September 28, 2021
On September 27, 2021, in response to a request made by Japan to the World Trade Organization (WTO), the WTO Dispute Settlement Body (DSB) established a panel (first instance) under the WTO Agreement regarding China’s measure imposing anti-dumping duties on stainless steel products, which has been in place since July 2019.
On August 19, 2021, Japan requested the establishment of a panel under the WTO Agreement regarding China’s measure imposing anti-dumping duties on stainless steel products. In response to Japan’s request, a panel was established on September 27, 2021.
In July 2019, China started imposing anti-dumping (AD) duties (hereinafter referred to as the “AD measure”) on stainless steel products imported from Japan, the Republic of Korea, Indonesia, and the EU, claiming that its domestic industry was being injured by the dumped imports of such products. (The AD measure is scheduled to be in place for five years.)
Japan considers the AD measure to be inconsistent with the General Agreement on Tariffs and Trade (GATT) and the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 (the WTO Anti-dumping Agreement) due to flaws in the Chinese authorities’ determination and its investigation procedures.
Japan will pursue an appropriate solution on this issue in accordance with the rules under the WTO Agreement.
1. Request of the establishment of a panel under the WTO Agreement
- If consultations between governments fail to settle a dispute, based on a request from the complaining WTO member, a WTO panel (first instance), which is a quasi-judicial third-party organization, examines the matter in question and makes rulings regarding its consistency with the WTO Agreement. If any inconsistencies are confirmed, the panel recommends correction of the measures. Any party which is not satisfied with the panel rulings may appeal to the WTO Appellate Body (second instance).
- Under the WTO Agreement, parties concerned are required to have bilateral consultations regarding the measures in issue between the parties prior to requesting establishment of a panel under the WTO Agreement. However, if bilateral consultations have failed to settle the dispute within 60 days after the date of receipt of the request for consultations, the complaining party may request the establishment of a panel to the Dispute Settlement Body (DSB).
- Regarding the AD measure, on June 11, 2021, Japan requested a consultation with China under the WTO Agreement. On July 19, 2021, Japan and China held a consultation, but could not settle the dispute. On August 19, 2021, Japan requested the establishment of a panel under the WTO Agreement regarding China’s measure. At the DSB meeting held on August 30, a panel was not established due to the opposition of the respondent country (China). But, a panel was established at the second DSB meeting, based on the procedure that a panel shall be established at the second DSB meeting except in the case of all the WTO Members’ opposition by consensus (Article 6.1 of UNDERSTANDING ON RULES AND PROCEDURES GOVERNING THE SETTLEMENT OF DISPUTES).
2. Stainless steel products (the products in question)
The AD measure covers stainless steel slabs, hot-rolled stainless steel sheets (cut sheets and plates), and hot-rolled stainless steel coils. Stainless steel slabs are semi-processed products that are obtained by casting refined melted steel. Hot-rolled stainless steel sheets are used in industrial machinery and as construction materials for structures such as ships and bridges. Uses of hot-rolled stainless steel coils include use as semi-finished products of cold rolled stainless steel products for automotive parts and household electric appliances.
3. Anti-dumping duty
An anti-dumping duty is a customs duty imposed on a certain product by an importing country where it is demonstrated that the export price of the product is less than its selling price destined for consumption in the exporting country and the dumped imports are causing injury to the competing industry in the importing country. The value of the anti-dumping duty cannot exceed the difference between the export price of the product in question and its domestic selling price in the exporting country.
4. Total value of exports of the products in question from Japan to China
The total value of exports of stainless steel from Japan to China is approximately 70 billion yen per year, of which exports of the products subject to the AD measure account for approximately 9.2 billion yen (both figures as of 2019).
5. Previous press releases regarding this matter
Japan Requests Consultations with China under the WTO Agreement Regarding China’s Measure Imposing Anti-Dumping Duties on Stainless Steel Products Originating from Japan.