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I．INTRODUCTION
II．FACTUAL BACKGROUND
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| A． |
Background On U.S. Investigations And Measures Imposed
| 1． |
Initiation of Safeguard Investigation |
| 2． |
ITC Injury Investigation and Determination |
| 3． |
ITC Remedy Investigation and Recommendation |
| 4． |
Actions Taken by USTR
a．Supplementary information
b．Trade Policy Staff Committee Actions
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| 5． |
Presidential Proclamation
a．Product-specific measures
b．Country exclusions |
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| B． |
WTO Procedures
| 1． |
Consultations under Article 12.3 of the Agreement on Safeguards |
| 2． |
Dispute settlement consultations |
| 3． |
Single Panel under Article 9.1 of the DSU |
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| C． |
Overview of the United States Steel Industry
| 1． |
Characteristics of the United States steel industry |
| 2． |
Cost structures drive investment in the minimill segment and drive out investment in the integrated segment |
| 3． |
Restructuring in the integrated segment: successes and impediments in the quest to compete more effectively with minimills |
| 4． |
Continuing minimill capacity expansion forces a final shakeout in the U.S. industry |
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III．CLAIMS
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| A． |
Introduction
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| B． |
The ITC's "Like Product" Analysis For Flat Products Was Inconsistent With Articles 2.1 and 4.1(c) of the Agreement on Safeguards and With Articles XIX:1 and X:3 of GATT 1994
| 1． |
Articles 2.1 and 4.1(c) of the Agreement on Safeguards and GATT Article XIX:1 require analysis based on a precisely defined "domestic industry that produces like or directly competitive products" in relation to subject imports
| a． |
Guidelines for interpretation of treaty text |
| b． |
The text of the Agreement on Safeguards, as interpreted by the Appellate Body, contemplates analyses based on specific products |
| c． |
The Appellate Body's interpretation of the term "like product" alone, in other contexts, confirms a restrictive approach |
| d． |
The object and purpose of Articles 2.1 and 4.1(c) of the Agreement on Safeguards, in general, confirm that the domestic industry must be defined to correspond closely to the particular imported product under investigation
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| e． |
The Appellate Body has proposed methods by which to discern the proper scope of the like or directly competitive products |
| f． |
The Appellate Body has also explained that the vertical integration of production facilities is not an appropriate factor for analysis |
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| 2． |
In the case at issue here, the ITC made an overbroad determination of like product with regard to flat-rolled products
| a． |
Background on U.S. law and practice |
| b． |
The ITC in this case determined that, despite their distinct physical characteristics, end-uses, and production processes, all flat-rolled steel products except for tin mill and grain oriented electrical steels are a like product of all such imported products |
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| 3． |
The ITC's determination to conjoin the five products into a single "flat-rolled" like product is inconsistent with Articles 2.1 and 4.1(c) of the Agreement on Safeguards and Article XIX:1 of GATT 1994 |
| 4． |
Because the ITC adopted a like product analysis contrary to its prior like product determinations in prior AD/CVD cases and contrary to like product distinctions for other products in this very case, its actions are inconsistent with Article X:3(a) of GATT 1994
| a． |
The obligations imposed by Article X:3(a) of GATT 1994 |
| b． |
The ITC made inconsistent factual conclusions in this case vis-a-vis previous cases |
| c． |
The ITC's decision on the flat-rolled like product was also internally inconsistent with its findings in the same case with regard to semi-finished long and stainless steel products, and with regard to tin mill products |
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| C． |
The President's Measures On Tin Mill and Stainless Wire Products Are Inconsistent With Articles 2.1, 3.1, 4.2(b), and 4.2(c) of the Agreement on Safeguards and Article X:3(a) of GATT 1994
| 1． |
The President's measures are inconsistent with Articles 2.1 and 4.2(b) of the Agreement on Safeguards and Article X:3(a) of GATT 1994 because there was no correlation between the injury determination, the like product definition, and the measure imposed
| a． |
Articles 2.1 and 4.2(b) of the Agreement on Safeguards require an exact correspondence between the injury determination, the like product definition, and the measure imposed |
| b． |
In this case, the commissioners did not agree on either the like product definition or the injury findings for tin mill products and stainless steel wire products |
| c． |
The ITC's injury determinations on these products improperly were treated by the President as 3-3 ties |
| d． |
The President's action represents a violation of Articles 2.1 and 4.2(b) of the Agreement on Safeguards |
| e． |
The President's decision also violates GATT 1994 Article X:3 |
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| 2． |
Even assuming that the President's reliance on three affirmative votes based on differing like product definitions was legitimate, the decision was inconsistent with Articles 3.1 and 4.2(c) of the Agreement on Safeguards and Article X:3(a) of GATT 1994 on other grounds
| a． |
Articles 3.1 and 4.2(c) of the Agreement on Safeguards require the President to explain any departure from the ITC's findings |
| b． |
The President in this case violated Articles 3.1 and 4.2(c) of the Agreement on Safeguards
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| c． |
The President's decision also violates Article X:3(a) of GATT 1994 |
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| D． |
The U.S. Government Failed to Meet the "Increased Imports" Requirement Prescribed by Articles 2.1 and 4.2(a) of the Agreement on Safeguards, Article XIX:1(a) of the GATT 1994, and Relevant WTO Jurisprudence
| 1． |
Articles 2.1 and 4.2(a) of the Agreement on Safeguards and Article XIX:1(a) of the GATT 1994 Establish a Requirement of Increased Imports
| a． |
The plain meaning of the increased imports requirement |
| b． |
The Appellate Body has confirmed this interpretation of the increased imports requirement
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| 2． |
Summary of U.S. Law and Practice as Applied in this Case
| a． |
"Flat-rolled" products |
| b． |
Tin mill products |
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| 3． |
The ITC's findings of increased imports do not
meet the standard required by Articles 2.1 and
4.2(a) of the Agreement on Safeguards
| a． |
Imports of "flat-rolled products," as defined by a majority of the ITC, did not meet the increased imports standard |
| b． |
Imports of each of the individual flat-rolled products, considered separately, also did not meet the increased imports standard |
| c． |
The trends in the most recent period are even more pronounced when one examines flat-rolled imports from those countries against which the measures were actually imposed |
| d． |
The ITC's analysis of tin mill products is equally flawed |
| e． |
The ITC's import trend analyses of other products was also wrong
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| E． |
The ITC's Causation Analysis Was Inconsistent With Article 4.2(b) of the Agreement on Safeguards
| 1． |
The Agreement on Safeguards sets strict standards
for establishing the causal connection necessary
to justify imposition of safeguard measures
| a． |
Article 4.2(b), first sentence, requires a "causal link" between the increased imports and the serious injury to the domestic industry |
| b． |
Article 4.2(b), second sentence, goes further and explicitly requires authorities to establish "non-attribution"
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| c． |
The Appellate Body has clarified these obligations
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| d． |
Authorities have an obligation to undertake a comprehensive and detailed review of the facts. |
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| 2． |
In this case, the ITC failed to establish a "causal link" between increased imports and serious injury to the flat-rolled industry, and thus failed to meet the test of Article 4.2(b) first sentence
| a． |
The ITC improperly blurs the timing of key trends, and exaggerates their magnitude
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| b． |
The increase in flat-rolled steel imports that occurred in 1998 thus does not correlate with the condition of the corresponding domestic industry |
| c． |
Article 4.2(b) does not allow such a disconnect between the serious injury and the increase in imports
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| 3． |
In this case, the ITC also failed to ensure that it did not attribute the effects of other causes to flat-rolled steel imports, and thus failed to meet the test of Article 4.2(b) second sentence
| a． |
Unsubstantiated conclusions that imports caused more injury than each alternative cause of injury cannot substitute for "separating" and "distinguishing" serious injury caused by such factors |
| b． |
For flat-rolled steel products, the ITC acknowledged myriad factors other than increased imports, but made no attempt either to "distinguish" and "separate" these factors, or to explain how injury caused by these other sources was not being attributed to imports |
| c． |
The ITC also dismissed economic analysis that sought to separate and identify the relative role of different causes
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| d． |
The ITC entirely ignored the cumulative effect or interrelation of other causes
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| e． |
The ITC improperly reached conclusions about the broad category "flat-rolled steel," even when the effects of other factors could only be realistically assessed for individual products
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| f． |
The ITC's conclusion that imports were a "substantial cause" of serious injury is therefore inconsistent with Articles 2.1 and 4.2(b), as the ITC failed to demonstrate that serious injury caused by other factors was not attributed to imports
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| 4． |
The ITC failed to establish causation with respect
to tin mill products |
| 5． |
In this case, the ITC also failed to establish
causation for other products |
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| F． |
The Safeguard Measure Is Inconsistent With Articles 2.1 and 2.2 Because the Sources of Imports Covered by the Investigation Do Not Parallel the Sources of Imports Within the Scope of the Measure
| 1． |
The Agreement clearly requires the safeguard measure to parallel the injury determination |
| 2． |
U.S. law requires the President to exclude NAFTA imports from safeguard measures under certain circumstances |
| 3． |
The ITC conducted only a cursory analysis of non-NAFTA imports to support its recommendations to exclude such imports from the measure |
| 4． |
As in U.S. - Wheat Gluten and U.S. - Line Pipe the ITC failed to provide a "reasoned and adequate explanation" that explicitly established causation by non-NAFTA imports |
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| G． |
The Measure Imposed Is More Restrictive Than Necessary, and Therefore Is Inconsistent With Articles 3.1 and 5.1 of the Agreement on Safeguards
| 1． |
Articles 3.1 and 5.1 require the measures to be limited only to the extent necessary to fulfill the intent of the Agreement
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| 2． |
The ITC violated Article 5.1 because it failed to tailor the measure by "distinguishing and separating the injurious effects of other factors"
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| 3． |
Even if the ITC's findings pursuant to Article 5.1 were acceptable, the President imposed safeguard measures on most products that are more restrictive than the ITC's recommendations, without investigation or explanation, in violation of Article 3.1
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| H． |
The Safeguard Measures Are Inconsistent With Article 2.2 of the Agreement on Safeguards and Article I:1 of GATT 1994 Because They Exempt Imports From Non-Developing-Country Members With Which The United States Has Signed Free Trade Agreements
| 1． |
Article 2.2 of the Agreement on Safeguards and Article I:1 of GATT 1994 require most-favored-nation application of safeguard measures, with very limited exceptions
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| 2． |
The special treatment the United States accorded NAFTA countries under Sections 311 and 312 of the NAFTA Implementation Act in this case violates Article 2.2 and GATT Article I:1
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| 3． |
The special treatment the United States accorded Israel under Section 403 of the Trade and Tariff Act of 1984 in this case is a violation of Article 2.2 and GATT Article I:1 |
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IV．CONCLUSION
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ANNEX A（PDF）
ANNEX B（PDF）
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