United States - Definitive Anti-Dumping and Countervailing Duties on Certain Products from China
Third Participant Oral Submission of Australia
Geneva, 13 January 2011
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- Mr Chairman, Members of the Division, Australia welcomes this opportunity
to present its views on some of the issues in this dispute.
- Australia believes that these proceedings raise core definitional issues
relating to the Agreement on Subsidies and Countervailing Measures. These
include: the definition of "public body" and the concurrent application
of anti-dumping and countervailing measures.
B. Public Body
- There are three terms of relevance in Article 1 of the Subsidies
Agreement: "governments", "public body", and "private
body" that has been entrusted or directed by a government to make a financial
contribution. Australia notes the Panel's finding in Japan -Alcoholic
Beverages II that "[a]n interpreter is not free to adopt a reading
that would result in reducing whole clauses or paragraphs of a treaty to redundancy
or inutility."1 Australia also notes the
statement of the Appellate Body in US - Upland Cotton that "a
treaty interpreter must read all applicable provisions of a treaty in a way
that gives meaning to all of them, harmoniously."2
These statements are consistent with fundamental principles of treaty interpretation.
- In its Appellate submission China argued that the actions of a publicly
owned or controlled enterprise should be presumed private, and only fall within
the scope of the Subsidies Agreement if such an enterprise is exercising powers
vested in it by government.3A private entity
falls within the scope of Article 1.1(a)(1)(iv) of the Subsidies Agreement
if it is entrusted or directed by government to make a financial contribution
which would "normally be vested in the government". If, as China
submits, a "public body" must exercise powers vested in it by government,
the test for a "public body" would overlap to such an extent with
the test for "private body" under Article 1.1(a)(1)(iv) of the Subsidies
Agreement as to render the term of "public body" inutile.4
Factors to be considered in determining government control
- Australia agrees that the criterion concerning "government
control" set forth by the Panel in this dispute is a proper basis for
determining whether an entity is a "public body" within the meaning
of Article 1.1(a)(1)(i) of the Subsidies Agreement.
- However, Australia agrees with the concerns expressed by the EU,5
Brazil6, and Japan7in
their Third Participant Written Submissions that while government ownership
may be highly relevant evidence of "government control", it is not
necessarily dispositive and other factors should also be considered.8
This is consistent with the panel decision in Korea -Commercial Vessels,
which considered not only government ownership but also the government's
authority over an entity's operations in determining whether it was controlled
by the government.9
The ILC Articles
- Australia submits that the ILC Articles offer no interpretive
assistance in this case. Further, Australia submits that the ILC Articles
do not have to be found to be inconsistent with Article 1.1(a)(1) of the Subsidies
Agreement, under the principle of lex specialis, in order not to
apply in the present case.
- As Australia discussed in its written submission, in its view Article 1
of the Subsidies Agreement is not an attribution rule.10
However, even if Article 1 of the Subsidies Agreement were found to be an
attribution rule, as the Panel in this case seemed to suggest,11it is not inconsistent with the ILC Articles. The ILC Articles only
appear to be inconsistent due to China's misapplication of them.12
- As the US noted in its Appellate Submission "... there is simply no
indication that the Appellate Body or any prior panel has accepted or endorsed
the proposition that the Draft Articles prevent government-owned or government-controlled
entities from being considered public bodies unless they are performing governmental
functions pursuant to government authority, as China argues". 13
C. Concurrent Application of Anti-Dumping and Countervailing Measures
- Neither the Agreement on Implementation of Article VI of
the General Agreement on Tariffs and Trade 1994 nor the Subsidies Agreement
address concurrent or parallel antidumping and countervailing investigations.
The Agreements do not specify that consideration of the imposition of the
full dumping margin or the full amount of the subsidy must take into account
other trade remedy actions that may be underway in the importing country.
- In Australia's view, a strict reading of these provisions, as carried out
by the Panel at first instance, is necessary to maintain the integrity of
these provisions. Australia submits that the provisions should only be read
to permit countermeasures for the specific subsidy or dumping that has been
investigated in that particular investigation and not take into account factors
outside the investigation.
- A broader reading of the relevant provisions of the Anti-Dumping and Subsidies
Agreements as an implied mechanism to prevent double remedies for the same
injury, would in Australia's view, compromise the integrity of the link between
the injury and the investigation.
- Australia submits that the Appellate Body might consider the question of
whether Article 11.2 of the Anti-Dumping Agreement could address the situation
of double remedies. If, following the imposition of anti-dumping and countervailing
duties, a review were to be conducted, authorities might find that the continued
imposition of the anti-dumping duty would no longer meet the Article 11.2
test that "the continued imposition of the duty is necessary to offset
dumping" nor that "the injury would be likely to continue or recur
if the duty were removed or varied".
- Australia submits that the Appellate Body might also consider the question
of whether Article 21.2 of the Subsidies Agreement could similarly address
the situation of double remedies. If, following the imposition of anti-dumping
and countervailing duties, a review were to be conducted, authorities might
find that the continued imposition of the countervailing duty would no longer
meet the Article 21.2 test that "the continued imposition of the duty
is necessary to offset subsidization" nor that "the injury would
be likely to continue or recur if the duty were removed or varied".
- Australia thanks the Chairman and Members of the Division for
this opportunity to present its views on some of the issues in this dispute.
- 1Panel Report, Japan - Taxes on Alcoholic Beverages, WT/DS8/R, WT/DS10/R, WT/DS11/R, adopted 1 November 1996, as modified by Appellate Body Report WT/DS8/AB/R, WT/DS10/AB/R, WT/DS11/AB/R, DSR 1996:I, 125, Para.6.22
- 2 China Appellant Submission, para. 94, quoting Appellate Body Report, United States - Subsidies on Upland Cotton, WT/DS267/AB/R, adopted 21 March 2005, DSR 2005:I, 3, para. 549.
- 3 China Appellant Submission, paras 28 - 30.
- 4 Following the argument in Brazil's Third Party Written Submission para 22, the only difference between a "public body" and "private body" covered by Article 1.1(a)(1)(iv) of the Subsidies Agreement would seem to be whether the activity is engaged in by the entity on a regular or occasional basis.
- 5 EU Third Participant Written Submission para 19.
- 6Brazil Third Participant Written Submission para 26.
- 7 Japan Third Participant Written Submission para 14.
- 8 Such a view should also allay the concerns of Brazil in its Third Party Written Submission para 8, that ownership will automatically deem a body to be a "public body".
9 ;Panel Report, Korea - Measures Affecting Trade in Commercial
Vessels, WT/DS273/R, adopted 11 April 2005, DSR 2005:VII, 2749, para.7.50.
10 Australia Third Participant Written Submission paras 12
- 11 Panel Report para 8.90.
12 Australia Third Participant Written Submission paras 22
- 24. Note in the EU Third Participant Written Submission footnote 43 that the
EU looks to Article 8 when interpreting "public bodies", not to Article
5 as China suggests.
- 13 US Appellee Submission para 132.