Full victory for the Co-complainants in the WTO Panel against the US steel safeguards

Today, the WTO Panel requested by the EC, Japan, Korea, China, Switzerland, Norway, New Zealand and Brazil (Co-complainants) ruled that each of the US safeguard measures imposed on 10 steel product groupings was in breach of WTO rules.

The Co-complainants welcome the Panel’s decision which upheld their main arguments and call upon the US to terminate its WTO incompatible safeguard measures without delay.

Should the US appeal this Panel’s decision, the Co-complainants will continue to work together to ensure that the WTO Appellate Body confirms that the US steel safeguard measures violate WTO rules.

Background

The US Presidential Proclamation of 5 March 2002 imposed safeguard measures on 10 steel product groupings in the form of additional tariffs up to 30%. Immediately thereafter, the EC, followed by Japan, Korea, China, Switzerland, Norway, New Zealand and Brazil, engaged WTO dispute settlement procedures against the US steel safeguard measures.

The Co-complainants worked in close co-operation at each stage of the process. The Panel agreed with the main arguments presented by the Co-complainants and found that:

• none of the US measures has been taken as a result of unforeseen developments as required under the WTO rules;
• for most products imports have not increased;
• for all products but one the US has not properly established the necessary causal link to the alleged serious injury suffered by the US steel industry;
• the US has excluded imports from Canada, Mexico, Israel and Jordan from the measures in a manner inconsistent with the WTO rules.

Based on the above, the Panel concluded that each of the US measures is in violation of the WTO rules.

The Panel reports shall now be adopted by the WTO Dispute Settlement Body unless the US appeals. The Co-complainants will request the adoption of these Panel reports at the earliest opportunity to allow a prompt termination of the US safeguard measures. However, the Co-complainants will keep working in close co-ordination if the US decides to appeal.

If the US were to appeal, the resolution of this dispute would be delayed until before the end of the year.

Upon the adoption of the Panel/Appellate Body reports confirming the US violations of WTO rules, the US will be subject to the application of re-balancing measures, absent compliance