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II - Article 1 – Principles

Published online by Cambridge University Press:  12 August 2021

Philippe De Baere
Affiliation:
Van Bael & Bellis
Clotilde du Parc
Affiliation:
Van Bael & Bellis
Isabelle Van Damme
Affiliation:
Van Bael & Bellis

Summary

An anti-dumping measure shall be applied only under the circumstances provided for in Article VI of GATT 1994 and pursuant to investigations initiated1 and conducted in accordance with the provisions of this Agreement. The following provisions govern the application of Article VI of GATT 1994 in so far as action is taken under anti-dumping legislation or regulations.

Type
Chapter
Information
The WTO Anti-Dumping Agreement
A Detailed Commentary
, pp. 44 - 49
Publisher: Cambridge University Press
Print publication year: 2021

Article 1 Principles

An anti-dumping measure shall be applied only under the circumstances provided for in Article VI of GATT 1994 and pursuant to investigations initiatedFootnote 1 and conducted in accordance with the provisions of this Agreement. The following provisions govern the application of Article VI of GATT 1994 in so far as action is taken under anti-dumping legislation or regulations.

________________

1 The term ‘initiated’ as used in this Agreement means the procedural action by which a Member formally commences an investigation as provided in Article 5.

1 Introduction

  1. 105. Article 1 defines the rules of the WTO Agreement that govern the application of anti-dumping measures. In accordance with Article 1, any anti-dumping measure ‘must be consistent with Article VI of the GATT 1994 and the provisions of the Anti-Dumping Agreement’.Footnote 161

  2. 106. This provision has been understood as ‘establish[ing] a single, distinct obligation’.Footnote 162 This means that ‘the imposition of anti-dumping measures either in circumstances different from those provided for in Article VI of GATT 1994 or pursuant to investigations which have not been initiated or conducted in accordance with the provisions of the Anti-Dumping Agreement would result in a consequential violation of Article 1 of the Anti-Dumping Agreement’.Footnote 163

  3. 107. The second sentence of Article 1 clarifies that if a WTO Member takes an action according to its anti-dumping laws, the Anti-Dumping Agreement governs the application of Article VI of the GATT 1994.

2 The Consequential Nature of Claims under Article 1

  1. 108. The wording of Article 1 suggests that a violation of that provision presupposes a violation of one or more other provisions of the Anti-Dumping Agreement or Article VI of the GATT 1994. In this sense, a claim under Article 1 is necessarily consequential. The case-law confirms that the merits of a claim under Article 1 ‘depend on the outcome of other claims brought … under other provisions of the Anti-Dumping Agreement’.Footnote 164 In particular, ‘[t]he imposition of anti-dumping measures pursuant to investigations which have not been initiated and conducted in accordance with the provisions of the Anti-Dumping Agreement necessarily results in a consequential violation of Article 1 of the Anti-Dumping Agreement’.Footnote 165

  2. 109. That feature of Article 1 means that, in terms of the applicable burden of proof, ‘[i]t is particular to the nature of a consequential claim that a prima facie case is effectively made out where a complaining party establishes a violation of a substantive provision and demonstrates that the consequential claim is predicated on the substantive provision’.Footnote 166 Put differently, ‘to succeed in a claim under Article 1 of the Anti-Dumping Agreement … , a complaining Member need only establish that anti-dumping … measures were imposed and the imposing Member acted inconsistently with one of its obligations under the relevant Agreement’.Footnote 167

  3. 110. Likewise, in the context of Article 10 of the SCM Agreement (which is the equivalent of Article 1 of the Anti-Dumping Agreement), the Appellate Body in US – Anti-Dumping and Countervailing Duties (China) found that if ‘the right to impose a countervailing duty has not been established’ this means ‘that the countervailing duties imposed are inconsistent with [Article 10] of the SCM Agreement’ and that the complaining party is not required to advance further arguments to establish a consequential violation of that provision. In that case, taking into account the findings made under other provisions of the SCM Agreement, a simple request for findings by a complaining Member was sufficient to establish a consequential claim under Article 10 of the SCM Agreement.Footnote 168

  4. 111. Given the consequential character of a claim under Article 1, WTO panels often exercise judicial economy because they consider that addressing that claim is not necessary for securing a positive resolution of the dispute, if another substantive violation has already been found.Footnote 169

3 The Meaning of Anti-Dumping Measures

  1. 112. Article 1 refers to the notion of ‘anti-dumping measure’ without defining it. The Appellate Body in US – 1916 Act considered that the ordinary meaning of ‘anti-dumping measures’ in Article 1 ‘seems to encompass all measures taken against dumping’.Footnote 170 The Appellate Body did not see ‘in the words “an anti-dumping measure” any explicit limitation to particular types of measures’.Footnote 171 In particular, it considered that the second sentence of Article 1 ‘merely indicates that the Anti-Dumping Agreement implements only those provisions of Article VI of the GATT 1994 that concern dumping, as distinguished from the provisions of Article VI of the GATT 1994 that concern countervailing duties imposed to offset subsidies’.Footnote 172

  2. 113. If anti-dumping measures within the meaning of Article 1 are all measures taken against dumping, then it is necessary to read Article 1 together with Article 18.1 of the Anti-Dumping Agreement. Article 18.1 states the general obligation according to which a WTO Member’s specific action against dumping of exports from another Member can only be an action that is in accordance with the provisions of the GATT 1994 (in particular, Article VI of the GATT 1994 and the Ad Note to Article VI) as interpreted by the Anti-Dumping Agreement. In other words, measures that are not an action against dumping may not be assessed under those provisions. Conversely, measures that constitute specific action against dumping must be examined under Article VI of the GATT 1994 and the Anti-Dumping Agreement. Specific action against dumping encompasses ‘at a minimum, … action that may be taken only when the constituent elements of dumping are present’.Footnote 173 For example, the Appellate Body has found that ‘Article VI, and, in particular, Article VI:2, read in conjunction with the Anti-Dumping Agreement, limit the permissible responses to dumping to definitive anti-dumping duties, provisional measures and price undertakings’.Footnote 174 In US – 1916 Act, the Appellate Body refrained from taking a position on whether ‘specific action against dumping’ could refer to actions taken in circumstances other than those in which the constituent elements are present.Footnote 175 Certain panels consider that, apart from definitive anti-dumping duties, provisional measures and price undertakings, specific action against dumping may also take the form of a requirement to lodge bonds and cash deposits as a reasonable security for the payment of the anti-dumping duty. For example, the Panel in US – Shrimp (Thailand) found that neither the GATT 1994 nor the Anti-Dumping Agreement precludes the Ad Note to Article VI of the GATT 1994 ‘from authorizing certain types of security that are not expressly foreseen by the Anti-Dumping Agreement’.Footnote 176

  3. 114. Finally, the purpose of Article 1 is distinct from that of Article 17.4. Article 17.4 defines the three types of anti-dumping measure, which may be referred as part of the ‘matter’ to the Dispute Settlement Body: ‘definitive anti-dumping duties, the acceptance of price undertakings, and provisional measures’.Footnote 177 However, that limitation is only relevant to dispute settlement. It does not necessarily mean that only those measures fall within the scope of Article VI of the GATT 1994 and the Anti-Dumping Agreement and therefore are anti-dumping measures within the meaning of Article 1 of the Anti-Dumping Agreement.

4 The Relationship between Article VI of the GATT 1994 and the Anti-Dumping Agreement

  1. 115. The second sentence of Article 1 establishes a link between the Anti-Dumping Agreement and Article VI of the GATT 1994.Footnote 178 It states that the Anti-Dumping Agreement ‘govern[s] the application of Article VI of the GATT 1994’ in relation to measures taken under anti-dumping legislation or regulations. Article 18 of the Anti-Dumping Agreement further states that ‘no specific action against dumping can be taken except in accordance with the provisions of GATT 1994, as interpreted by this Agreement’.Footnote 179 The Anti-Dumping Agreement thus implements Article VI of the GATT 1994 and thereby imposes more specific and additional obligations with respect to the specific action that WTO Members may take against dumping.

  2. 116. In US – Shrimp (Thailand), the Panel clarified that ‘the Anti-Dumping Agreement can only govern the application of Article VI to the extent that it expressly addresses issues covered by Article VI. [T]he Anti-Dumping Agreement cannot govern the application of Article VI in respect of security for definitive anti-dumping duties if the Anti-Dumping Agreement contains no provisions expressly dealing with such security’.Footnote 180 The Panel also rejected the argument that the Anti-Dumping Agreement (or the SCM Agreement) supersedes the relevant provisions of the GATT 1994, including Ad Article VI.Footnote 181 That Panel further explained that ‘the findings in Brazil – Desiccated Coconut that Article VI may not be applied independent of, or without reference to, the Anti-Dumping Agreement simply mean (consistent with the conflict mechanism set forth in the General Interpretative Note to Annex 1A) that Article VI may not be interpreted to justify action that is prohibited by the Anti-Dumping Agreement. It is in this sense that Article VI must be applied with reference to the Anti-Dumping Agreement’.Footnote 182 Consequently, according to that Panel, if the Ad Note authorises certain conduct, and that conduct is not prohibited by the Anti-Dumping Agreement, nothing in the GATT 1994, the Anti-Dumping Agreement or the relevant jurisprudence suggests that such conduct is prohibited.Footnote 183

5 The Anti-Dumping Agreement Does Not Require WTO Members to Adopt Anti-Dumping Legislation

  1. 117. Neither Article 1 nor any other part of the Anti-Dumping Agreement requires WTO Members to enact anti-dumping legislation. In fact, several provisions of the Anti-Dumping Agreement clearly state that the disciplines set forth therein only apply with respect to those Members that decide to adopt domestic anti-dumping legislation. Article 1 of the Anti-Dumping Agreement specifies that ‘[t]he following provisions govern the application of Article VI of GATT 1994 in so far as action is taken under the anti-dumping legislation or regulations’. Furthermore, Article 13 of the Anti-Dumping Agreement provides that ‘[e]ach Member whose national legislation contains provisions on anti-dumping measures shall maintain judicial, arbitral or administrative tribunals or procedures for the purpose, inter alia, of the prompt review of administrative actions relating to final determinations and reviews of determinations within the meaning of Article 11’. This is also confirmed by the fact that several countries that have acceded to the WTO do not have any anti-dumping legislation. In fact, some of the new WTO Members, such as Tonga and Vanuatu, openly declared, at the time of their accession, that they had ‘no plans to introduce such legislation’.Footnote 184

  2. 118. However, where a Member has an anti-dumping law, that legislation must comply with its obligations under Article VI of the GATT 1994 and the Anti-Dumping Agreement. Without anti-dumping legislation that complies with Article VI of the GATT 1994 and the Anti-Dumping Agreement, a WTO Member may not lawfully impose any anti-dumping measures.Footnote 185

Footnotes

1 The term ‘initiated’ as used in this Agreement means the procedural action by which a Member formally commences an investigation as provided in Article 5.

161 Appellate Body Report, US – 1916 Act (EC), para 119.

162 Panel Report, Korea – Pneumatic Valves, para 7.547.

164 Panel Report, China – Cellulose Pulp, para 7.204; Panel Report, Russia – Commercial Vehicles, para 7.280; Panel Report, China – HP-SSST (EU), para 7.336; see also Panel Report, China – GOES, para 7.680.

165 Panel Report, Korea – Pneumatic Valves, para 7.552.

166 Panel Report, China – Broiler Products (Article 21.5), para 7.451.

167 Panel Report, China – Autos (US), para 7.368; see also Panel Report, US – 1916 Act, para 6.208.

168 Appellate Body Report, US – Anti-Dumping and Countervailing Duties (China), para 358; also Appellate Body Report, US – Softwood Lumber IV, para 143.

169 See e.g. Panel Report, Ukraine – Ammonium Nitrate (Russia), paras 7.256–7.257 (the Panel’s interpretation of Article 1 was not appealed); Panel Report, US – OCTG (Korea), para 7.336; Panel Report, US – Washing Machines, para 7.207.

170 Appellate Body Report, US – 1916 Act, para 119; see also Panel Report, US – 1916 Act (Japan), para 6.222.

171 Appellate Body Report, US – 1916 Act, para 119.

172 Footnote Ibid, fn 65.

173 Footnote Ibid, para 122 (original emphasis).

174 Footnote Ibid, para 137; also Appellate Body Report, US – Offset Act (Byrd Amendment), para 265.

175 Appellate Body Report, US – 1916 Act, para 122, fn 66.

176 Panel Report, US – Shrimp (Thailand), paras 7.97–7.98; Panel Report, US – Customs Bond Directive, para 7.114.

177 See Appellate Body Report, Guatemala – Cement I, para 79. See further below Chapter XVIII, Section 2.3.

178 See also above Chapter I, Section 3.1.

179 Emphasis added. See further below Chapter IXX, Section 2.3.

180 Panel Report, US – Shrimp (Thailand), para 7.94, fn 142; see also Appellate Body Report, US – Shrimp (Thailand) / US – Customs Bond Directive, para 8.202.

181 Panel Report, US – Shrimp (Thailand), para 7.92; Panel Report, US – Customs Bond Directive, paras 7.71–7.72.

182 Panel Report, US – Shrimp (Thailand), para 7.94; Panel Report, US – Customs Bond Directive, para 7.73.

183 Panel Report, US – Customs Bond Directive, para 7.73.

184 See Working Party Report of Tonga, WT/ACC/TON/17, WT/MIN(05)/4 (2 December 2005), para 99; Working Party Report of Vanuatu, WT/ACC/VUT/17 (11 May 2011), para 76. See also above para 79.

185 See further below Chapter IXX, Section 2.

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