Abstract
This article analyses economic and legal issues in the WTO dispute between Morocco and Turkey over hot-rolled steel. Over 2013-14, the Moroccan government conducted an antidumping investigation against two Turkish steel producers. Morocco’s investigation concluded that Turkish dumping was retarding the establishment of a new domestic industry; antidumping duties were imposed against both Turkish producers. Turkey filed a complaint at the WTO in 2016, asserting procedural and substantive violations. The Panel found that Morocco had acted inconsistently with a number of WTO obligations, including those regarding its injury investigation. Although Morocco initially appealed the Panel’s decision, it withdrew its appeal after the antidumping duties expired in September 2019. This case is unusual and important in that it was the first antidumping case in which a country sought to use antidumping duties to protect a newly developing industry. The Panel may have missed an opportunity to explore the definition of an ‘unestablished’ industry for purposes of determining injury in an antidumping investigation.
Highlights
In 2010, Mahgreb Steel, the sole producer of steel in Morocco, expanded its product offerings and began producing hot-rolled steel. 1 This hot-rolled steel was used internally as an input into some of Mahgreb’s other products and sold externally to arm’s length customers in Morocco
The Moroccan Investigating Authority decided that, because Mahgreb had been operating as a hot-rolled steel producer for less than 36 months,3 the investigation into injury would focus exclusively on whether dumping by the Turkish producers had materially retarded the development of a new industry in Morocco
With regard to the investigating authority’s determination that Turkish imports had ‘materially retarded’ the establishment of the relevant domestic industry, the Panel concluded that Morocco had acted inconsistently with Articles 3.1 and 3.4 ADA in (a) failing to evaluate five of the fifteen injury factors listed in Article 3.4,21 (b) disregarding the captive market in its injury analysis and (c) relying on the McLellan report without considering the significance of the inaccuracies in that report
Summary
In 2010, Mahgreb Steel, the sole producer of steel in Morocco, expanded its product offerings and began producing hot-rolled steel. 1 This hot-rolled steel was used internally as an input into some of Mahgreb’s other products and sold externally to arm’s length customers in Morocco. By 2012, Mahgreb had captured 70% of the Moroccan market for hot-rolled steel, including its own self-purchases.2 Despite this high market share, there was concern that intense competition from two Turkish producers, Erdemir Group and Colakoglu, had led Mahgreb to incur losses on its sales to arm’s length domestic customers. The Moroccan Investigating Authority decided that, because Mahgreb had been operating as a hot-rolled steel producer for less than 36 months, the investigation into injury would focus exclusively on whether dumping by the Turkish producers had materially retarded the development of a new industry in Morocco. An industry,” to the best of our knowledge, this is the first case that came before the WTO regarding dumping and establishment of a new industry This meant that the Moroccan Investigating Authority was, in some sense, working with a blank slate in terms of defining and evaluating clear and objective empirical criteria. But noted that it still objected to many of the findings in the Panel Report
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