. /.WORLD TRADE
ORGANIZATIONTN/RL/W/105
8 May 2003
(03-2463)
Negotiating Group on Rules Original:  English
SUBMISSION OF THE ARAB REPUBLIC OF EGYPT ON THE
CLARIFICATION OF CERTAIN PROVISIONS OF THE
ANTI-DUMPING AGREEMENT
The following communication, dated 6 May 2003, has been received from the Permanent
Mission of Egypt.
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Egypt considers that certain provisions of the Anti-Dumping Agreement are unclear and thus
difficult for investigating authorities to implement.   Egypt believes that the clarification of these
provisions falls within the scope of the mandate of the Negotiating Group.
This paper identifies some of the provisions of the Anti-Dumping Agreement, Egypt
considers necessary to clarify in the context of the on-going negotiations.  Egypt reserves its rights to
identify additional areas for clarification in the future.
1. Article 2.4.1 - Currency conversion
Article 2.4.1 of the Anti-Dumping Agreement governs the conversion of the export price in
cases where a comparison between the export price and the normal value requires such conversion.The general principle is that the conversion should be made using the rate of exchange on the date of
sale.  However, when sustained movements in exchange rates occurred during the period of
investigation or when a sale of foreign currency on forward markets is directly linked to an export
sale, investigating authorities are required to depart from the general principle in order not to affect
the fair comparison of the export price and the normal value.
While it is generally agreed that currency fluctuations may affect the comparability of the
export price and the normal value invoiced into diff erent currencies, there is no general agreement on
what constitutes “ sustained movements ” and how sustained exchange rates fluctuations should be
taken into account in converting the export price.
In investigations where the export price was affected by sustained movements of the
exchange rates, the Egyptian investigating authoritie s have used the average exchange rate prevailing
during the 60-day period preceding the date of invoice in order to take into account the exchange rates
fluctuations.  Other investigating authorities use similar averaging methods but certainly prefer to usethe exchange rate prevailing 60 days before the date of invoice to restrict the influence of the
exchange rates fluctuations on the export price.
Although Egypt believes that investigating aut horities should have a certain flexibility in
minimising the effects of exchange rates fluctuations, it also considers that Members should agree on
certain principles in order to ensure the consistent implementation of Article 2.4.1.TN/RL/W/105
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In addition, Egypt considers that it is necessary to clarify Article 2.4.1 since the 60-day grace
period provided for therein may, in certain circumstances, be interpreted as allowing exporters and
foreign producers to delay the submission of their questionnaire responses.  Egypt is of the opinion
that the purpose of Article 2.4.1 is not to grant exporters and foreign producers concerned an
additional delay to reply to the questionnaires received, when they consider that the fluctuation of theexchange rates affects their export price.
In view of the foregoing, Egypt considers that it is necessary that Article 2.4.1 be clarified in
the context of the current negotiations.  Indeed, if Article 2.4.1 is left unchanged, it will not provide
any helpful guidance to investigating authoritie s on how to take into account exchange rates
fluctuations in the determination of the export price.
2. Footnote 9 – Material retardation
Footnote 9 of the Anti-Dumping Agreement provides that “under this Agreement the term
‘injury’ shall, unless otherwise specified, be taken to mean material injury to a domestic industry,
threat of material injury to a domestic industry or material retardation of the establishment of such an
industry” .  While Egypt considers that both the term “ material injury ” and the term “ threat of
material injury ” are sufficiently clear, it considers that the term “ material retardation ” needs to be
clarified so as to enable investigating authorities to determine in which circumstances there is material
retardation.
The definition of the term “ material retardation”  is intimately connected to the definition of
the term “ new industry”  since material retardation only concerns incipient industries.  Egypt considers
that it is essential not to restrict the definition of the term “ new industry ” to industries which are being
established from zero.  As a developing country, Egypt is particularly concerned by the situation of
embryonic, restructuring and recently privatised industries.  All these types of industries, althoughdifferent, have in common with new industries a limited level of development and/or a new
organisation.  Egypt considers that if these types of industries were not included in the definition of
“new industry” , the concept of material retardation defined under footnote 9 would only apply to a
very limited number of cases and would fail to sufficiently take into account the situation in
developing and least developed countries.
In addition to defining the term material retardation, Members should identify tests similar to
those set forth in Article 3 of the Anti-Dumping Agr eement with respect to material injury and threat
thereof in order to assist investigating authorities to determine in which circumstances material
retardation occurs.  Should material retardation remain an imprecise concept, there is a greater risk of
misuse by investigating authorities.
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