WTO AD/CVD Decision Early Test of How Biden Admin Will Approach WTO Reform
A panel at the World Trade Organization ruled that the Commerce Department was wrong to resort to “facts available” calculations of subsidies or cost of production in many cases, either ignoring appropriately submitted information that was verifiable, not accepting information that came in past a deadline but was still timely, or not being clear in its requests to firms.
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The panel report, released Jan. 21, said that antidumping and countervailing duties on South Korean steel and large power transformers should be recalculated so that they follow WTO regulations.
Simon Lester, associate director of the Cato Institute's trade center, told International Trade Today in a phone interview that countries have challenged Commerce's use of adverse facts available or facts available “a number of times,” but this case was “the broadest assault on U.S. practice.” Lester is sympathetic to the complaints, saying, “it’s something I think it’s fair to say the Commerce Department has abused over the years.”
The South Korean government asked the WTO to forbid this kind of practice going forward, but the panel declined. “It’s not as bad a loss as it could have been,” in that regard, Lester said.
The U.S. would not have to recalculate the rates if it appeals the panel decision. Because there is no appellate body, this would be appealing into the void. “This will be an early test of how they approach things,” he said. If the U.S. chooses not to appeal, and accept the panel's decision, it would be a way of mending fences in Geneva, Lester said. “That, I think, would be a good signal that the U.S. is going to be more constructive and less obstructive at the WTO.”
The Biden administration could have its general counsel at the Office of the U.S. Trade Representative in place by the time it has to make a decision about appealing, because that position doesn't require Senate confirmation.
The U.S. won't have to say what it will do until Feb. 22, when South Korea could ask at a Dispute Settlement Body meeting for the panel's conclusions to be adopted. If the U.S. does not appeal, the panel's decision goes into effect 60 days from Jan. 21.