Panel Report on eu—Biodiesel: A Glass Half Full?—Implications for the Rising Issue of “Particular Market Situation”

Abstract

This article provides a detailed analysis of the World Trade Organisation (“wto”) panel report on the eu—Biodiesel dispute which represents the latest development of the wto jurisprudence on anti-dumping. The panel’s decision has significant implications for the rising use of Particular Market Situation (“pms”) by traditional users of anti-dumping (such as Australia) against economies like China in anti-dumping investigations. The panel correctly established that a finding of pms does not provide a sufficient ground for the use of surrogate costs in the determination of constructed normal value (“cnv”) and that the use of that methodology would result in the imposition of anti-dumping duties in excess of dumping margins that should have been established consistently with the wto Anti-Dumping Agreement, that is, by using actual costs recorded by exporters under investigation. It is argued that both Australia’s anti-dumping laws which essentially authorise the use of surrogate costs in the construction of normal value solely based on a finding of pms and Australia’s use of that methodology in practice are contrary to wto rules. The panel’s decision, therefore, is a positive step toward the resolution of the issues related to pms by imposing constraints on the use of a protectionist methodology in determining cnv so as to prevent unjustified inflation of dumping margins and anti-dumping duties.