WORLD TRADE
ORGANIZATIONTN/RL/W/92
1 May 2003
(03-2348)
Negotiating Group on Rules Original:  English
RESPONSES FROM CANADA TO CERTAIN QUESTIONS POSED BY KOREA
IN TN/RL/W/65, AUSTRALIA IN TN /RL/W/62, EGYPT IN TN/RL/W/79
AND INDIA IN TN/RL/W/80
The following communication, dated 1 May 2003, has been received from the Permanent
Mission of Canada.
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KOREA - TN/RL/W/65 - KOREA’S COMMENTS ON CANADA’S SUBMISSION ON THE
ANTI-DUMPING AGREEMENT (TN/RL/W/47)
Q1. Article 2.2.1 provides two time frames: (1) an ‘extended period of time,’ normally to be
one year in accordance with footnote 4, within which period the authorities shall determine if
the sales below cost was made in substantial quantities; and (2) a ‘reasonable period of time,’
undefined in the present text, within which sales sh all be made at prices to recover all costs.  In
Canada’s practice how is “a reasonable period of time” defined?
Reply
The term “reasonable period of time” is broadly defined in the last sentence of Article 2.2.1 of
the WTO Anti-Dumping Agreement (i.e. “If prices which are below per unit costs at the time of sale
are above weighted average per unit costs for the period of investigation, such prices shall be
considered to provide for recovery of costs within a reasonable period of time”).  However, this
provision does not define or provide any guidance regarding the appropriate length of the “period of
investigation” or whether it should necessarily be the same as the “extended period of time” referredto in the first sentence of Article 2.2.1 of the Agreement.
In respect of Canadian practice, the period used to examine the profitability of domestic sales
of like goods is known as the “profitability analysis period” and is generally a 12 – 15 month period.
The same period is used to establish the “extended  period of time” and for determining whether the
sales have been made in “substantial quantities” and for determining the “reasonable period of time”
as referred to in Article 2.2.1 of the Agreement.
Q2. In Canada’s view, could a WTO member ignore the sales below cost made during a
period of investigation for the simple reason that  sales made at a loss during the period was in
substantial quantities, namely 20 per cent, without considering if all costs were recovered within
a reasonable period of time?
Reply
Canada believes that a WTO Member may only reject sales made at a loss when all of the
conditions in Article 2.2.1 have been satisfied .  As such, sales that are made at a loss within anTN/RL/W/92
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extended period of time in substantial quantities may only be rejected if the prices that are below per
unit costs at the time of sale are not above weighted average per unit costs of like goods for the period
of investigation .  It is only when this final condition is met that the sales may be rejected for the
reason that they did not recover their costs within a reasonable period of time.
INDIA – TN/RL/W/80 - CLARIFICATIONS SOUGHT BY INDIA ON THE SUBMISSIONS BY
THE UNITED STATES (TN/RL/W/35) AND CANADA (TN/RL/W/47)
Q.1 According to Canada, in order to more closely parallel the scope of the injury
investigation, consideration should be give n to amending Article 5 to require that, when
examining an application for the initiation of  an investigation, authorities also consider
information on factors other than dumping that may be contributing to the injury alleged.  It isnot clear how an investigating authority can be reasonably expected to know these “other
factors” which are normally brought to the knowl edge of various interested parties during the
course of an investigation and not at the time of initiation of investigation.  Is Canada suggesting
that the petition itself contain information on “other factors” or is it the suggestion that the
investigating authority should undertake a detail ed analysis of “other factors” prior to the
initiation of an investigation?
Reply
Canada accepts that the examination of an app lication at the initiation stage is for accuracy
and adequacy and certainly does not wish to imply that an investigation is required to determinewhether an investigation is warranted.  However, Canada submits that the scope of the examination of
an application at the initiation stage should closely parallel the scope of the subsequent injury
investigation and, insofar as readily available information on other factors may have a direct bearing
on the accuracy of an application and its adequacy as a basis for the initiation of an investigation, it
ought to be considered in the initiation decision.  Fulfilling this requirement could, for example, take
the form of guidelines issued by the authorities to  applicants on the proper content of an application
with respect to those other factors.
Q2. According to Canada the investigating auth orities could also be explicitly required to
conduct an “objective” assessment of the degree of industry support for an application and torefrain from taking any action that would have a foreseeable effect on the outcome of such a
determination.  Could Canada indicate the specific change it desires in Article 5 of the Anti-
Dumping Agreement?  It is also not clear as to what specific action Canada is referring to that
could have a foreseeable effect on the outcome of a standing determination.  Could Canada
elaborate further on this aspect?
Reply
Canada would like to emphasize the need to clarify the Agreement so that the requirement for
an objective assessment of industry support is more clearly articulated.  In Canada’s view, the
objectivity of an assessment is compromised when, for example, a Member at any time provides
domestic producers with a financial incentive to support an application, or its investigating authoritysolicits support for an application .  These considerations could be explicitly reflected in the text of
Article 5.
Q3. Could Canada clarify why the existing provisions of Article 6.2 of the Anti-Dumping
Agreement is considered an inadequate proced ure as far as public hearings is concerned?TN/RL/W/92
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Reply
While Article 6.2 provides for meetings between  parties with opposite interests, there are
specific procedural fairness (due process) elements that are not adequately reflected in that provision.
In this regard, while the calculation of dumping margins is largely an arithmetic exercise, the abilityto test the allegations and evidence of parties adverse in interest (e.g., through the right to present
expert witnesses and to cross-examine opposing witnesses in a quasi-judicial setting) is particularly
important in injury and causality determinations, and is  integral to the ability of a party to fully defend
its interests.  Canada believes that stricter adherence to the requirements of procedural fairness would
contribute to fairer and more transparent determinations.
Q4. According to Canada there are numerous divergences between similar provisions of the
ADA and the ASCM.  Consideration should be given to addressing these divergences in these
negotiations so that, where appropriate, differences in similar provisions of the two agreements
are eliminated.  Could Canada clarify whether any harmonization between the Anti-Dumping
Agreement and ASCM should, in its view, be limi ted to the investigation procedure or it should
extend to other issues?
Reply
Canada’s proposal mainly relates to investigative procedures .  However, Canada would
welcome discussions on other divergent aspects of the Agreements that may be proposed by other
WTO Members.
Q5. Canada has suggested that consideration be given to whether, and under what
conditions, initiations of investigations could be made subject to a swift dispute settlementprocedure under the DSU.  Could Canada clarify whether its proposal would require an
investigation to be suspended during the course of DSU proceedings if the exporting country
resorts to such proceedings?
Reply
As indicated in Canada’s submission, Canada is prepared to discuss various approaches that
could apply to a mechanism for swift dispute resolution .  The question of the status of an investigation
pending the outcome of a “swift dispute settlement procedure” is one that needs to be addressed,
however, at this point, Canada has no firm position on that issue .  We would like to point out that the
European Community recently submitted a helpful paper (TN/RL/W/67), which provides food for
thought on this proposal.
Q6. While discussing the problem of repeated dumping Canada has suggested that the
underlying trade distorting practices that cause trade remedy responses need to be examined.
Could Canada explain how any “underlying policy or practice” in the exporting country can be
addressed in the Anti-Dumping Agreement fram ework? Anti-Dumping Agreement provides for
specific action against dumping and not against any other underlying practice or policy that
may be the cause of the dumping.  Is Canada seeking to expand the scope of the Anti-Dumping
Agreement to provide for action to counter practices and policies apart from dumping?
Reply
In this regard, Canada would note that the Doha Declaration encompasses the identification of
provisions relating to “disciplines on trade distorting practices”.  Canada’s submission indicates our
willingness to discuss the issue.  At this time we  cannot predict what the results of that discussion
might be.TN/RL/W/92
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AUSTRALIA - TN/RL/W/62 - COMMENTS FROM AUSTRALIA ON CANADA’S SUBMISSION
ON THE A-D AGREEMENT (DOCUMENT TN/RL/W/47)
Q1. In regard to public hearings, Canada proposes that consideration be given to a
requirement for public hearings “or other appropriate means by which interested parties can
present evidence and views.” We would be intere sted in elaboration of what Canada envisages
by “other appropriate means.”
Reply
With respect to this statement, Canada wishes to note that the phrase “other appropriate
means” is a quotation from Article 3 of the Safeguards Agreement.  Canada would like to emphasize
the importance of a public hearing process with respect to injury determinations due to the nature of
the facts at issue in these determinations.  A public hearing process could include oral and /or written
hearings.  The “other appropriate means,” in Canada’s view, could include a provision for in-camera
sessions, so that parties or their representatives have an opportunity for the provision and testing ofconfidential information.  We would also not want to forestall the discussion of other processes or
procedures that other Members may wish to present as appropriate means for the provision and testing
of evidence with respect to injury determinations.
EGYPT – TN/RL/W/79 - PRELIMINARY COMMENTS AND QUESTIONS BY THE ARAB
REPUBLIC OF EGYPT ON THE CONTRIBUTIONS SUBMITTED IN THE FRAMEWORK OF
THE DOHA NEGOTIATIONS ON THE ANTI-DUMPING AGREEMENT AND ON THE
AGREEMENT ON SUBSIDIES AND COUNTERVAILING MEASURES
Q1. It is suggested to improve the access of int erested parties to information.  According to
Canada, this might include greater recourse to disclosure of information under protective order
with appropriate penalties that discou rage the misuse of such information
What is suggested by “greater recourse to disclosure of information?”How can it be practically ensured that inte rested parties to which sensitive information
has been disclosed will not misuse this information?
Reply
Canada believes that the ability to disclose confidential information to counsel for a party and
to expert witnesses acting under the direction and control of such counsel could result in higherquality determinations.
However, because certain information provided to an investigating authority by a firm is
proprietary, and in recognition of the commercial sensitivities associated with such proprietary
business information, appropriate penalties are necessary to discourage the breach of a protectiveorder by using such information for purposes than that for which it was provided.  Such penalties or
sanctions could include fines, and limitations on the ability of counsel or an expert witness that had
breached a protective order, to participate in future investigative proceedings.  These penalties may, of
course, be in addition to any court-awarded damages that may be available in certain member
jurisdictions.
Q2. What does Canada envisage by a “swift dispute settlement procedure”?  How would
such procedures be practically conducted?TN/RL/W/92
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What would be the status of the targeted investigation during the dispute settlement
procedure? In terms of deadlines, how would compliance with the timing requirements of the
ADA be ensured?
Reply
As indicated in Canada’s submission, Canada is prepared to discuss various approaches that
could apply to a mechanism for swift dispute resoluti on.  The question of the status of an investigation
pending the outcome of a “swift dispute settlement procedure” is one that needs to be addressed,
however, at this point, Canada has no firm position on that issue.  We would like to point out that the
European Community recently submitted a helpful paper (TN/RL/W/67), which provides food for
thought on this proposal.
Q3. With regard to de minimis margin of dumping, Egypt would like to ask Canada to
clarify whether it considers that any change in the de minimis level should apply equally to both
developed and developing countries?
Reply
Egypt’s understanding is correct on this point.  It is Canada’s position that any modification
to de minimis  levels should be made applicable to exports of all Members.
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