WORLD TRADE
ORGANIZATIONTN/RL/W/79
24 March 2003
(03-1681)
Negotiating Group on Rules Original:  English
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
Submission from Egypt
The following communication, dated 20 March 2003, has been received from the Permanent
Mission of Egypt.
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1. General submission from Canada (TN/RL/W/47)
Introduction
In its Proposal, Canada is seeking to find ways to strengthen the disciplines so as to achieve
greater international convergence of methodologies, greater predictability in the application of the
rules and to eliminate undue disruptions to international trade.
As a preliminary remark, Egypt would like to emphasize that the purpose of the ADA is to set
a general framework which contains basic principles applicable to all WTO Members.  Although a
certain convergence may result from the application of the ADA by different investigating authorities,
the convergence of the different domestic regulations should not be one of the aims of the ADA.  The
purpose of the ADA is not to foresee all the aspects of anti-dumping proceedings.  It is important that
a certain margin of appreciation should be left to investigating authorities.
Egypt would like to submit the following preliminary comments:
(a) Transparency and procedural fairness
Canada proposes to increase convergence among WTO Members in the application of rules
concerning transparency and procedural fairness.  In Egypt’s view, it is essential that, when ensuring
transparency and procedural fairness, a right ba lance is also maintained between the obligations
imposed on interested parties and on investigating authorities.
Initiation standardsCanada suggests strengthening the requirements for the initiation of anti-dumping
investigations. Egypt believes that such an amendment is not necessary.  The object and purpose of
the initiation requirements is to establish a bala nce between the competing interests of the domestic
industry in the importing country in securing initiation and of the exporting country in avoiding theTN/RL/W/79
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potentially burdensome consequences of an investigation initiated on unmeritorious basis.  This
purpose is achieved through the current provisions of the ADA which clearly require that
investigating authorities initiate an investigation only where substantiated evidence of dumping,
material injury and causal link has been provided to them.
(i) Disclosure of information
It is suggested to improve the access of inte rested parties to information.  According to
Canada, this might include greater recourse to disclosure of information under protective order with
appropriate penalties that discourage the misuse of such information.
Questions : - What is suggested by “ greater recourse to disclosure of information ”?
- How can it be practically ensured that interested parties   to which sensitive information has
been disclosed will not misuse this information?
(ii) Public hearings
Canada proposes to include within the ADA a public hearing requirement.  During the public
hearing, interested parties would be able to di sclose evidence and present their positions and also
given the opportunity to respond to the submissions of  other parties.  It is Egypt’s view that the
imposition of additional procedural requirements such as the holding of public hearings is not
necessary.  The contradictory aspect of the procedure is already achieved through the existing
procedural requirements set forth in the ADA.  An y further procedural requirements would be unduly
burdensome for WTO Members, especially for new users of the Agreement which already have
difficulties with the implementation of the current provisions.
(iii) Explanation of determinations and decisions
Canada suggests bolstering the information requirements of Article 12. Canada’s suggestion
could create difficulties for investigating authorities from developing countries to implement,
considering the very short deadline within which findings must be reached under the ADA.
(b) Clarifications:
In addition to the changes mentioned above, Canada proposes to further clarify and simplify
rules of the ADA.  At the outset, we believe that proposals aimed at clarifying the ADA only achieve
their intended goal if they do not create new unnecessary procedural requirements for investigatingauthorities, especially in developing countries.
(i) Ordinary course of trade
Canada proposes to define, in the light of the experiences of Members, the conditions for
determining when sales are not made in the “ ordinary course of trade ” or do not permit a “proper
comparison” to be established.
Egypt believes that each investigating authority should retain the possibility of determining
on a case-by-case basis when sales are made in the ordinary course of trade or permit a proper
comparison.  For the reasons mentioned above, the de finition of strict criteria would not serve the
intended simplification purpose and would impose additional unnecessary obligations on investigating
authorities.TN/RL/W/79
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(ii) Profitability test
According to Canada, it would be useful to explore the possibility of further expanding the
conditions under which sales made at a loss would not be excluded for the purpose of determining the
normal value, under Article 2.2.1.
Egypt believes that each investigating authority should retain the possibility of determining
on a case-by-case basis when sales are profitable.  For the reasons mentioned above, the definition of
strict criteria would not serve the intended simplification purpose and would impose additional
unnecessary obligations on investigating authorities
(iii) Cost Allocation
The clarification sought by Canada in this respect is aimed at providing an answer to the
difficulties encountered by Canadian companies in anti-dumping proceedings concerning specific
types of products.  Egypt considers that the aim and purpose of the ADA is not to set forth strict rules
governing the determination of cost allocation.  Cost allocation is to be determined on a case-specific
basis.
(iv) Like product
Egypt believes that the definition of the term “ like product ” which is provided in Article 2.6
does not require to be clarified.  In this respect, could Canada please  explain how products alike in all
respects or with closely resembling characteristics can be considered as not competing in the same
market.
(v) Domestic industry
It is proposed to define the notion of “ major proportion ” and to strengthen the standing
requirements of in the context of the initiation of investigations.  The drafters of the ADA deliberately
provided that an investigation can be initiated even if it is filed with the support of those domesticproducers representing only a minority of the producers of the like product as long as they represent
over 50 per cent of those producers expressing their support for or opposition to the petition.  Egypt
consider that the minimum standing requirement imposed under the ADA guarantees the standing of a
complaint while limiting the discretion of investigating authorities.  Also, we are of the opinion that a
change in the minimum standing requirement would constitute a substantial change to the ADA and
would go beyond the mandate of the Doha Declaration.
(vi) Lesser duty
It is proposed to consider appropriate methodologies for the calculation of a duty lesser than
the full margin of dumping but adequate to remove the injury to the domestic industry.
The application of the lesser duty rule should be left to the discretion of each member.  It
should be borne in mind that an obligation to apply.  The lesser duty rule would necessarily entail
more detailed injury calculations since undercutting/underselling margins would need to be
determined for each co-operating exporter.  However, Egypt could consider the lesser duty rule under
the S & D treatment to developing countries.
(vii) Sunset reviews
Sunset reviews were introduced in the ADA during the Uruguay Round Negotiations in
exchange of an explicit limitation of the duration of anti-dumping orders to five years.  It is true thatTN/RL/W/79
Page 4
most sunset reviews result in a mechanical continuation of existing measures.  The duration of sunset
review investigations furthermore is often too long.  The current system could be improved by
providing, first, that the level of duties can be modi fied in the context of a sunset review in order to
reflect the new dumping/injury determinations and, second, that sunset reviews must be completed by
a prescribed time limit (e.g., 12 months).  However, Egypt is reluctant to the insertion in the ADA alist of factors that authorities would have to cons ider in determining whether the expiry of duty is
likely to lead to a continuation or recurrence of dumping and injury.
(viii) Reviews
Egypt  agrees with Canada that the provis ions of the ADA concerning reviews should be
clarified in order to enable Members to know precisely which provisions relating to initial
investigation also apply to review investigations.
(c) Improvement:
(i) Initiation standards
Egypt does not believe that authorizing swift dispute settlement procedures in the event that a
Member considers that an investigation has been initiated in violation of the initiation requirementsset forth in the ADA will ensure a better compliance with these requirements.  Indeed, authorizing
Members to initiate dispute settlement proceedings at an earlier stage will not guarantee stricter
compliance with the initiation requirements.  In addition, Egypt believes that such a procedure would
generally be used as a procedural impediment in order to obstruct duly initiated investigations.
Finally, Egypt considers that the Canadian proposal gives rise to the following questions.
Questions : - What does Canada envisage by a “ swift dispute settlement procedure ”?  How would
such procedures be practically conducted?
- 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?
(ii) De minimis margin of dumping
Question:  -  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?
(iii) Public interest and competition policies
This question is a matter of domestic policy.  Egypt  believes that the decision to initiate an
investigation aimed at determining the national interests at stake should be left to the discretion of
each Member who should also remain free to evaluate what weight to give to such domesticconsiderations in its determination.
(iv) Duty refunds
Egypt does not support Canada’s proposal to require Members to refund anti-dumping duties
imposed in violation of the ADA.  Indeed, as stated by Canada in introduction, such proposal is incontradiction with the WTO Agreements.TN/RL/W/79
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(v) Duty imposition
Regardless of the system on the basis of which anti-dumping duties are determined, Egypt
considers that the ADA provides clear and predictable rules.  Also, contrary to what Canada appears
to imply, we do not believe that the imposition of anti-dumping duties on a retrospective basis allows
for a more rapid resumption of non-injurious trade.  We consider that it is important that Members beallowed to choose their anti-dumping duties determination system since the retrospective system is
more burdensome for developing Members to enforce.
2. Replies by the Dumping Friends to questions of contributions TN/RL/W/6
(TN/RL/W/45)
In its contribution TN/RL/W/45, the Dumping Friends reply to comments and questions
raised by Australia, the EU and the US on their previous Paper TN/RL/W/6.
(i) Sales in the ordinary course of trade
It is proposed to further clarify Article 2.2.1. and to provide a definition of a “ reasonable
period of time ” which would normally cover more than one year.  Egypt is not convinced that it is in
the interests of individual members to have more detailed rules on the cost-recovery test.
(ii) Constructed value
For the Dumping Friends the discretion left to in vestigating authorities in the determination of
dumping is potentially abusive.  As underlined in Australia’s comments, Article 2.2.2. ensures a
certain discretion to investigating authorities given the myriad of circumstances they may be facedwith.  Therefore, Egypt considers that the Rules pertaining to the constructed normal value are
sufficiently clear and do not require any clarification or improvement.
(iii) Cyclical Markets
The ADA contains in Article 2.4 the requirement to make “ due allowance for any differences
which are also demonstrated to affect price comparability ” and may be due to the fact that the
high/low seasons in the domestic and export markets are following different cycles. Egypt considers
that this provision provides sufficient guidance to address the issue of cyclical markets and that it is
not necessary to elaborate a more specific requirement.
(iv) Cumulative assessment of injury
Although Egypt does not consider that it is in the interests of individual members to support
the strengthening of the requirements provided for in Article 3.3. of the ADA, we can not agree with
Australia that the work of the Negotiating Group on Rules should take as a starting point for the work
of the Working Group on Implementation.  Therefore, Egypt believes that this issue should be
examined in the Ad-hoc group to avoid duplication of work.
(v) Causal relationship between dumping and injury
In view of the comments from Australia and the reply of the Dumping Friends to the question
of the EC, Egypt considers that Article 3.5, as interpreted by panels and Appellate Body reports, does
not require to be clarified or improved.  It is not necessary to amend the ADA in order to insert the
decisions of the Dispute Settlement Body concerning the ADA.TN/RL/W/79
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Egypt is concerned that the paper is basically proposing to go back to the pre-Tokyo Round
situation when it had to be established that dumped imports were the principal cause of injury.  It
should be noted that this requirement was abandoned during the Tokyo Round negotiations. Egypt
considers that the current legal discipline on causation is appropriate and that the above proposal
represents an unnecessary change to the Anti-Du mping Agreement rather than a “clarification or
improvement” as envisaged under paragraph 28 of the Doha Declaration.
Furthermore, Egypt considers that this new proposal places an extra, unreasonable burden on
investigating authorities to measure the extent to which “other causes” of injury have contributed to
the material injury suffered by the domestic industry.
(vi) Threat of material injury
The Dumping Friends propose to include a specific requirement for an assessment of all the
factors required to the determination of threat of injury.  Egypt thinks that further detail regarding
factors to be taken into account in order to establish threat of injury is not necessary.  As currently
drafted, the Agreement includes sufficient guidance on threat of injury.  The interpretation of the
terms “ foreseen and imminent ” should not be defined but rather be left to the appreciation of
investigating authorities on a case-by-case basis.
(vii) Facts available
The situation described in the paper is based on the DSB case USA-hot-rolled steel.  The DSB
found that the use of “adverse” facts available by the USA was not justified since the Japaneserespondent had acted to the best of its ability…  However, the use of “neutral” facts available was not
condemned since the investigating authority missed essential information for its determinations.  In
Egypt’s view, the current legal discipline is satisfactory and contains the right balance between the
rights of respondents and the need for the investig ating authority to reach meaningful determinations.
(viii) Lesser duty rule
The application of the lesser duty rule should be left to the discretion of each member.  It
should be borne in mind that an obligation to apply.  The lesser duty rule would necessarily entail
more detailed injury calculations since undercutting/underselling margins would need to be
determined for each co-operating exporter.  However, Egypt could consider the lesser duty rule under
the S & D treatment to developing countries.
(ix) Sunset of anti-dumping orders
Sunset reviews were introduced in the WTO Anti-dumping Agreement during the Uruguay
Round negotiations in exchange of an explicit limitation of the duration of anti-dumping to five years.
It is true that the duration of sunset review investigations is often too long.
The current system could be improved by providing that sunset reviews must be completed by
a prescribed time limit (eg. 12 months)
(x) Public interest
Egypt considers that the conduct of a public interest test should remain a matter of domestic
policy left to the discretion of each Member.  Indeed, the Government of Egypt does not consider that
the WTO should oblige Members to conduct public interest investigations.  Such investigations aim
exclusively at protecting the interests of domestic users and consumers.  Each Member must remainTN/RL/W/79
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free to decide whether or not the interests of domestic users and consumers should be taken into
account in the decision to impose anti-dumping duties.
Furthermore, Egypt considers that the public in terest issue in an AD investigation is well
served by the provision of article 6.2 of the AD Agreement, which ensures that all interested partiesare entitled to the full opportunity for the defense of  their interests.  This includes the opportunity for
all interested parties to meet those parties with adverse interests so that opposing views may be
presented and rebuttal arguments offered.
3. Brazil’s replies to the questions made by the Australian delegation (TN/RL/W/64)
In this submission, Brazil is replying to the comments and questions raised by Australia
(TN/Rl/W/37) on its paper on countervailing measures (TN/Rl/W/19).
(i) Article 11.4 – Standing requirements
Brazil considers that the threshold of domestic support, which is necessary to initiate an
investigation, should be increased.
In its initial paper, Brazil suggested that an application should be supported by at least more
than 50 per cent of the total domestic production.
In response to the question of Australia concerning the necessity of adjusting the threshold of
the domestic industry expressing either support for or opposition to a petition, Brazil repliesthat its proposal is aimed at addressing situations where an application is supported by a small
portion of the domestic industry without a clear manifestation of support of the rest of the
domestic industry.
We agree with Australia that the standing requirements for both countervailing duty and
dumping investigations should be in harmony.  We note that under the AD and SCM
Agreements, the minimum threshold are identical and guarantee the standing of the applicant
while, at the same time, providing the opportunity for a portion of the domestic to oppose the
initiation of an investigation.
We consider that the silence of a portion of the domestic industry in favour or against an
application should not be interpreted as an opposition to the initiation of an investigation.Consequently, we believe that Article 11.4 of the SCM should remain unchanged in order to
enable a portion of a domestic industry to express either support for or opposition to an
application or not take any position.
(ii) Articles 11.9 and 19 – De minimis amount
Despite the findings of the Panel in the DRAMs case, Brazil considers that Articles 11.9 and
19 of the SCM Agreement should be interpreted together and that, as a result, no duties
should be collected when the amount of subsidies is de minimis.
We agree with Brazil in considering that the SCM Agreement, as well as the AD Agreement,
should be interpreted and applied as a whole.  Investigating authorities cannot be required to
reject an application or terminate an investigation under Article 11.9 and authorised to impose
and collect countervailing duties under Article 19.4 where the amount of subsidy is de
minimis.TN/RL/W/79
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(iii) Article 16 – Product under investigation
Australia and Brazil agree that it is important to define the “product under investigation” at
the initial stage of an investigation and that this concept is directly linked to the notion of
“domestic industry”.
We share the opinion of Australia and Brazil in this respect.  We consider that the product
under investigation must be clearly and precisely defined at the beginning of an investigation.
Also, we consider that there is a close link between definition of the product under
investigation and the determination of the domestic industry.  However, we do not believe
that a definition of the concept of “product under investigation” will enable investigating
authorities to more precisely determine the sc ope of an investigation since the definition of
the product under investigation is specific to each case and requires the exercise of a certaindiscretion from the investigating authorities.
(iv) Article 12.7 – Facts available
Brazil notes that the SCM Agreement does not sufficiently elaborate on the notion of “facts
available” in Article 12.7, contrary to the AD Agreement.
Again, we agree with Australia and Brazil that the rules pertaining to the use of facts available
should be similar, if not identical, in both the AD and SCM Agreement.  Also we consider
that investigating authorities should exercise great attention when the data provided to them
by the parties concerned cannot be used as a basis for a positive determination or in theabsence of any information.  However, we doubt that the rules of the AD and SCM
Agreements regulating this issue can further be clarified to the benefit of interested parties.
The decision to consider that “facts available” should be used will always depend directly
from the investigating authorities, which will consider, on a case-by-case basis, whether the
information provided to them is supported by evidence and/or complete.
4. Submission by Australia concerning the treatment of confidential and non-confidential
information under Article 6.5 of ADA (TN/RL/W/44)
Egypt considers that the question of what constitutes confidential and non-confidential
information can best be addressed at a domestic level.  Indeed, Egypt believes that investigating
authorities should retain the authority to determine on a case-by-case basis what information is to be
treated on a confidential basis.  A definition of what is to be considered as confidential informationwill not facilitate the difficulties faced by interested parties since investigating authorities will,
eventually, have to determine whether the informati on submitted to them is confidential or not.  Also,
imposing additional rules on the treatment of confidential treatment will certainly result in imposing
further constraints on investigating authorities.
5. Communication of Venezuela and Cuba on  non-actionable subsidies (TN/RL/W/41)
This proposal is formulated in the light of paragraph 10-2 of the Doha decision on
implementation –related issues and concerns which takes note of the proposal to treat measures
implemented by developing countries with a view of achieving legitimate developing goals such as
regional growth technology research, development funding production diversification, developmentand implementation of environmentally sound methods of production as non actionable subsidies.TN/RL/W/79
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Having this in mind, Egypt would like to raise the following questions:
1. How is the development dimension of subsidies to be evaluated? Could it be considered that
any subsidies with a view of promoting research and development regional growth
disadvantage regions and environmental restructuring are aimed at promoting thedevelopment?
2. The use of non –actionable subsidies proved in the past to be relatively limited given the
stringent criteria laid down in article 8 of the SCM Agreement…  Which criteria could be
adopted to allow the effective use of the category of non –actionable subsidies?
Conclusion
Egypt Reserves its full right to submit any further comments or questions during the course of
the negotiations in the Negotiating Group on Rules.
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