korea – anti-dumping duties on imports

of certain paper from indonesia

Request for Consultations by Indonesia

            The following communication, dated 4 June 2004, from the delegation of Indonesia to the delegation of Korea and to the Chairperson of the Dispute Settlement Body, is circulated in accordance with Article 4.4 of the DSU.

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            My authorities have instructed me to request consultations with the Republic of Korea ("Korea") pursuant to Article 4 of the Understanding on Rules and Procedures Governing the Settlement of Disputes ("DSU"), Article XXII:1 of the General Agreement on Tariffs and Trade 1994 ("GATT") and Article 17 of the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 ("AD Agreement") with respect to the imposition of definitive anti-dumping duties on imports of business information paper and uncoated wood-free printing paper from Indonesia[1] and certain aspects of the investigation leading to the imposition of such duties.

            Article 1 of the AD Agreement requires that "[a]n anti-dumping measure shall be applied only under the circumstances provided for in Article VI of GATT 1994 and pursuant to investigations initiated* and conducted in accordance with the provisions of [the AD] Agreement" [*footnote omitted].  In the light of this requirement, and based on Article VI of GATT and other provisions of the AD Agreement hereafter cited, Indonesia is deeply concerned about the following aspects of the imposition of definitive anti-dumping duties and the investigation leading thereto:

            1. Korea's initiation of investigation:

·                     notwithstanding its failure to make a determination that the application had been made by or on behalf of the domestic industry, (Article 5.4 of the AD Agreement);

·                     notwithstanding its failure to make an objective examination of the participation of the applicant Hansol Paper Co. ("Hansol") in the definition of "domestic industry", despite Hansol's significant volume of imports from Indonesia during the period of investigation for injury, (Article 3.1 and Article 4.1(i) of the AD Agreement);

·                     notwithstanding the applicants' failure to include in the application sufficient and adequate evidence of dumping, injury and causal link between the alleged dumped imports and the injury, particularly in respect of:

(i)         the occurrence of certain injury factors, inter alia, market share, domestic prices, output, profits, ability to raise capital or investment, employment, productivity, actual and potential negative effects on cash flow, growth, and the magnitude of the margin of dumping,

(ii)        the existence of causal link between the alleged dumped imports and injury, as the information and evidence on injury submitted by the applicants relates to a period of investigation (1999-2001) during which – except for the quarter October to  December 2001 – there was no occurrence of dumping for the purpose of the investigation (according to the Notice of Initiation, the period of investigation for dumping was 1 October 2001 to 30 September 2002),

                                (Article 5.2 and Article 5.3 of the AD Agreement);

·                     notwithstanding the fact that the period for injury and the period for dumping overlapped only for a period of three months, Korea's failure to consider simultaneously the evidence of both dumping and injury in the decision to initiate the investigation, (Article 5.7 of the AD Agreement);

            2.         Korea's failure to provide in the Notice of Initiation, any information regarding the factors on which the allegation of injury [was] based, (Article 12.1.1(iv) of the AD Agreement).

            3.         Korea's granting of confidential treatment to information contained in the domestic industry's application without (i) requiring the applicants to provide showing of good cause for such a treatment, (ii) requiring the applicants to furnish non-confidential summaries "in sufficient detail to permit a reasonable understanding of the substance of the information submitted in confidence", or (iii) any indication that the information could not be summarized and the reasons why summarization was not possible, (Article 6.5, Article 6.5.1 and Article 6.5.2 of the AD Agreement).

            4.         Korea's making of a request for information from a firm which was not subject to investigation - i.e. PT Cakrawala Mega Indah ("CMI") -, without having obtained the agreement of that firm, and without having notified the Government of Indonesia of such request in the context of an on-the-spot investigation, (Article 6.7 and Annex I of the AD Agreement).

            5.         Korea's rejection of information related to the sales of CMI, even though it was (i) verifiable information, (ii) appropriately submitted to be used without undue difficulties, and (iii) submitted in a timely fashion, (Article 6.8 and paragraph 3 of Annex II of the AD Agreement).

            6.         Korea's failure to explain why it did not accept the information related to the sales of CMI (Article 6.8 and paragraph 6 of Annex II of the AD Agreement).