Semi-conductor

Semi-conductor in Global Commerce Policy

In this regard, semi-conductor is: a dispute with the United States and Japan brought before the GATT Council by the European Economic Community (EEC) in 1986. The case made by the EEC stemmed from an arrangement made between the United States and Japan in 1986 concerning trade in semi- conductors. This provided for better market access for imported semi- conductors in Japan and the monitoring of export prices by the Government of Japan to prevent dumping in the United States. The provisions on monitoring and dumping were applicable to third-country markets. Japan used its COCOM enforcement mechanism to monitor export prices which caused delays in the granting of export approvals. The EEC claimed that (a) the Japanese monitoring measures, especially those applied to third-country markets, contravened Articles VI (Anti-dumping) and XI (General Elimination of Quantitative Restrictions), (b) the provisions for access to the Japanese market contravened Article I (General Most-favoured-nation Treatment), and (c) the lack of transparency surrounding the whole issue contravened Article X (Publication and Administration of Trade Regulations). The entries on trade policy are here. It argued that third-country monitoring was aimed at ensuring, now that the arrangement had increased prices in the United States, that United States companies would not be disadvantaged in these markets. Japan said that monitoring was mere watching. The entries on trade policy are here. In cases when exports were made at prices “extremely lower” than the cost, MITI (Ministry of International Trade and Industry) might communicate its concern to the manufacturer. The EEC doubted that mere watching could ensure the prevention of dumping. Third-country monitoring contravened in any case Article VI which provided for the exclusive right of the importing country to decide whether to take action against dumping. Japan responded that Article VI and the Anti-dumping Code did not contain provisions concerning actions taken by exporting countries to prevent dumping. Nor did they provide for prohibiting such measures, if they were non-restrictive, by exporting countries. The EEC then considered that third-country market monitoring contravened Article XI by raising artificially Japanese export prices for semi-conductors through government intervention, and that these restrictive efforts were universally recognized. Japan insisted that monitoring was not intended to prohibit or restrict trade. The EEC considered also that Article I had been infringed because Japan applied monitoring to some countries only, and that it was unclear how Japan administered the system. Japan replied that the markets monitored accounted for practically all of its exports of semi-conductors. The United States argued that it was not receiving preferential access to the Japanese market, that the EEC’s claim that the monitoring measures were incompatible with Article VI had no foundation in fact or law, that the arrangement did not require, or even suggest, quantitative restrictions within the meaning of Article XI, that Japan was monitoring virtually all exports, thus causing no infringement of Article I, and that both parties had put considerable effort into transparency. The panel first considered the claims concerning Article XI and found that the request to Japanese companies not to export semi-conductors at prices below company-specific costs to GATT members other than the United States, combined with the complex system of monitoring price, was inconsistent with Article XI, as was the system of administering export licences. The entries on trade policy are here. It also found that the evidence submitted did not demonstrate preferential market access to Japan by United States firms in contravention of the most-favoured-nation clause. The panel held that Article VI was silent on actions by exporting countries to prevent dumping, and that it was therefore not a justification for export restrictions or export price measures. The entries on trade policy are here. It also noted that Article VI was silent on the right of exporting countries to impose anti-dumping measures on their exports.[1]

Semi-conductorin the wold Encyclopedia

For an introductory overview on international trade policy, see this entry.

Resources

Notes and References

1. Dictionary of Trade Policy, “Semi-conductor” entry (OAS)

See Also