body asserted it could review panel fact-finding under the “duty” or “requirement” in DSU Article 11 to make an objective assessment of the facts, we find that there was no interpretation by the Appellate Body of the text of DSU Article 11, which states that a panel “should make” an objective assessment. And because the DSU text does not support any appellate review of the facts, it also does not suggest any particular standard for that review."
1 reply
Yes, Simon, I think that is exactly what the US is suggesting. If you go all the way back to EC-Hormones in 1998, the EC alleged that the Panel had breached Article 11 DSU, and the US (and Canada) responded that the EC was asking the Appellate Body to review findings of fact, inconsistently with Article 17.6 DSU. The Appellate Body bought the EC argument although it did not ultimately find an Article 11 violation. Article 11 of course says "should". Interestingly, the Appellate Body relied upon EC-Hormones when it found in Canada-Aircraft that "should" in Article 13 DSU was "used in a normative, rather than a merely exhortative, sense".
1 reply
I have no idea what President Trump's intentions are here, but the US has been making the case for developing Member differentiation and graduation for as long as I can remember. This includes repeated submissions to the WTO over the past couple of years. So I don't think we should somehow suggest that the US just started this process on 26 July. A more salient question for me: what are the practical implications of the United States "no longer treating" a Member as a developing country? In most contexts, the judgment is in the first instance one for the Member itself, not the United States. So if for example a prohibition does not apply to developing countries, each Member must decide in the first instance whether it is subject to the prohibition. If the US disagreed, its only recourse would to complain in the relevant WTO Body and ultimately perhaps resort to dispute settlement (assuming developing country status is justiciable). In those rare instances, such as de minimis exceptions in trade remedy cases or eligibility for preferences, where it is for the United States in the first instance to decide whether to treat a Member as a developing country, the United States already applies its own definitions (as do a number of other Members). But perhaps I am overlooking other instances?
1 reply
The WTO is not likely to post videos in real time, because so many disputes today involve business confidential information. There is a general view that there needs to be possibility to edit out such information should a party let it slip by mistake. As for posting on-line video with a time lag, it makes sense to me. It would reduce the need for travel, with all its costs and carbon footprint, and lighten the burden on the WTO to make rooms and staff available. However, there may be concern that malicious people might download and manipulate the files. Having seen Ronald Reagan rapping on Youtube, I suppose that is not impossible....
1 reply
Jesse Kreier is now following The Typepad Team
Mar 13, 2019