mS SS 9876 CHAPTER 7 ¢ Trade in Goods ‘Agreement on Import- Licensing Procedures Requires thatthe import: licensing procedures of WTO member states be neutral in their application ‘and tat they be adminis tered in fair and equi ‘able manner, ‘Agreement on implemen {ation of tite VI of GATE 1994 (Anti-dumping ‘Code): Allows WTO miem- ber states to counter dump: ing through the application cof anti-dumping duties. dumping: Selling exported ‘pods at prices Below their normal value the volume or value of an enterprise's imports by linking them to the volume or value of ig exports (“trade-balancing requirements”) or by correlating an enterprise's access to foreign exchange to its foreign exchange earnings (“foreign exchange balancing restrictions”) 1°” IMPORT-LIGENSING PROCEDURES Because licensing requirements may restrict or distort trade, the Agreement on Import: Licensing Procedures seeks to ensure that import-licensing procedures are neutral in the application and administered in a fair and equitable manner." Forms and procedures are be as simple as possible and applicants should have to deal only with a single administrat body. Import licenses are not to be denied because of minor errors in completing the ap plication:!” nor are imports to be barred because of minor deviations in the value, quantity or weight designated on the license." ANTI-DUMPING ‘The Agreement on Implementation of Asticle VI of GATT 1994, or the Anti-dumping Co replaces codes negotiated during the Tokyo and Kennedy Rounds. The current code defn ‘dumping in the following way: {A producti tg be considered dumped, ie. introduced into the commerce of another country at los than its normal value, ifthe export price of the product exported from one country to ‘another i less than the comparable price, in the ordinary course of trade, forthe like prod: ‘uct when destined for consumption in the exporting country.””* For several years the United States and Canada have been involved ina dispute over the {importation of softwood lumber into the US. After many hearings before WTO dispute set: tlement bodies, the WTO Appellate Body issued its final decision in 2006. The US. Departs ment of Commerce (DOC) had placed anti-dumping duties on Canadian softwood lumber exporters, which were challenged by Canada, as violative of WTO rules. After a rating in favor of Canada, the US. DOC had calculated new rates, but those were then challenged by ‘Canadian authorities After several hearings, the WTO Appellate Body found that the DOC. ‘calculations, which used a so-called “zeroing” method, violated the WTO anti-dumping rules 7 and must be changed. The “Zeroing” approach takes into account imports which enter the ‘county at prices deemed to be below a “dumping” threshold, bt ignores any shipments of the same produet which come in at higher prices. 7? Significantly, the Anti-dumping Code does not prohibit dumping. It recognizes i that the dumping of imports may be countered through the application of anti-dumip duties, bt only ifen investigation determines that the dumped imports cause or teat ‘cause material injury to, or materially retard the establishment of, a domestic indi within the importing country.'" A domestic industry s defined by the code as the 49 producers as a whole of like products or those domestic producers whose collective ou Of products makes up # major share ofthe total output of such produets wil state." 4 ‘ir, Anwex, paras. 1-2. ‘We Agrooment on Import Licensing Procedures Ariel ‘td, paras 5-6 "ra, pae.7. ud, para 8 ‘mgrbement on Lmplementation of Article VI of GATT 1934, Article 2 par. Pig WTO Appellate Body Isues Compliance Report for US/Canada Lumber Dispute, Iverationa Update, VoL 12 September 2006p. 176 and sso WTO Rules Outlaw "Zeroing in Anti-dumping Ces rope 2204 (Apr 21,2008). Hid, Artie 3.0.9. 13d Article 4 para. ar. 3 (199),I CHAPTER 7 ¢ Trade inGoods 377 An investigation to determine the existence, degree, and effect of an alleged dumping ‘may be initiated (1) “upon a written application by or on behalf of the [affected] domestic industry”; (2) “in special circumstances” by governmental authorities of the affected state; or (3) by an application made by authorities of an affected third country. In any of these cases, the application must disclose evidence showing (1) dumping, (2) material in- jury or threat of injury to, or material retardation to the establishment of, a domestic indus- ‘ry, and (3) a causal link between the dumped imports and the alleged injury.” ‘The authorities carrying out an investigation must give all interested parties notice of | : the investigation, an opportunity to present written evidence, and the opportunity to exam- ine and rebut adverse evidence.'®? Even so, the investigation is to be carried out expedi- tiously, and the procedures that allow interested parties to participate may not be used by the parties as a means of delaying the investigation, reaching a preliminary or final decision, or applying provisional or final anti-dumping measures.*! e Provisional measures (i.e, the imposition of a provisional anti-dumping duty or the de- i [ posit of a security equal to a provisionally estimated anti-dumping duty) may be imposed q after an investigation has been initiated, a preliminary determination has been made of ‘ dumping and consequential injury to a domestic industry, and the authorities concerned be- iy lieve that such measures are necessary to prevent injury being caused during the course of the investigation, ®? Final anti-dumping duties may be imposed at the discretion of the au- thorities concemed upon the completion of an investigation and a final determination that = ‘dumping, injury, and a causal link between them exist.® i ‘The monetary amount of an anti-dumping duty may not exceed the difference between i, 4 product's normal value (i.e. the price charged for the same or similar products exported | to third countries, or their cost of production plus a reasonable amount for administrative and other costs and for profits) and the price at which it was actually exported.'™ Such 4 a duty may remain in force as long as necessary to counteract dumping that is causing injury. Dumping investigations are lengthy, complex procedures that involve many hearings, | ; ‘much fact-finding, and actions by several different admis and courts. The F procedure in the United States is explained in Case 7-5. ‘etd Amite Spare. Wr Ail 5, para. 6. p 81d Artile 14, para F 91d Atiele 5 paras 2nd 6;and Article een de minimis, oF [if] the volume of dumped imports, actual or potential, or the injury, s negligible. The margin of ® ‘dumping shall be considered tobe de minions it this margins less than 2 percent expressed asa percentage of the ‘export price. The volume of dumped imports shall nomally be reparded ae negligible if the volume of dumped {imports from a particular country is found to account for less than 3 percent of imports ofthe like producti the importing country unless countries which individually account for ies than 3 perecat of the import ofthe ike product nthe importing country collectively account for mare than 7 percent of imports ofthe ike product i the e {poring country” 74, Article 3,pare.8 | 7 Wa, Article 6 paras 1-2. terested partie inciude“() an exporter or foreign producer or the importer ofa product subject to invest- tation, ora trade or business association a majority ofthe members of which are producers exporters rine Porters of such product i) the government ofthe exporting country and (il). producer ofthe like product in the importing country ora trade and busines association 4 majority ofthe members of which produce the like i roduct in the importing country" 2d, para 1 4 "74, para 14 "ja, Article 7,paras. 1-3. "91d, Article 9, para. 41d, Article 9,para.3;and Article 2. : 851d, Arie 11 para 1 : Reviews must beheld perioticaly end, if no review i conducted for a five-year period, the duty will auto- ‘matically terminate ld, Arle Il,pares 2 and 3 ’-dumping duties wil be imposed ifthe margin of dumping is |378 CHAPTERT ¢ Trade in Goods 1 Case 7-5 NIPPON STEEL CORPORATION v. UNITED STATES United States Court of Appeals for the Federal Circuit Decidled: August 10,2006 MICHEL, CHIEF JUDGE ‘The United States and Mittal Stee! USA ISG Inc. (“Mittal”) appeal the decision of the United States Court of Inter- national Trade (“trade court”) instructing the United States International Trade Commission (“Commission”) to issue a determination that the domestic industry was not materially injured by less-than-fair-value (“LTFV”) imports of tin- and chromium-coated steel sheets (TOCSS") from Japan. ‘This anti-dumping case has a procedural history spanning six years, which now in- cludes four determinations by the Commission, four opinions from the Court of International Trade, and one prior opinion from this court. Appellants argue that the Court of International ‘Trade erred in Nippon IV by reweighing the facts and sub- stituting its own credibility determinations, in contraven- tion of law and this court’s remand instructions in Nippon Steel Corp. v. Int'l Trade Comm'n, 345 F3d 1379, 1380 (Fed. Gir. 2003) (“Nippon Li”). Appellants further argue that the Court of International Trade erred in holding in Nippon IV—that the Commission's affirmative material injury determination in its second remand determination, ‘was supported by less than substantial evidence. We agree. Accordingly, we reverse the Court of In- ternational Trade’s decisions in Nippon IV and Nippon YV, and instruct the trade court to vacate the Commis- sion’s negative material injury and negative threat of ‘material injury determinations and reinstate the Com- mission's affirmative material injury determination. L A Brief History of This Case In 2000, the Commission made a final determination that the domestic industry was materially injured by ‘TOCSS dumping from Japan, which required considera tion of import volume, price effects, impact on domestic producers, and causation. Nippon Steel Corporation, NKK Corporation, Kawasaki Steel Corporation, and Toyo Kohan Co., Ltd. (collectively, “Nippon”) sought review in the Court of International Trade, which sus- tained the Commission's finding of a small but signifi- cant volume, but remanded for a reevaluation of price effects and causation. Nippon Steel Corp. v. United States, 182 B Supp. 24 1330, 1340, 1356 (Ct. Intl Trade 2001) (“Nippon I’). ‘On remand, the Commission again made an affim tive material injury determination. Nippon again appe and the Court of International Trade found lingering fay in the Commission's analysis of price effects and causa ("Nippon 17"). However, rather than remand for furth proceedings, the court vacated the affirmative material in jury determination and directed the Commission to enter negative material injury determination. The court dectin toremand because it stated, the Commission had “demo strated an unwillingness or inability to address the sub tial claims made by the respondents or the concen expressed by the court in Nippon I.” ‘The Commission then appealed to this court Wi facated the decision of the Court of International Tra ‘Nippon Il and ordered a remand to the Comnisi for additional data gathering and analysis. (Nippon Il 345 F.3d at 1380. We explained that “to the extent [hil ‘the Court of International Trade engaged in refindg the facts (eg, by determining witness credibility), ori terposing its own determinations on causation and rial injury ... [it] exceeded its authority”, and held the trade court abused its discretion by declining 1 mand the case to the Commission. ‘On the second remand, the Commission yet & ‘made an affirmative material injury determination N ppon sought review once more, and the Court of Inte tional Trade remanded fora third time, again i the Commission to enter a negative material i determination. (Nippon IV), 350 F. Supp. 24. at 118 addition, the trade court directed the Commission 2 termine whether the domestic industry was thrall ‘with material injury. 3 ‘The Commission entered a negative material il determination on the third remand, stating: “thi come is dictated by the Court's findings in Nippanl {s not, however, the determination we would haveT in the absence of those findings.” In its deciia Commission expressed its concer about the the Court of International Trade, stating that “we that the trade court has committed the same mi identified by the Federal Circuit in Nippon IT ‘ample, the Court has again re-found facts by substi its view of the record for that of the Commissio# has also rejected the Commission's witness