En Route to Head-on Collision with US Gov’t
The Korean government is planning to ask the United States to promptly amend or abolish anti-dumping and countervailing tariffs based on the AFA method in accordance in bilateral negotiations.
The South Korean government has decided to file a complaint at the World Trade Organization (WTO) on the adverse facts available (AFA) method which the US applied to Korean-made steel and transformers. This will mark the second time that Korea institutes a lawsuit against the US this year alone, giving rise to an unprecedented situation in which Korea is simultaneously embroiled in five WTO disputes with the US, an ally of Korea.
The Korean Ministry of Trade, Industry and Energy said that the ministry judged that the US’s action to impose anti-dumping and countervailing duties on Korean-made steel and transformers by applying the AFA method in an anti-dumping investigation was a violation of the WTO agreement and decided to refer the case to a WTO dispute settlement procedure on February 14.
The AFA method is an investigation method through which the US Department of Commerce imposes a high-rate duty by using unfavorable information submitted by a US company when the US Department of Commerce judges that the subject company did not properly submit materials or cooperate sufficiently. The US has applied the AFA method to eight investigations so far, starting with the final anti-dumping verdict on Korean-made galvanized sheet iron. As a result, the US slapped anti-dumping and countervailing duties of 9.49% to 60.81%.
Specifically, the US put an anti-dumping duty of 47.80% on Korean-made galvanized steel iron, an anti-dumping duty of 34.33% and a countervailing duty of 59.72% on Korean-made cold rolled steel sheets and an anti-dumping duty of 9.49% and a countervailing duty of 58.68% on Korean-made hot-rolled steel sheets in 2016. The US recently slapped a 25.51% anti-dumping duty on Korean-made transformers after reviews of them since 2017.
"The Korean government has repeatedly raised issue with the US’s applying the AFA method via both bilateral and multilateral channels, but the US is not desisting from applying the AFA method. So the Korean government has decided to bring the case to the WTO after legal analysis and collecting opinions from Korean companies and related ministries,” said Shin Jeong-hoon, manager of trade judicial affairs at the Ministry of Trade, Industry and Energy.
The Korean government is planning to ask the United States to promptly amend or abolish anti-dumping and countervailing tariffs based on the AFA method in accordance in bilateral negotiations which are the first step in the WTO dispute settlement process. The United States (the defendant country) should conduct bilateral consultations within 30 days of the request for consultations. Unless the issue is resolved within sixty days, the Korean government will call for the establishment of a panel at the WTO and proceed with a dispute settlement process in earnest.
This complaint has led Korea to engage in five WTO disputes in total with the US at the same time. Regarding anti-dumping and countervailing duty lawsuits against washing machines, Korea applied for retaliatory duties of US$711 million at the WTO. With reference to US safeguards on Korean-made washers and solar panels, Korea is taking steps to institute lawsuits against the US at the WTO. In relation to a lawsuit on an anti-dumping duty on Korean-made oil country tubular goods (OCTGs), the US lost the case and is proceeding with an implementation procedure.