United States – Continued Dumping and Subsidy Offset Act of 2000 (Original Complaint by Korea) – Recourse to Arbitration by the United States under Article 22.6 of the DSU (WT/DS217) Decision by the Arbitrator

Summary

INTRODUCTION

Initial Proceedings

On 27 January 2003, the Dispute Settlement Body (DSB) adopted the report of the Panel in this dispute, as modified by the report of the Appellate Body.

The findings adopted by the DSB were that the measure at issue in this case – the Continued Dumping and Subsidies Offset Act of 2000 (hereafter “CDSOA”):

(a) is a non-permissible specific action against dumping or a subsidy, contrary to Articles VI:2 and VI:3 of the GATT 1994, Article 18.1 of the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 (hereafter the “Anti-Dumping Agreement”) and Article 32.1 of the Agreement on Subsidies and Countervailing Measures (hereafter the “SCM Agreement”);

(b) is inconsistent with certain provisions of the Anti-Dumping Agreement and SCM Agreement, so that the United States has failed to comply with Article 18.4 of the Anti-Dumping Agreement, Article 32.5 of the SCM Agreement and Article XVI:4 of the Marrakesh Agreement Establishing the World Trade Organization (hereafter the “WTO Agreement”);

(c) pursuant to Article 3.8 of the DSU, to the extent that it is inconsistent with provisions of the Anti-Dumping Agreement and the SCM Agreement, nullifies or impairs benefits accruing to the complaining parties under those Agreements;

On 13 June 2003, an arbitrator established under Article 21.3(c) of the DSU ruled that the “reasonable period of time” for the United States to implement the recommendations and rulings of the DSB in this case was 11 months from the date of adoption of the Panel and Appellate Body Reports by the DSB. The United States was consequently awarded until 27 December 2003 to bring the CDSOA into conformity with its obligations under GATT 1994, the Anti- Dumping Agreement, the SCM Agreement and the WTO Agreement.

On 16 January 2004, Korea requested authorization from the DSB, under Article 22.2 of the DSU, to suspend the application to the United States of concessions or other obligations for an amount that will be determined, every year, by the amount of the offset payments made to affected domestic producers in the latest annual distribution under the CDSOA.

Korea intends to impose an additional import duty above bound customs duties on a final list of products originating in the United States.