WTO Says China's AD on Japanese Steel Products Violated Global Trade Rules

A dispute panel at the World Trade Organization ruled this week that China's antidumping duties on stainless steel products from Japan violated global trade commitments. The ruling held a mix of findings for and against Japan's claims, leading each side to claim some form of victory.

China's Ministry of Commerce (MofCom) said it welcomes the panel's support for its claims related to the cumulative assessment of the impact of imports and the handling of confidential information, but it disagrees with rulings on issues including price impact and non-attribution analyses, according to an unofficial translation. The ministry said it would follow up "in accordance with WTO rules."

Japan's Ministry of Economy, Trade and Industry said it will "continue to request that China withdraw its measure," adding that the report upheld its claims that China bring the measure into conformity with the WTO commitments.

The panel said Japan proved MofCom's domestic industry determination violated the Anti-Dumping Agreement by failing "to provide a reasoned and adequate explanation of its finding that the production of the firms included in the domestic industry represented a 'major proportion' of the total production of all Chinese producers." Japan also established that MofCom's consideration of price effects violated the AD agreement because the ministry's findings on price comparability and price depression "were not based on an objective examination of positive evidence."

China also violated articles 3.1 and 3.4 of the agreement in the way it looked at "domestic market share, trends in sales prices, capacity utilization and ending inventory," the panel said. Japan showed MofCom's causation analysis violated the AD agreement because it relied on MofCom's price effects and impact analyses and was not based on positive evidence "in respect of the increase in nickel prices since mid-2016," the report explained. The panel also said China violated the agreement by failing "to disclose certain essential facts under consideration that formed the basis for its price effects analysis and its causation determination."

The panel also ruled against a host of Japan's claims, including its argument China violated the AD deal in finding a cumulative assessment of the imports' effects was appropriate given the competition conditions between the imports and the domestic like product. Japan also did not establish that MofCom's non-attribution analysis related to the decrease in nickel price from May 2014 to 2015 and imposition of stricter environmental standards violated parts of the AD agreement. Japan again failed to show MofCom violated the deal when it accepted that the good cause presented by the applicant for the duties justified redacting company names at the time of the application.