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September 2000
WTO Appellate Ruling on Anti-Dumping Act of 1916
A WTO Appellate Body report has ruled that Title VIII of the United States Revenue Act of 1916 (1916 Act) is not in conformity with the United States’ obligations under Article VI of the General Agreement on Tariffs and Trade 1994 (GATT 1994) and the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 (Anti-Dumping Agreement). The 1916 Act provides for civil and criminal proceedings, under certain circumstances, against importers selling foreign-produced goods in the United States at prices "substantially less" than prices for the same product in a relevant foreign market. The 1916 Act differs from the anti-dumping provisions of the US Tariff Act, which impose only offsetting duties, and which were not under discussion in this case.
The appellate ruling was issued pursuant to appeals lodged against the EC Panel Report in March of this year, and the Japan Panel Report in May. The European Communities argued that permitting the imposition of sanctions other than duties in an anti-dumping law, as allowed by the 1916 Act, is a breach of the discipline established by Article VI of the GATT 1994 and the Anti-Dumping Agreement. Japan likewise argued that the earlier Panel’s findings that "anti-dumping duties are the only permissible remedy to counteract dumping" was correct, noting that the text of Article VI:2 of the GATT 1994 and Article 18.1 of the Anti-Dumping Agreement unambiguously establish and confirm, respectively, that anti-dumping duties are the exclusive remedy for dumping.
The Appellate Body held that Article VI and Article VI:2 of the GATT 1994 read in conjunction with the Anti-Dumping Agreement "limit the permissible responses to dumping to definitive anti-dumping duties, provisional measures and price undertakings." The provisions for civil and criminal proceedings and penalties in the 1916 Act are inconsistent with obligations created by these agreements.
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