Korean Request for Retaliation with Suspension of Concessions on $350mn Goods against US in Dumping Dispute Referred to Arbitration

A Korean request for authorization to retaliate against the United States in a dispute over US anti-dumping measures has been referred to WTO arbitration. The matter was discussed at a 9 August meeting of the WTO’s Dispute Settlement Body (DSB).

DS488 United States — Anti-dumping Measures on Certain Oil Country Tubular Goods from Korea

Korea told the meeting that it was disappointed with the failure of the United States to comply with the rulings and recommendations of the DSB, which had been adopted on 12 January 2018. It requested authorization to suspend concessions at an annual level equivalent to the level of nullification or impairment caused by the United States' failure to comply with the DSB rulings. Korea estimated this level to be US$ 350 million yearly, to be adjusted on an annual basis. Korea said that it will provide to the DSB the list of goods and level of tariffs in due course.

The United States referred to its communication circulated on 9 August objecting to the level of suspension of concessions proposed by Korea. Under the terms of Article 22.6 of the Dispute Settlement Understanding (DSU), the filing of such an objection automatically results in the matter being referred to arbitration; the provision does not refer to any decision by the DSB, and no decision is therefore required or possible.

Canada said that Korea's request raised systemic concerns over the sequencing of procedures for dispute settlement, noting that Korea and the United States in previous DSB meetings had disagreed over whether or not the United States had come into compliance with the DSB rulings. In Canada's view, disagreements over compliance should first be dealt with under Article 21.5 of the DSU before holding Article 22.6 proceedings to authorize the suspension of concessions.

China meanwhile said it shared Korea's concerns over the United States' failure to comply with the DSB rulings. China says such behaviour from the United States concerning its domestic anti-dumping methodologies jeopardizes the effectiveness and credibility of the dispute settlement system. It called on the US to change its course and faithfully implement the rulings of the DSB without further delay.

Korea noted that the amount mentioned in its request was estimated using available data but that it nevertheless recognized the right of the United States to refer the matter to arbitration.

Ambassador Manuel A.J. Teehankee (Philippines), who chaired the meeting in the absence of DSB chair Ambassador David Walker (New Zealand), said the DSB took note of the statements made and that the matter raised by the US had been referred to arbitration as required under Article 22.6 of the DSU.

The United States made a statement on the transparency in the proceedings of this dispute. The United States recalled that it had sought to open to public observation the panel meeting where it made its statements and that it was disappointed with Korea's objection. Korea sought to maintain the confidentiality of the US and Korean statements, the United States noted further. Korea's position is contrary to its view on transparency in other trade agreements, the US said. For the upcoming arbitration, the United States said it will again seek Korea's agreement to open the meetings and submissions to the public.

Korea said that while it places a high value on transparency, it is of the view that this must be balanced with the need to protect confidentiality in a dispute and that decisions must be made on a case to case basis. Nothing in the Dispute Settlement Understanding requires members to open proceedings to the public, Korea said. Korea said it looked forward to continuing constructive discussions on the issue.