Abstract
AbstractThis paper presents a legal-economic analysis of key aspects of the WTO Panel Report involving a challenge by Indonesia against the anti-dumping and countervailing duties imposed by the US on certain coated paper from Indonesia. We focus on the findings in this case relevant to the determination of a ‘benefit’ to the recipient, a core requirement to establish the existence and extent of a subsidy. We examine benchmarking for determining benefit in cases of predominant government ownership of a natural resource and the use of ‘adverse facts available’ against a non-cooperative respondent to infer the existence of a benefit. The benefit analysis in this case may have broader implications. First, it may limit the scope for governments to determine their own policies regarding the ownership and management of natural resources. Second, it may create a loophole allowing investigating authorities to fill gaps in the factual record by intentionally using the ‘facts available’ to the disadvantage of a respondent. In both cases, the panel's findings may open the door to potential misuse of these flexibilities to find a benefit where none exists, or to inflate the margin of benefit to allow for higher countervailing duties.
Highlights
The US paper industry has been contracting since 2000 due to significant declines in demand due to technological change that has displaced the use of paper in communication
Indonesia challenged several aspects of the findings before a WTO panel under the Anti-Dumping Agreement (ADA) and the Agreement on Subsidies and Countervailing Measures (SCMA);1 this paper focuses on its challenge to the subsidy determination and, in particular, the determination of a ‘benefit’
Indonesia claimed that this benefit determination was made in a manner contrary to SCMA Article 12.7, which provides that where any party refuses access to, or does not provide, necessary information within a reasonable period or impedes the investigation, determinations may be made based on ‘the facts available’
Summary
The US paper industry has been contracting since 2000 due to significant declines in demand due to technological change that has displaced the use of paper in communication. The US–Coated Paper (Indonesia) case highlights some important legal and economic challenges of CVD investigations and the establishment of a ‘benefit’ in subsidy determinations. Where requested information is not provided, investigating authorities may rely on other ‘facts available’ to fill gaps in the factual record, in some cases leading to outcomes less favorable to a non-cooperative respondent. When and how this possibility may be used is controversial. 218 Eugene Beaulieu and Denise Prévost standing timber and the log export ban conferred a benefit violates SCMA Article 14(d) because USDOC made a per se determination of price distortion based solely on the predominant market share of government-owned forests. We conclude by reflecting on the wider implications of the case
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