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WTO Ruling Could Make it Harder to Fight Unfair Trade, Steel Industry Warns

Thursday, December 11, 2014
Sandler, Travis & Rosenberg Trade Report

The U.S. steel industry is warning that a ruling by the World Trade Organization Appellate Body this week could hamper the United States’ ability to combat imports that benefit from illegal subsidies. In what has been called one of the most complicated decisions it has ever handled, the WTO Appellate Body reportedly rejected most of the more than 80 challenges in India’s appeal of a dispute settlement panel ruling concerning U.S. countervailing duties on certain hot-rolled carbon steel flat products from India but upheld others, yielding a decision that U.S. trade officials again described as “mixed.”

The Appellate Body reversed the panel in ruling that the Department of Commerce’s determination that one Indian entity constituted a public body and is thus subject to WTO subsidy disciplines is inconsistent with WTO rules, largely upheld the panel’s finding that the DOC may include new subsidy programs in CV duty administrative reviews, and agreed with the panel in rejecting most of India’s claims against U.S. CV duty laws and regulations “as such” under the WTO Agreement on Subsidies and Countervailing Measures. The Office of the U.S. Trade Representative indicated that the Appellate Body also sided with the U.S. on the use of “facts available” when responding companies fail to cooperate with an investigation and benchmark calculations used to determine whether a subsidy has conferred a benefit.

The Appellate Body also upheld the dispute panel’s ruling that a U.S. statutory provision allowing for cross-cumulation, which is the cumulative assessment of the impact of dumped and subsidized imports as part of the International Trade Commission’s injury determinations, is inconsistent with WTO rules in one respect. Similarly, the Appellate Body agreed that the use of this method in the hot-rolled steel case at issue was improper.

American Iron and Steel Institute President and CEO Thomas Gibson said the cross-cumulation decision “significantly weakens the effectiveness of U.S. trade laws” and “will make it very difficult for domestic industries to obtain an effective remedy when facing both dumped and subsidized imports at the same time.” AISI said that while this week’s ruling focused on specific CV duty measures against steel products from India it “will likely have consequences for a number of other trade cases as well.”

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