WTO Panel Says Australian AD/CVD on Certain Chinese Goods Violate WTO Rules

A World Trade Organization dispute panel found that certain elements of Australian antidumping and countervailing duty proceedings on wind towers, deep drawn stainless steel sinks and railway wheels from China violate WTO commitments. Issuing its findings March 26, the panel recommended that Australia bring its measures into conformity with the General Agreement on Tariffs and Trade 1994.

China brought the case to contest the AD investigations on the three products and the CVD investigation on stainless steel sinks. The panel said Australia violated the Anti-Dumping Agreement in its wind tower investigations because it "improperly rejected using the examined exporter's record costs for steel plate in constructing normal value." The panel said Australia also erred in "uplifting" the respondent exporter's steel plate costs when calculating normal value and transferring that methodology over to the "uncooperative and all other exporters" without a "reasoned and adequate explanation" for why the uplifted costs represented a cost of production for the examined exporter.

The panel also said China failed to show that Australia violated the AD agreement by "applying a profit rate to improperly uplifted cost data, because China failed to make a prima facie case in this context."

The dispute panel said Australia violated its WTO commitments in the stainless steel sinks proceeding "by failing to provide a reasoned and adequate explanation as to why surrogate costs of production chosen for performing the ordinary course of trade test represented a cost of production in China." Australia also erred in comparing export models for the purpose of conducting a "fair comparison as between the normal value and export price for a ceratin examined exporter."

For these proceedings, the WTO also said, China failed to show that Australia erred in the expiry review: 1) by "rejecting exporters' record costs for purposes of performing the ordinary-course-of-trade test"; 2) finding that the VAT "recoverability difference" between home market and export sales affected price comparability between the normal value and export price; and 3) "using an averaging methodology in calculating the adjustments to account for differences in accessories for a certain examined exporter."

The panel said Australia violated WTO commitments in its railway wheels proceedings when it "improperly departed from using the examined exporter's record costs of production when constructing normal value," failed to explain its use of uplifted costs, and failed to "calculate profit on the basis of the actual amounts realized by the examined exporter in respect of 'sales in the domestic market of the country of origin.'"