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China's Measure Imposing Anti-Dumping Duties on Stainless Steel Products Originating from Japan Revoked

China's Measure Imposing Anti-Dumping Duties on Stainless Steel Products Originating from Japan Revoked

- WTO Dispute Settlement Procedures -

July 23, 2024

The Ministry of Commerce, China, revoked its measure imposing anti-dumping duties on stainless steel products originating from Japan, as of 0:00 am, July 23, 2024.

The measure was examined by the WTO at the request of Japan, and the WTO Dispute Settlement Body found that that measure was inconsistent with the WTO Anti-dumping Agreement and has been recommending that China bring the measure into conformity with the Agreement.

1. Outline

Based on Japan’s request, a WTO dispute settlement panel found that the measure of imposing anti-dumping duties on stainless steel products originating from Japan (hereinafter referred to as the "AD measure") was inconsistent with the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 (the WTO Anti-dumping Agreement) and recommended that China bring the measure into conformity with the Agreement.

Thereafter, both Japan and China agreed that China will implement WTO’s recommendation by May 8, 2024, and the Chinese government revoked the AD measure as of 0:00 am, July 23, 2024.

2. Position of the Japanese government

Japan has been repeatedly requesting that China withdraw its AD measure that was inconsistent with the WTO Agreement. The Japanese government considers that the revocation of the AD measure on products originating from Japan is an achievement accomplished by Japan requesting WTO to undertake the dispute settlement procedure, and the claims of Japan being upheld.

Japan will continue with its effort through the WTO dispute settlement procedure to clarify that the protectionist abuse of trade remedies is intolerable under the WTO Agreement, and to rectify and eliminate such measures.

3. Reference

(1) Dispute settlement procedure under the WTO Agreement

If consultations between governments fail to settle a dispute, based on a request from the complaining WTO member, a WTO panel (first instance), which is a quasi-judicial third-party organization, examines the matter in question and makes rulings regarding its consistency with the WTO Agreement. If any inconsistencies are confirmed, the panel recommends correction of the measures. If the country implementing the measure does not rectify the inconsistency according to the recommendation within a reasonable period, the requesting country may take measures such as suspensions of tariff concessions or other obligations (known as "countermeasures") towards the implementing country.

Any party which is not satisfied with the panel rulings may appeal to the WTO Appellate Body (second instance). However, because the WTO Appellate Body has become dysfunctional, the Multi-Party Interim Appeal Arbitration Arrangement (MPIA) became effective in April 2020, as an interim response to the impasse of the Appellate Body. Japan has participated in this agreement since March 2023 (54 countries and regions, including Japan and China, are participating in this arrangement). The participating members agree to resolve disputes by using the MPIA arbitrations (arbitration by mutual agreement pursuant to Article 25 of DSU), instead of appealing to the dysfunctional Appellate Body to suspend the case ("appealing into the void"), when they are unable to accept the adoption of the panel decisions.

In this case, as China did not "appeal into the void" against the panel decisions (announced on June 19, 2023), nor make an appeal through MPIA arbitration, the panel decisions were adopted by the WTO Dispute Settlement Body (on July 28, 2023). Thereafter, both Japan and China agreed that China will implement the WTO’s recommendation by May 8, 2024. However, because the AD measure had continued in place beyond May 8, 2024, Japan had been considering forwarding the procedure according to the WTO Agreement (procedures to confirm the implementation and the appropriateness of recommendation, and procedures to apply for taking countermeasures) while encouraging China to revoke the measure as soon as possible. On May 29, Japan notified the WTO of the commitments made regarding future procedures ("sequencing agreement").

(2) Stainless steel products (the products in question)

The AD measure covers stainless steel slabs, hot-rolled stainless-steel sheets (cut sheets and plates), and hot-rolled stainless-steel coils. Stainless steel slabs are semi-processed products that are obtained by casting refined melted steel. Hot-rolled stainless-steel sheets are used in industrial machinery and as construction materials for structures such as ships and bridges. Uses of hot-rolled stainless-steel coils include use as semi-finished products of cold rolled stainless steel products for automotive parts and household electric appliances.

(3) Anti-dumping duty

An anti-dumping duty is a customs duty imposed on a certain product by an importing country where it is demonstrated that the export price of the product is less than its selling price destined for consumption in the exporting country and the dumped imports are causing injury to the competing industry in the importing country. The value of the anti-dumping duty cannot exceed the difference between the export price of the product in question and its domestic selling price in the exporting country.

An anti-dumping duty is in principle terminated within 5 years from the start of implementation. However, if the extension review confirms that the risk that dumping and injury will continue or reoccur after the termination of the anti-dumping duty, it is possible to extend the duty.

Among the 19 anti-dumping duties where China is currently imposing duties on products originating from Japan, the period of duties has been extended for 15 cases.

In the AD measure, duties were imposed on stainless products imported to China from 4 countries and regions (Japan, the Republic of Korea (ROK), Indonesia, and the EU) (period of duties: from July 23, 2019, to July 22, 2024). The extension review of the anti-dumping duty started on July 22. However, Japan is not subject to the review, which is only for the ROK, Indonesia, the EU, and the U.K. (due to its withdrawal from the EU in 2020). Therefore, the AD measure on stainless steel products originating from Japan was terminated and revoked due to the lapse as of July 22, 2024, which is the last day of the period of the measure.

(4) Previous press releases regarding this matter

Division in Charge

Information on the WTO dispute settlement

Office for WTO Compliance and Dispute Settlement, International Economic Affairs Department, Trade Policy Bureau

Information on the stainless steel industry

Metal Industries Division, Manufacturing Industries Bureau

Information on Japan-China economic relations

Northeast Asia Division, Trade Policy Bureau

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