United States – Anti-Dumping Measures on Certain Oil Country Tubular Goods from Korea
REPORT of the panel
BCI
deleted, as indicated [[***]]
TABLE OF CONTENTS
1 Introduction.. 12
1.1 Complaint by Korea. 12
1.2 Panel establishment and composition. 12
1.3 Panel proceedings. 13
1.3.1 General 13
1.3.2 Additional working procedures on
Business Confidential Information (BCI) 13
2 Factual aspects. 13
2.1 The measures at issue. 13
3 Parties' requests for
findings and recommendations. 14
4 Arguments of the
parties. 16
5 Arguments of the thiRd
parties. 16
6 interim review... 16
7 findings. 16
7.1 General principles regarding treaty
interpretation, the standard of review, and burden of proof 16
7.1.1 Treaty interpretation. 16
7.1.2 Standard of review.. 17
7.1.3 Burden of proof 18
7.2 Whether the "viability test" is
inconsistent with Article 2.2 of the Anti-Dumping Agreement 18
7.2.1
Provision at issue. 19
7.2.2 Whether the "viability test"
is as such inconsistent with Article 2.2 of the Anti‑Dumping Agreement 19
7.2.2.1 Main arguments of the parties. 19
7.2.2.2 Main arguments of third parties. 20
7.2.2.3 Evaluation by the Panel 20
7.2.3 Whether the "viability test"
as applied in the underlying investigation is inconsistent with Article 2.2 of
the Anti-Dumping Agreement 21
7.2.3.1 Main arguments of the parties. 21
7.2.3.2 Evaluation by the Panel 22
7.2.4 Conclusion. 22
7.3 Whether the USDOC's determination of
profit rates for the Korean respondents in the final and remand determinations
is inconsistent with Articles 2.2.2 and 2.4 of the Anti-Dumping Agreement 22
7.3.1 Provisions at issue. 23
7.3.2 USDOC's profit rate determination in
the underlying investigation. 23
7.3.2.1 Whether the USDOC's failure to use "actual data" as a CV
profit source is inconsistent with Article 2.2.2 24
7.3.2.1.1 Main arguments of the parties. 24
7.3.2.1.2 Main arguments of third parties. 25
7.3.2.1.3 Evaluation by the Panel 25
7.3.2.1.3.1 The USDOC's rejection of actual
data pertaining to the Korean respondents' domestic market sales of the
like product during the period of investigation because these sales were made
in "low volumes" 26
7.3.2.1.3.2 Alleged lack of actual profit
data pertaining to the respondents' domestic market sales of the like product,
in the USDOC's record in the underlying investigation. 27
7.3.2.1.3.3 Rejection of data showing [[***]]
in determining the amounts for "profits" for constructed normal value. 29
7.3.2.1.4 Conclusion. 29
7.3.2.2 Whether the USDOC's interpretation and application of "same
general category of products" was inconsistent with Articles 2.2.2(i)
and 2.2.2(iii) 30
7.3.2.2.1 Main arguments of the parties. 30
7.3.2.2.2 Main arguments of third parties. 30
7.3.2.2.3 Evaluation by the Panel 30
7.3.2.3 Whether the USDOC's use of profit
data from the Tenaris financial statements in constructing normal value was a
"reasonable method" within the meaning of Article 2.2.2(iii) 34
7.3.2.3.1 Main arguments of the parties. 34
7.3.2.3.2 Main arguments of third parties. 35
7.3.2.3.3 Evaluation by the Panel 35
7.3.2.4 Whether the USDOC acted
inconsistently with Article 2.2.2(iii) and Article 2.2 by failing to
calculate and apply a profit cap. 39
7.3.2.4.1 Main arguments of the parties. 39
7.3.2.4.2 Main arguments of third parties. 39
7.3.2.4.3 Evaluation by the Panel 40
7.3.2.5
Whether the USDOC acted inconsistently with Article 2.4 of the Anti-Dumping
Agreement by failing to make due allowance for differences in the profit rates
reflected in the constructed normal value and the export price. 41
7.3.2.5.1 Main arguments of the parties. 41
7.3.2.5.2 Evaluation by the Panel 42
7.3.2.6 Conclusions. 42
7.3.3 The USDOC's profit rate determination
in the remand investigation. 42
7.3.3.1 Main arguments of the parties with
respect to the Panel's jurisdiction. 43
7.3.3.2 Evaluation by the Panel 44
7.4 Whether the USDOC's decision to construct
NEXTEEL's export price was inconsistent with Article 2.3 of the Anti-Dumping
Agreement 47
7.4.1 Provision at issue. 48
7.4.2 Factual background. 48
7.4.3 Main arguments of the parties. 49
7.4.4 Main arguments of the third parties. 49
7.4.5 Evaluation by the Panel 49
7.4.5.1 Whether the USDOC's conclusion of
association between the concerned entities was inconsistent with Article 2.3. 51
7.4.5.1.1 Meaning of "association"
under Article 2.3. 51
7.4.5.1.2 The USDOC's conclusions regarding
association. 51
7.4.5.1.2.1 NEXTEEL's purchases and
consumption of steel coils during the POI and USDOC's inferences based on the
nature of services provided by [[***]] to
NEXTEEL during the production process of OCTG 53
7.4.5.1.2.2 Marketing and technology
collaboration between POSCO and NEXTEEL. 54
7.4.5.1.2.3 [[***]]
in US sales through Company A and Company B. 55
7.4.5.1.2.4 The USDOC's overall conclusion of
association within the meaning of Article 2.3. 55
7.4.5.2 Whether the USDOC erred in not
considering evidence allegedly pertaining to the reliability of the export
price. 56
7.4.6
Conclusion. 57
7.5 Whether the USDOC's decision to reject
the price at which NEXTEEL purchased steel coils from POSCO was inconsistent
with Article 2.2.1.1 of the Anti-Dumping Agreement 57
7.5.1 Provisions at issue. 58
7.5.2 Factual background. 58
7.5.3 Main arguments of the parties. 58
7.5.4 Main arguments of the third parties. 59
7.5.5 Evaluation by the Panel 59
7.6 Whether the USDOC acted inconsistently
with Articles 6.2, 6.4, and 6.9 of the Anti‑Dumping Agreement 61
7.6.1 Provisions at issue. 62
7.6.2 Whether the USDOC acted inconsistently
with Articles 6.2, 6.4, and 6.9 in connection with the Tenaris financial
statements. 62
7.6.2.1 Main arguments of the parties. 62
7.6.2.2 Main arguments of third parties. 63
7.6.2.3 Evaluation by the Panel 64
7.6.2.3.1 Whether the USDOC acted
inconsistently with Article 6.2 in not disclosing, until its final
determination, that it had accepted the Tenaris financial statements on the
record. 64
7.6.2.3.2 Whether the USDOC acted
inconsistently with Article 6.4 in not disclosing, until its final
determination, that it had accepted the Tenaris financial statements on the
record and that it was using those statements in determining CV profit 67
7.6.2.3.3 Whether the USDOC acted
inconsistently with Article 6.9 in not disclosing, until its final
determination, that it had accepted the Tenaris financial statements on the
record and that it relied on those statements in determining CV profit 68
7.6.2.4 Conclusion. 70
7.6.3 Whether the USDOC acted inconsistently
with Articles 6.4 and 6.9 in connection with the disclosure of certain
communications. 71
7.6.3.1 Main arguments of the parties. 71
7.6.3.2 Main arguments of third parties. 72
7.6.3.3 Evaluation by the Panel 72
7.7 Whether the USDOC's decision to limit its
examination to NEXTEEL and HYSCO was inconsistent with Articles 6.10 and 6.10.2
of the Anti-Dumping Agreement 74
7.7.1 Provisions at issue. 74
7.7.2 Factual background. 75
7.7.3 Main arguments of the parties. 75
7.7.4 Main arguments of the third parties. 75
7.7.5 Evaluation by the Panel 76
7.7.5.1 Article 6.10 of the Anti-Dumping
Agreement 76
7.7.5.1.1 The USDOC's determination that it
would be "impracticable" to examine all known exporters 76
7.7.5.1.2 The USDOC's decision to limit its
examination to two mandatory respondents. 78
7.7.5.2 Article 6.10.2 of the Anti-Dumping
Agreement 79
7.7.6 Conclusion. 82
7.8 Whether the USDOC acted inconsistently
with Article 12.2.2 of the Anti‑Dumping Agreement by failing to provide reasons
for rejecting certain arguments. 82
7.8.1 Provisions at issue. 82
7.8.2 Main arguments of the parties. 82
7.8.3 Main arguments of third parties. 83
7.8.4 Evaluation by the Panel 83
7.8.4.1 The USDOC's alleged failure to
address the Korean respondents' arguments concerning the use of the Tenaris
profit data. 85
7.8.4.2 The USDOC's alleged failure to
address NEXTEEL's arguments that it was not affiliated with POSCO, Company A,
and Company B. 87
7.8.5 Conclusion. 88
7.9 Whether the USDOC acted inconsistently
with Article X:3(a) of the GATT 1994 in the administration of US laws and
regulations. 88
7.9.1 Provisions at issue. 89
7.9.2 Main arguments of the parties. 89
7.9.3 Main arguments of the third-parties. 90
7.9.4 Evaluation by the Panel 90
7.9.4.1 Whether the USDOC's alleged deviation
from established agency practice for determining CV profit is within the
Panel's terms of reference. 90
7.9.4.2 Whether the USDOC failed to
administer 19 C.F.R. § 351.301 in a uniform
and reasonable manner 92
7.9.5 Conclusion. 94
7.10 Consequential claims under Articles 1,
9.3, and 18.4 of the Anti-Dumping Agreement, Article VI of the GATT 1994, and
Article XVI:4 of the WTO Agreement 94
7.11 Korea's claim under Article I:1 of the
GATT 1994. 95
7.11.1 Provision at issue. 95
7.11.2 Main arguments of the parties. 95
7.11.3 Main arguments of the third parties. 95
7.11.4 Evaluation by the Panel 96
7.11.4.1 Whether Korea's claims under Article
I:1 of the GATT 1994 is within our terms of reference 96
7.11.4.2 The USDOC's alleged denial of an
opportunity for the Korean respondents to comment on the Tenaris financial statements. 97
7.11.5 Conclusion. 98
8 CONCLUSIONS AND
RECOMMENDATIONS. 98