WTO Dispute Settlement Proceeding Regarding China-Countervailing and Antidumping Duties on Grain Oriented Flat-Rolled Electrical Steel

AGENCY:

Office of the United States Trade Representative.

ACTION:

Notice; request for comments.

SUMMARY:

The Office of the United States Trade Representative (“USTR”) is providing notice that on September 15, 2010, the United States requested consultations with the People's Republic of China (“China”) under the Marrakesh Agreement Establishing the World Trade Organization (“WTO Agreement”) concerning issues relating to countervailing and antidumping duties imposed by China on imports from the United States of grain oriented flat-rolled electrical steel. That request may be found at http://www.wto.org contained in a document designated as WT/DS414/1. USTR invites written comments from the public concerning the issues raised in this dispute.

DATES:

Although USTR will accept any comments received during the course of the dispute settlement proceedings, comments should be submitted on or before October 29, 2010 to be assured of timely consideration by USTR.

ADDRESSES:

Public comments should be submitted electronically to www.regulations.gov,, docket number USTR-2010-0027. If you are unable to provide submissions to www.regulations.gov,, please contact Sandy McKinzy at (202) 395-9483 to arrange for an alternative method of transmission. If (as explained below) the comment contains confidential information, then the comment should be submitted by fax only to Sandy McKinzy at (202) 395-3640.

FOR FURTHER INFORMATION CONTACT:

Randy Miller, Associate General Counsel, Office of the United States Trade Representative, 600 17th Street, NW., Washington, DC 20508, (202) 395-9655.

SUPPLEMENTARY INFORMATION:

USTR is providing notice that consultations have been requested pursuant to the WTO Understanding on Rules and Procedures Governing the Settlement of Disputes (“DSU”). If such consultations should fail to resolve the matter and a dispute settlement panel is established pursuant to the DSU, such panel, which would hold its meetings in Geneva, Switzerland, would be expected to issue a report on its findings and recommendations within nine months after it is established.

Major Issues Raised by the United States

On September 15, 2010, the United States requested consultations with China concerning the imposition of countervailing and antidumping duties on grain oriented flat-rolled electrical steel (“GOES”) exported from the United States. In June of 2009, China initiated separate countervailing and antidumping duty investigations on GOES exported from the United States. In April of 2010, China issued final determinations of subsidization, dumping, and injury, along with a notice of the imposition of countervailing and antidumping duties.

China has obligations under the Agreement on Subsidies and Countervailing Measures (the “SCM Agreement”), the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 (the “AD Agreement”), and the General Agreement on Tariffs and Trade 1994 (“GATT 1994”) regarding the imposition of countervailing and antidumping duties on imports. In the course of its countervailing and antidumping investigations regarding GOES, China appears to have acted inconsistently with various obligations of the SCM Agreement, the AD Agreement, and the GATT 1994. Actions apparently inconsistent with China's obligations include initiation of the investigations without sufficient evidence, failure to objectively examine the evidence, failure to disclose essential facts underlying its conclusions, and failure to provide an adequate explanation of its calculations and legal conclusions.

In particular, in the request for consultations, the United States states that China's countervailing and anti-dumping duties on GOES from the United States appear to be inconsistent with the following provisions of the SCM Agreement, the AD Agreement, and the GATT 1994:

1. Articles 10 and 19 of the SCM Agreement, because China improperly determined that government purchases under U.S. Buy American Laws conferred a “benefit.”

2. Article 12.8 of the SCM Agreement, because China failed to disclose the “essential facts” underlying its determinations.

3. Article 12.7 of the SCM Agreement, because China improperly based its determinations on the facts available.

4. Article 22.3 of the SCM Agreement, because China failed to provide in sufficient detail the findings and conclusions it reached on all issues of fact and law it considered material.

5. Article 22.5 of the SCM Agreement because China failed to make available all relevant information on the matters of fact and law and reasons which have led to the imposition of final measures.

6. Article 11.2 of the SCM Agreement because: (a) The application for a countervailing duty investigation failed to contain information reasonably available to the applicant regarding the existence of a financial contribution, a benefit, specificity, injury and causation; and (b) there was not sufficient evidence in the application to justify the initiation of an investigation.

7. Article 11.3 of the SCM Agreement because China failed to review appropriately the accuracy and adequacy of the evidence provided in the application.

8. Articles 12.3 and 12.4.1 of the SCM Agreement, because China failed to provide, or require the applicant to provide, adequate non-confidential summaries of allegedly confidential information.

9. Article 22.2(iii) of the SCM Agreement, because China included in its countervailing duty investigation the American Recovery and Reinvestment Act of 2009 (“Recovery Act”) and laws of the various U.S. states dealing with the government purchase of goods.

10. Articles 15.1, 15.2, 15.5, 12.8, of the SCM Agreement, and Articles 3.1, 3.2, 3.5, 6.9 and 12.2 of the AD Agreement, because: (a) China's analysis of the effect of imports under investigation and alleged causal link was not based upon an objective examination on the basis of positive evidence; (b) China failed to provide in sufficient detail the findings and conclusions reached on all issues of fact and law it considered material; and (c) China failed to disclose the “essential facts” underlying its determinations.

11. Article 10 of the SCM Agreement as a consequence of the breaches of the SCM Agreement described above.

12. Article 1 of the AD Agreement as a consequence of the breaches of the AD Agreement described above.

13. Article VI of the GATT 1994.

Public Comment: Requirements for Submissions

Interested persons are invited to submit written comments concerning the issues raised in this dispute. Persons may submit public comments electronically to www.regulations.gov docket number USTR-2010-0027. If you are unable to provide submissions by www.regulations.gov,, please contact Sandy McKinzy at (202) 395-9483 to arrange for an alternative method of transmission.

To submit comments via www.regulations.gov,, enter docket number USTR-2010-0027 on the home page and click “search”. The site will provide a search-results page listing all documents associated with this docket. Find a reference to this notice by selecting “Notice” under “Document Type” on the left side of the search-results page, and click on the link entitled “Submit a Comment.” (For further information on using the www.regulations.gov Web site, please consult the resources provided on the website by clicking on “How to Use This Site” on the left side of the home page.)

The www.regulations.gov site provides the option of providing comments by filling in a “Type Comment and Upload File” field, or by attaching a document. It is expected that most comments will be provided in an attached document. If a document is attached, it is sufficient to type “See attached” in the “Type Comment and Upload File” field.

A person requesting that information contained in a comment submitted by that person be treated as confidential business information must certify that such information is business confidential and would not customarily be released to the public by the submitter. Confidential business information must be clearly designated as such and the submission must be marked “BUSINESS CONFIDENTIAL” at the top and bottom of the cover page and each succeeding page. Any comment containing business confidential information must be submitted by fax to Sandy McKinzy at (202) 395-3640. A non-confidential summary of the confidential information must be submitted to www.regulations.gov. The non-confidential summary will be placed in the docket and open to public inspection.

Information or advice contained in a comment submitted, other than business confidential information, may be determined by USTR to be confidential in accordance with section 135(g)(2) of the Trade Act of 1974 (19 U.S.C. 2155(g)(2)). If the submitter believes that information or advice may qualify as such, the submitter—

(1) Must clearly so designate the information or advice;

(2) Must clearly mark the material as “SUBMITTED IN CONFIDENCE” at the top and bottom of the cover page and each succeeding page; and

(3) Must provide a non-confidential summary of the information or advice.

Any comment containing confidential information must be submitted by fax to Sandy McKinzy at (202) 395-3640. A non-confidential summary of the confidential information must be submitted to www.regulations.gov. The non-confidential summary will be placed in the docket and open to public inspection.

USTR will maintain a docket on this dispute settlement proceeding accessible to the public. The public file will include non-confidential comments received by USTR from the public with respect to the dispute. If a dispute settlement panel is convened or in the event of an appeal from such a panel, the U.S. submissions, any non-confidential submissions, or non-confidential summaries of submissions, received from other participants in the dispute, will be made available to the public on USTR's web site at http://www.ustr.gov,, and the report of the panel, and, if applicable, the report of the Appellate Body, will be available on the web site of the World Trade Organization, http://www.wto.org.

Comments will be placed in the docket and open to public inspection pursuant to 15 CFR 2006.13, except confidential business information exempt from public inspection in accordance with 19 U.S.C. 2155(g)(2). Comments open to public inspection may be viewed on the www.regulations.gov Web site.