Japan and the United States have agreed to hold bilateral consultations over a Japanese complaint of a 1916 U.S. federal antidumping law.
Government officials said the consultations, to start Wednesday in Geneva, are the first stage of the World Trade Organization’s dispute-settlement procedures.
The WTO is the Geneva-based watchdog on international commerce. The agreement to hold consultations comes one month after Japan filed a complaint Feb. 11 with the WTO over the U.S. Antidumping Act of 1916, claiming that the old law is in violation of international trade rules set by the WTO.
Japan’s filing of the WTO complaint came amid the broader steel-trade row with the U.S., which has been simmering in recent months amid what Japanese government and industry officials see as rising protectionist sentiment in Washington.
Last month, the U.S. Commerce Department set preliminary antidumping duties on Japanese and Brazilian hot-rolled steel imports in response to U.S. industry complaints.
Despite the agreement to hold bilateral consultations on the dispute over the 1916 U.S. law, however, the U.S. administration is unlikely to agree to either repeal the disputed law or amend it to make it compatible with the WTO rules, the government officials said.
Therefore, it is very likely that Japan will move to the second stage of the WTO’s dispute-settlement procedures by requesting the creation of a neutral panel to adjudicate the case, the officials said.
Under the WTO’s dispute-settlement procedures, Japan will be able to request the establishment of such a panel if it and the U.S. fail to reach a settlement through bilateral consultations within 60 days of the Japanese trade complaint being filed with the WTO.
Japan’s complaint was filed about three months after an American steelmaker filed a suit with a U.S. district court in November against U.S. subsidiaries of three major Japanese trading firms — Mitsui & Co., Itochu Corp., and Marubeni Corp.
Under the U.S. law in question, the U.S. subsidiaries — or their executives — of the three Japanese trading firms, if found guilty, could face imprisonment of up to one year or a fine of up to $5,000, or both.
They could also be ordered to pay to the complainant up to three times the damages it incurred as a result of their violations of the 1916 law.
Japan insists that the U.S. law is clearly in violation of the WTO rules, which, it contends, prohibits any country from taking any punitive measures against imports other than an imposition of anti-dumping duties on imported products.
The Antidumping Act of 1916 has also been criticized by the 15-nation European Union. The WTO’s Dispute Settlement Body decided earlier this year to set up a neutral panel to rule on an EU complaint over the American law. The WTO body is now selecting panel members.