A Curious Case of Unreasonable Profit: US – OCTG (Korea)

Anti-dumping investigations involve a highly technical process of dumping margin calculations that use voluminous and complex data. Investigating authorities often find that ideal sources of such data enabling accurate calculations are unavailable. While the WTO Anti-Dumping Agreement (ADA) sets out the basic rules on anti-dumping investigations, it provides a certain level of flexibility and discretion to investigating authorities. However, such flexibility may lead to disputes and abuse by investigating authorities. Article 2.2.2 of the ADA, which establishes the rules regarding the calculation of a reasonable amount of profit for constructed value, is one such example. The provision envisages situations in which the actual data of relevant profit are unavailable and provides three alternative sources of data to be used in such situations. In the US – OCTG (Korea) case in 2017, the key issue was the US investigating authority’s use of a controversial source for the calculation of a reasonable amount of profit under one such alternative. While the panel ruled that the US investigating authority’s use of the source was inconsistent with Article 2.2.2, the issues raised in the case and the difficult questions the panel did not answer laid bare the ambiguities and incoherence in the ADA that can be abused by investigating authorities. WTO Anti-Dumping Agreement, WTO Panels, Constructed Value, CV Profit, USDOC, Anti-Dumping Investigation, US – OCTG (Korea), Reform, Best Information Available