WORLD TRADE  
ORGANIZATION  TN/RL/GEN/26 
1 December 2004 
 
 (04-5233) 
Negotiating Group on Rules Original:   English/ 
                 French 
 
 
 
PROPOSAL ON LIKE PRODUCT AND PRODUCT 
UNDER CONSIDERATION 
 
Communication from Canada  
  
  The following communication, dated 30 November 2004, is being circulated at the request of 
the Delegation of Canada.  
 The submitting delegation has requested that th is paper, which was submitted to the Rules 
Negotiating Group as an informal document (JOB(04)/ 181), also be circulated as a formal document. 
 
_______________ 
 
 Introduction 
 
1.  In a previous submission to the Group
1, Canada noted that the definition of like product of 
Article 2.6 of the Anti-Dumping Agreement (ADA) and footnote 46 of the Agreement on Subsidies 
and Countervailing Measures (ASCM) would benefit fro m clarification in order to limit the scope of 
product types that can be considered as a single like product.  Several other Members have also raised 
like product as a potential issue for negotiations.2  This submission proposes an approach to clarify the 
requirements of the Agreements in this respect.   2.  In the most general sense, anti-dumping and c ountervail investigations are meant to determine 
whether dumped or subsidized imports are causing injury to domestic producers of the like products.  
In the course of these investigations, the inves tigating authorities of an importing Member must 
identify the following:  (a) the imported product to be investigated  (the “product under consideration”),  
 
(b)  the like product of domestic producers that are allegedly injured by imports of the product 
under consideration (the “dom estic like product”), and  
 (c)  in the case of an anti-dumping investigati on, the product sold in the home market of the 
exporting country (or, in some instances, to a third country) that is like the product under 
consideration (the “foreign like product”).   
 3.  These requirements are at the core of the Ag reements.  An accurate identification of the 
product under consideration and of the like products is essential to a proper understanding of the 
scope of any investigation and potential measure.   
                                                     
 
1 TN/RL/W/47, page 4. 
2 Notably Argentina in TN/RL/W/81 and Australia in TN/RL/W/91. TN/RL/GEN/26 
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Product under consideration  
 
 -  Description of the issue  
 4.  As is clear from the text of Article 2.6 of the ADA and footnote 46 of the ASCM, the 
identification of the like product hinges on the identity of the product under consideration .  In fact, as 
several other Members have noted 
3, the selection of the product under consideration is fundamental 
to determining the scope of both anti-dumping and countervailing inves tigations and of any 
potentially resulting measures.  Yet, the Agreements  do not appear to provide any real guidance on 
this question.  In this regard, the Panel in United States – Final Dumping Determination on Softwood 
Lumber from Canada , for instance, indicated that it did not see, in the ADA, a legal requirement that 
determinations be limited to a single gr oup of products sharing characteristics.4  The panel went on to 
say that, while there might be room for discussion as to whether such an approach might be an 
appropriate one from a policy perspective, whether to  require this approach was a matter for Members 
to address through negotiations. 
 5.  The lack of guidance in the Agreements on the concept of product under consideration creates 
systemic problems.  In particular, it can lend itself to Members capturing, in a single investigation, 
determination and remedy, products that can be co mpletely different in terms of their physical 
characteristics, end uses, and channels of distribution.   
 
 -  Proposed approach 
 
6.  The Agreements should be clarified by the introduction of a provision in Article 5 of the 
ADA and Article 16 of the ASCM requiring that, in  each investigation, the authorities make a 
determination of the scope of the product under consideration.  Where it is established, on the basis of 
an examination of the economic relationship amon g imports that takes into account all relevant 
product characteristics, that the scope of the inv estigation includes two or more clearly distinct 
products, the investigating authorities should be require d to make separate dete rminations of dumping 
(or subsidization) and injury for each such product.   The Agreements should also illustrate the types 
of product characteristics that may be relevant in this  context.  In Canada’s view, these relevant types 
of characteristics would be the same as those that are relevant to a determination of domestic like 
product.
5 
 7.  This approach would compel authorities to dul y consider all relevant factors in defining one 
or more products under consideration, and to prov ide adequate reasons in support of their scope 
determination.  In assessing the relevancy and wei ght to be ascribed to each characteristic, the 
authorities would retain sufficient flexibility to addr ess the factual circumstances unique to each case.   
 
“Domestic like product” and “foreign like product”  
 
 -  Description of the issue 
 
8.  The Agreements define “like product” as “a  product which is identical, i.e. alike in all 
respects to the product under consideration, or in the absence of such a product, another product 
which, although not alike in all respects, has char acteristics closely resembling those of the product 
                                                     
 
3 Notably Brazil;  Chile;  Co lombia;  Costa Rica;  Hong Kong, China;  Israel;  Japan;  Korea; Norway;  
Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu;  Singapore;  Switzerland; and Thailand in 
TN/RL/W/10 and the People’s Republic of China in TN/RL/W/66. 
4WT/DS264/R, para 7.157  
5 See paragraph 13 of this submission.  TN/RL/GEN/26 
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 under consideration.”  This definition does not give any indication as to the characteristics by 
reference to which  “identical” and  “closely resembling” products are to be determined.  
 9.  As was suggested by Australia
6 and Argentina7, Canada believes that more direct guidance 
would promote greater predictability in the application of the Agreements.  In  Japan – Alcoholic 
Beverages , the Appellate Body observed that the meaning of “likeness” in WTO provisions must be 
determined in the context of each particular provision in which it is encountered.8  In this respect, we 
believe that Members should give special considera tion to the point raised by Australia that the 
concept of “like product” is used in the ADA and in  the ASCM in two broadl y different contexts, for 
which distinct types of analysis may be required: 
 
(a) In a first context, which the ADA shares with the ASCM, authorities must identify the 
domestic like product of the producers that woul d be affected by the allegedly dumped or 
subsidized imports (Articles 3 and 4 of the ADA, 15 and 16 of the ASCM).   
 
(b) In a second context, which is specific to th e ADA, authorities must identify the foreign like 
product that will be the basis upon which the norma l value will be calculated (Article 2 of the 
ADA). 
 
10.  In the first context, the investigating aut horities need to identify the domestic like product to 
serve as the basis for an analysis of an economic na ture, i.e., the economic impact of imports of the 
product under consideration on domes tic producers of such products.  For this purpose, authorities 
should take into account all product characteristics  that bear upon an assessment of the economic 
impact of dumped or subsidized imports on domest ic producers, and the Agreements should provide 
explicit guidance to facilitate a proper assessment.  
11.  In the second context, the investigating aut horities are concerned with the selection of the 
foreign like product to serve as the basis for price comparisons that will lead to the calculation of 
margins of dumping.  Authorities usually subdivide the product under consideration into models.  For 
each model, the authority selects the identical or mo st closely resembling model of the product being 
sold in the home market of the exporting country or to a surrogate third country. Together, these 
selected models constitute the foreign like product.   However, there is no guidance in the ADA as to 
what type of characteristics must be taken into acco unt in the selection of the foreign like product.   
 
-  Proposed approach   
 
12.  Members should consider elaborating on Article 2.6 of the ADA and footnote 46 of the 
ASCM in order to provide distinct guidance on the types of characteristics that may be relevant to 
determinations of like product in the two different contexts discussed above. 
 13. First, a sentence should be added to Artic le 2.6 and footnote 46 to provide that a 
determination of the domestic like product
9 shall be based on all relevant product characteristics.  
Because the relevant characteristics to be consider ed in a domestic like product determination will 
vary according to the circumstances of each case, it would not be possible to provide an exhaustive 
list.  However, the proposed sentence should illust rate the types of characteristics that may be 
relevant.  On the basis of Canada’s experience in  dealing with these matters, these would include the 
                                                      
6 TN/RL/W/91 
7 TN/RL/W/81 
8 Japan – Taxes on Alcoholic Beverages , WT/DS8/AB/R, para 8.46 
9 That is, the identification of the product in the dom estic market of the importing Member that is alike 
in all respects to the product under consideration, or has characteristics closely resembling those of the product 
under consideration. TN/RL/GEN/26 
Page 4  
 
 physical characteristics of the products, including technical specifications and quality, and their 
market characteristics, including end uses, substitutability, pricing le vels and distribution channels.   
 14.  Second, a sentence should be added to Article  2.6 of the ADA to provide that a determination 
of the foreign like product
10 shall be based on all relevant physical characteristics of the product that 
would likely affect price, including their technical specifications and their quality.11  I n  a  m a n n e r  
similar to the proposal related to domestic like produc t, this sentence would not provide an exhaustive 
list of the physical characteristics that need to  be considered, which will of course depend on the 
circumstances of each case, notably the nature of the product.  However, as is the case with the 
proposal on domestic like product, the additional sen tence would ensure that authorities are required 
to consider all relevant physical characteristics and need to provide a well-reasoned basis for their 
decisions.   15.  This paper does not purport to represent Canada’s final views on this matter and Canada 
reserves the right to make further proposals. 
 
__________ 
 
  
                                                     
 
10 That is, the identification of the product des tined for consumption in the exporting country or 
exported to a third country that is alike in all respects to  the product under consideration, or has characteristics 
closely resembling those of the product under consideration. 
11 Of course, this clarification to Article 2.6 of the ADA would not diminish in any manner the general 
obligation of Article 2.4 that, in order to ensure fa ir comparison, authorities must make due allowance for 
differences which affect pr ice comparability, including relevant differe nces in physical characteristics and in 
non-physical ch aracteristics.