Us-carbon steel (India): Multi-product firms and the cumulation of products

Abstract

One of the key findings in US-Carbon Steel (India) deals with the appropriate method to determine material injury when imported products are subject to simultaneous anti-dumping and countervailing duty (CVD) investigations. Along with addressing a number of legal issues concerning CVD investigations, the Appellate Body clarified restrictions on cross-cumulation of injury, essentially prohibiting the current US practice, and implicitly raising the burden of proof for parallel claims of dumping and subsidies. This decision is justified on economic grounds, where cumulation imposes a counterfactual scenario against which marginal damages of dumping and subsidies by each country cannot be properly evaluated. However, what the legal rulings by the Appellate Body did not recognize is the economic reality that many like products produced by the firms alleged to have received subsidies were selectively absent from the investigation, which more generally complicates the assessment of injury in dumping and subsidy cases.