WORLD TRADE WT/DS89/1
G/ADP/D5/1
ORGANIZATION G/L/171
16July1997
(97-2964)
Original: English
UNITED STATES -IMPOSITION OFANTI-DUMPING DUTIES
ONIMPORTS OFCOLOUR TELEVISION RECEIVERS FROM KOREA
Request forConsultations byKorea
Thefollowing communication, dated 10July1997, fromthePermanent Mission ofKorea to
thePermanent Mission oftheUnited States andtotheDispute Settlement Body, iscirculated in
accordance withArticle 4.4oftheDSU.
_______________
Myauthorities have instructed metorequest consultations withtheGovernment ofthe
United States pursuant toArticle 17.3oftheAgreement onImplementation ofArticle VIofGATT 1994
(A-D Agreement), Article 4oftheUnderstanding onRules andProcedures Governing theSettlement
ofDisputes (DSU) andArticle XXII ofGATT 1994, regarding theimposition ofanti-dumping duties
bytheUnited States onimports ofcolour television receivers (CTVs) from theRepublic ofKorea.
Factual Summary
1. TheUnited States haslevied A-Dduties onimports ofKorean CTVs fromApril 1984 tothe
present. During thisperiod, Korean CTV makers moved much oftheir production abroad and,
since 1991, exports ofKorean-made CTVs totheUnited States haveceased. Furthermore, ademinimis
dumping margin oflessthan0.5%, asdefined intheUSTariff Act,hadbeenassessed onCTVs made
inKorea bySamsung Electronics Co.Ltd(Samsung) forthesixyearperiod from April 1985 until
thetimewhen theproduct ceased tobeimported intotheUnited States inearly 1991.
2. Thus,forthepasttwelveyears(fromApril1985tothepresent),theUnitedStateshasmaintained
anA-Dorder onSamsung 'sCTVs despite theabsence ofdumping andthecessation ofexports from
Korea, butithasnever examined thenecessity ofcontinuing toimpose those duties. Samsung 'sfour
applications forrevocation review based onitshistory ofnodumping were allrejected onmere
procedural, rather thansubstantive, grounds concerning thetiming ofsuchapplications. Thefifth
application forrevocation review filedbySamsung on20July1995wasnotacted uponfor11months
withnolegitimate justification given forthedelay. Since theUnited States 'eventual decision on
24June1996 toinitiate thereview, overoneyearhaselapsed without anydefinitive result. The
Government oftheUnited States hasexplained thattheresult ofthisreview mustawait theoutcome
ofcircumvention proceedings initiated in1996.
3. Apart fromthisfailure toreview theneedforthecontinued imposition oftheA-Dduties, the
United States decided, on19January 1996, toinitiate acircumvention investigation byreceiving a
petition from certain USlabour unions. Eighteen months havesince passed without adetermination
onthismatter.WT/DS89/1
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A-Dmeasures andreviews
4. Inprinciple, maintaining A-Dduties onimports which cause nomaterial injury (inthiscase,
duetotheabsence ofdumping andthecessation ofexports) contravenes Article VI.6(a) ofGATT 1994
andArticle 11.1oftheA-DAgreement. Inaddition, certain other actions bytheUnited States violate
various provisions oftheA-DAgreement, including Articles 3.1,3.2,5.8and11.4.
5. Articles VI.1andVI.6(a) ofGATT 1994andArticles 1and11.1oftheA-DAgreement stipulate
thatA-Dmeasures shallbeapplied onlyifthereisdumping andifitcauses orthreatens material injury.
They alsoestablish theimportant principle thatA-Dmeasures shallbeapplied totheminimum extent
necessary, specifying thatA-Dduties shallremain inforce onlyaslongasandtotheextent necessary.
6. Therefore, itisacontravention ofArticle VIofGATT 1994 andArticle 11.1oftheA-D
Agreement thattheUnited States hasmaintained A-Dduties forthepasttwelve years. Theorder should
havebeenrevoked inlightoftheabsence ofSamsung 'sdumping anditssubsequent cessation ofexports
ofCTVs totheUnited States fromKorea. Under thesecircumstances, thereisnoconceivable possibility
ofdumping andmaterial injury.
7. Thelackofmaterial injury isclear when thecircumstances areassessed under theA-D
Agreement 'sguidelines todetermine theeffect ofimports onthedomestic industry, provided forin
Articles 3.1and3.2oftheAgreement. Article 3.1states thatadetermination ofinjury shallinvolve
anobjective examination ofboth(a)thevolume ofthedumped imports andtheeffect ofthedumped
imports onprices, and(b)theconsequent impact ondomestic producers ofthelikeproduct. Article 3.2
providesthatwithregardtothevolumeofthedumpedimports,theinvestigatingauthoritiesshallconsider
whether therehasbeenasignificant increase indumped imports. Consequently, theabsence ofdumping
forsixyears andthecessation ofexports forthesubsequent sixyears fullydemonstrate that,under
thestandards setoutinArticles 3.1and3.2,there canbenoinjury. Inthisregard, theUnited States
isinviolation ofArticles 3.1and3.2oftheA-DAgreement.
8. WithregardtoCTVsmanufacturedbySamsung,theexistenceofdumpingcannotbesubstantiated
since thecompany hasbeenassessed diminimis margins forsixconsecutive years through theUS
Department ofCommerce 'sannual administrative reviews.
9. Article 5.8oftheA-DAgreement, which demands immediate termination ofaninvestigation
inthecaseofdeminimis dumping margins, isrelevant totheapplication ofArticle 11.2, which provides
forrevocation ofanA-Dorder ifitisnolonger necessary tocounteract dumping. Having found
deminimis margins forSamsung forsixconsecutive years through itsannual reviews, theUnited States
should haveimmediately initiated arevocation review onitsowninitiative under Article 11.2and,
consequently, terminated itsA-Dorder pursuant toArticles 5.8and11.2upon thecompletion ofthis
review.
10. Theprovision oftheUSTariff Actwhich defines ademinimis margin oflessthan0.5% as
eligible forrevocation isincontravention ofArticle 5.8oftheA-DAgreement which stipulates a
deminimis margin oflessthan2%.
11. Inorder toimplement Article 11.1oftheA-DAgreement, Article 11.2ofthesame agreement
specifies thattheauthorities shallreview theneedforthecontinued imposition ofA-Dduties ontheir
owninitiative, oruponrequest byanyinterested party. Thus, despite thefactthatthere isnomaterial
injury and(inSamsung 'scase) nohistory ofdumping, theUnited States hasneglected itsobligation
toself-initiate arevocation review, asrequired inthefirstsentence ofArticle 11.2. Moreover, theWT/DS89/1
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United States hasrefused toconsider Samsung 'srepeated requests forrevocation, insisting onstrict
adherence toprocedural provisions ofUSdomestic regulations (missing intheA-DAgreement), and
hasalsofailed toactonSamsung 'srequest forachanged circumstances review foreleven months -
actsthatallviolate thesecond sentence ofArticle 11.2byunduly restricting theright ofinterested
parties torequest areview forthepurpose ofobtaining revocation.
12. Byfailing toself-initiate arevocation review andbyrestricting Samsung 'sright torequest
areview, theUnited States hasevaded itsArticle 11.2obligations. Asaconsequence, itstillmaintains
A-Dduties, which, ifreviewed, should havebeenrevoked pursuant tothethirdsentence ofArticle 11.2.
Allofthese actions alsoconstitute aviolation ofArticle 11.1oftheA-DAgreement.
13. Inaddition, thefailure toreach adetermination thusfarintheCommerce Department 's
revocation review initiated on24June1996alsoviolates Article 11.4, which provides forexpeditious
conclusion ofsuchreviews within thenormal 12months oftheirinitiation.
Circumvention investigation
14. Thecircumvention investigation initiated on19January 1996isincontravention ofArticle VI
ofGATT 1994 andArticle 1oftheA-DAgreement, andshould thusbeimmediately terminated.
15. Article VI.1ofGATT 1994 defines dumping astheintroduction ofproducts ofonecountry
intothecommerce ofanother country atlessthannormal value, andArticle 2.1oftheA-DAgreement
defines itasasituation inwhich theexport price oftheproduct exported fromonecountry toanother
islessthanthecomparable price forthelikeproduct intheexporting country.
16. Itisclearfromtheseprovisions thatifanother country becomes theexporting country, dumping
should beseparately determined because thischange would result inaconsequent change ofthetwo
basic parameters indetermining whether there isdumping: anexport price andanormal price inthe
exportingcountry.Nonetheless,byeffectivelyconsideringexportsfromKoreaandexportsfromMexico
andThailand asidentical through itscircumvention concept, theUnited States misinterpreted thebasic
conceptofdumpingestablishedthroughouttheGATTandtheA-DAgreement,thusapparentlyviolating,
inparticular, Article VI.1ofGATT 1994 andArticle 2oftheA-DAgreement.
17. Itis,therefore aviolation ofArticle VIofGATT 1994 andArticle 1oftheA-DAgreement
toinitiate acircumvention investigation asanextension ofexisting A-Dmeasures without initiating
anewdumping (andinjury) investigation under theGATT andtheA-DAgreement.
18. Setting aside issues ofprinciple, theUScircumvention investigation violates many provisions
oftheA-DAgreement, including Articles 3.1,3.6,4.1,5.4and5.10.
19. Labour unions suchastheInternational Brotherhood ofElectrical Workers andothers, the
petitioners ofthecircumvention investigation inquestion, arecomposed ofemployees ofassemblers
andproducers ofadiverse variety ofelectric orelectronic products. Therefore, theycannot besaid
torepresent employees ofthedomestic industry ofthelikeproduct, namely, CTVs.
20. TheUSauthorities neglected toexamine thepetitioners 'representativeness ofthedomestic
industry, andfurther refused Korean companies 'request forsuchanexamination, thusviolating
Articles 3.1,3.6,4.1and5.4oftheA-DAgreement.WT/DS89/1
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21. Failure tomake adetermination intheongoing investigation after18months alsoviolates
Article 5.10oftheA-DAgreement.
Linkbetween therevocation review andthecircumvention investigation
22. Itwasarbitrary andillogical fortheUnited States toquickly respond totherequest fora
circumventioninvestigationwhiledelayingforoneyearitsresponsetoSamsung'srequestforarevocation
review. Thisaction isallthemore questionable, given thatacircumvention investigation, evenifit
were tobejustified under theWTO Agreement, canonlybeundertaken ifthere isanA-Dorder to
circumvent.
23. Furthermore, theKorean Government believes thatitisunreasonable fortheUnited States
toinvestigate thealleged circumvention without firstverifying thejustification oftheA-Dorder.
Similarly, theattempt tolinktheresults ofthecircumvention investigation withtherevocation
determination constitutes afurther breach oftheproper procedural sequence. Indeed, adecision by
theUSauthorities torevoke theA-Dorder against theKorean CTVs would remove thelegalbasis
fortheanti-circumvention investigation, which would needtobeterminated forthwith.
24. Thus,extendingthereviewperiodbymakingtheabove-mentionedlinkageconstitutesaviolation
ofArticle 11.1oftheA-DAgreement. ThisArticle isinterpreted torequire theimmediate termination
oftheA-Dorder intheabsence ofdumping which iscausing injury.
Inlightoftheabove, theGovernment ofKorea considers thatthebenefits accruing toitunder
GATT 1994 andtheA-DAgreement arebeing nullified orimpaired bytheUSactions regarding the
A-Dandrelated measures against imports ofCTVs from Korea.
TheGovernment ofKorea reserves itsrights toraise anyadditional factual orlegal points
concerning thisissue during theconsultations.
Ilookforward toreceiving yourreply tothisrequest andtofixing amutually convenient date
forconsultations.