UNITED STATES – ANTI-DUMPING AND
COUNTERVAILING DUTIES ON RIPE OLIVES FROM SPAIN
RECOURSE TO ARTICLE 22.6 OF THE DSU BY THE
UNITED STATES
DECISION
BY THE ARBITRATOR
BCI redacted, as
indicated [[***]]
TABLE OF CONTENTS
1
Introduction
1.1
Original proceedings
1.2
Compliance proceedings. 11
1.3
Referral to arbitration and arbitration proceedings. 12
2 Procedural Matters. 14
2.1
Business Confidential Information (BCI) 14
2.2
Public viewing of the meeting of the Arbitrator with the parties. 14
3 Mandate of the Arbitrator and burden of
proof. 15
3.1
Mandate of the Arbitrator 15
3.2
Burden of proof 16
4 The appropriate counterfactual. 17
4.1
Introduction. 17
4.2
The relevant DSB recommendations and rulings. 18
4.3
Appropriate counterfactual concerning the application of Section 771B in
the Spanish ripe olives CVD investigation (the as applied WTO-inconsistency) 20
4.3.1
Overview. 20
4.3.2
Counterfactual proposed by the European Union. 21
4.3.3
Counterfactual proposed by the United States. 25
4.3.4
Arbitrator's counterfactual 31
4.4
Appropriate counterfactual for future application of Section 771B. 33
4.4.1
Counterfactual proposed by the European Union. 33
4.4.2
Counterfactual proposed by the United States. 34
4.4.3
Arbitrator's counterfactual 37
4.4.3.1
Counterfactual for individually investigated companies. 38
4.4.3.2
Counterfactual all-others rate. 40
4.4.3.3
Instructions for obtaining the BCI required for the calculations. 42
4.5
Conclusion with respect to the appropriate counterfactual 43
5 Relevant market. 43
6 The European Union's request
concerning the application of Section 771B in the Spanish ripe olives CVD
investigation.. 47
6.1
Introduction. 47
6.2
Appropriate time-periods. 47
6.3
Methodology. 48
6.3.1
The European Union's proposed economic model 48
6.3.2
The United States' proposed adjustments to the economic model 50
6.3.2.1
The United States' domestic sales. 50
6.3.2.2
Third markets. 51
6.3.2.3
Parallel ADDs. 53
6.3.2.3.1
Inclusion of ADDs to correct the distortion to the reference year predicted
market shares. 53
6.3.2.3.2
Operation of the parallel CVDs and ADDs as a single duty and the isolation of
the impact of the WTO-inconsistent measure. 55
6.3.3
The economic model selected by the Arbitrator 56
6.3.4
Parameter values and data inputs. 57
6.3.4.1
Price elasticity of demand. 57
6.3.4.2
Armington elasticity of substitution. 58
6.3.4.2.1
Differences between sources: Data characteristics. 59
6.3.4.2.2
Differences between sources: Estimation methods. 61
6.3.4.2.3
Conclusion on the value of the Armington elasticity of substitution. 62
6.3.4.3
Price elasticity of supply. 62
6.3.4.3.1
Price elasticity of domestic supply. 63
6.3.4.3.2
Price elasticity of export supply. 64
6.3.4.4
Import values. 65
6.3.4.5
Value of the United States' domestic sales. 66
6.3.4.6
Duty rates. 68
6.3.4.6.1
The actual CVD rate. 68
6.3.4.6.2
The parallel ADD rate. 69
6.3.5
Implementation of the Arbitrator's economic model 70
6.4
Modifications of the level of NI 71
6.5
Annual price-level adjustment of the level of NI 72
6.6
Conclusion with respect to the NI arising from the application of
Section 771B in the Spanish Ripe Olives CVD investigation. 74
7 The European Union's request
concerning the future application of section 771B. 74
7.1
Introduction. 74
7.2
General issues on the application of the prospective model 75
7.2.1
The United States' request to decline to set out any model 75
7.2.2
Triggering event 77
7.2.3
Duration, timing, and modification of the suspension. 81
7.2.4
Initial notification on the application of the prospective model 84
7.2.5
Notifications to the DSB. 85
7.2.6
Deadlines for the application of the prospective model 85
7.2.7
Scope of products covered by the model 86
7.2.8
Appropriate time-period. 87
7.3
Methodology for the prospective model 88
7.3.1
The European Union's model 88
7.3.2
The United States' model 88
7.3.3
Model chosen by the Arbitrator 89
7.3.4
Parameter values and data inputs. 91
7.3.4.1
Price elasticity of demand and price elasticity of domestic supply. 92
7.3.4.2
Armington elasticity of substitution. 93
7.3.4.3
Price elasticity of export supply. 94
7.3.4.4
Import values. 95
7.3.4.5
Value of the United States' domestic sales. 96
7.3.4.5.1
Sourcing data from the ASM.. 97
7.3.4.5.2
Sourcing data from the BEA. 98
7.3.4.6
Duty rates. 99
7.3.4.6.1
Parallel ADDs. 99
7.3.4.6.2
Actual duty rate. 100
7.3.4.6.3
Counterfactual WTO-consistent duty rate. 102
7.3.5
Annual price-level adjustment 102
7.4
Conclusion with respect to the NI arising from the future application of
Section 771B. 104
8 BCI Understanding. 104
9 Overall award of the arbitrator. 104