RESTRICTEDWORLD TRADE
ORGANIZATIONG/ADP/AHG/W/85
5 April 2000
(00-1385)
Committee on Anti-Dumping Practices
Ad Hog Group on ImplementationOriginal:  English
PRACTICAL ISSUES AND EXPERIENCE
IN APPLYING ARTICLE 2.4.2
Paper by the European Communities
The following communication has been received on 4 April 2000 from the Permanent
Delegation of the European Commission.
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BACKGROUND
Before the Uruguay Round, the EU routinely calculated dumping margins by comparing a
weighted average normal value with individual export transactions (WA/T). That changed with the
introduction of the WTO Anti-dumping Agreement. Article 2.4.2 of the WTO Agreement was
implemented as Article 2.11 of the EU’s ow n Basic Anti-dumping Regulation, and WA/T
comparisons have now become rare. There are no examples of a comparison of normal value and
export price on a transaction-to-transaction  (T/T) basis.
Article 2.4.2 of the WTO Agreement and Ar ticle 2.11 of the EU’s Basic Anti-dumping
Regulation are essentially the same. However, the EU legislation spells out why the differences in
export prices cannot be taken into account appropriately by the use of the weighted average to
weighted average (WA/WA) comparison method, i.e. that it does not reflect the full degree of
dumping being practised. In those cases, and ‘if there is a pattern of export prices which differs
significantly among different purchasers, regions or time periods’, a comparison of weighted averagenormal value to ‘ all individual export transactions’ to the EU (WA/T) may be appropriate. The
addition of the word ‘ all’ in the EU legislation makes clear that once the Commission has established
it is appropriate to resort to WA/T comparisons, this applies to all exports, and not just those to the
purchaser, region or time period where the pattern of significantly different export prices was
established.
W
EIGHTED AVERAGE TO WEIGHTED AVERAGE COMPARISON
In practice, the EU overwhelmingly uses the weighted average to weighted average
comparison method. For example, of the 47 EU anti-dumping investigations which resulted in theimposition of provisional or definitive measures, or termination, in 1999, just two used WA/T
comparisons. In fact in one of those investigations, this comparison method was only applied to one
company. All the other investigations used the WA/WA method.G/ADP/AHG/W/85
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WEIGHTED AVERAGE TO TRANSACTION COMPARISON
General
For this comparison method to be used, there must be a pattern of export prices which differs
significantly among different purchasers, regions or time periods, and the WA/WA method must fail
to reflect the full extent of dumping. As already stated, the EU uses this comparison method very
rarely now (a short example of one case where this method was used is provided at the end of this
paper). However, some price differences may still exist between the Member States of the EU.
Whether or not these different export prices (particularly among different regions) coincide with
segmentation within the single market is irrelevant –price discrimination, by pricing exports below
normal value, is condemned by the WTO, pursuant to Article VI of the GATT.
It should be remembered, though, that if all exports of a particular product under investigation
were found to be dumped, then the WA/T comparison would not result in a higher dumping margin
than a WA/WA comparison. In these circumstances, the existence of such patterns would be academic
and the EU would normally opt for the WA/WA comparison.
TRANSACTION TO TRANSACTION COMPARISON
Although the EU reserves the right to use th e T/T comparison method, it does not consider it
the most appropriate way to make comparisons. Th e decision of which individual transactions (which
often happened at different times) to select for comparison is inevitably a subjective one. Thus, the
result is not very predictable for the exporter in question. The EU feels that routine use of WA/WA
comparisons makes it much easier for exporters to calculate for themselves whether or not they are
unwittingly dumping, and to take corrective action.
DETERMINATION OF A COMPANY -SPECIFIC DUMPING MARGIN IN A PROSPECTIVE SYSTEM
Article 2.12 of the EU’s Basic Anti-dumping Regulation sets out the rules for establishing a
company-specific dumping margin  when the exporter in question exports more than one model or
type of the product concerned. It states: ‘ Where dumping margins vary, a weighted average dumping
margin may be established ’. In other words, if the product concerned falls under more than one CN
Code, or exists in different models, a weighted average of all the dumping margins will be taken.Negative dumping margins for one model/type will be treated as zero for the purposes of calculating
this average. This enables customs officers to apply one rate for all types/models of the like product.
The EU feels that this practice is both fair and proportionate, because it expresses the
dumping amount as a percentage of total turnover, which includes the non-dumped models. In otherwords, exporters get some benefit from those exports which they do not dump. In contrast, it is
interesting to note that in a retrospective system, the amount of dumping at the duty collection stage is
determined for each transaction individually.
E
XAMPLES FROM SPECIFIC CASES
In view of limited experience in recent years of anything but WA/WA comparisons, one case
where a WA/T comparison was carried out is presented as an example. In the proceeding involving
pipes and tubes originating, inter alia, in Romania1, the investigation period ran from August 1995 to
August 1996. The exporters in question exported 148 products to the EU during this period. Whenexamining whether there was a pattern of export prices which differed among time periods the
following was found:
                                                     
1 Official Journal of the European Communities 1997 L 322, p. 1.G/ADP/AHG/W/85
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Two sub-periods could be distinguished within the investigation period, i.e. August 1995 to
April 1996 and May 1996 to August 1996. Forty products, which accounted for nearly 30 per cent of
the total export volume to the Community, were sold during both sub-periods.
Export prices for 36 of those 40 products were appreciably higher during the second sub-
period than during the first, the difference in most cases being 10 per cent or more. Thus, a WA/WA
comparison would have resulted in masking the significant dumping which took place during the first
sub-period.
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