WORLD TRADE
ORGANIZATIONTN/RL/W/64
13 February 2003
(03-0916)
Negotiating Group on Rules Original:  English
REPLIES TO THE QUESTIONS MADE BY THE AUSTRALIAN DELEGATION
IN DOCUMENT TN/RL/W/37
Submission by Brazil
The following communication, dated 11 February 2003, has been received from the
Permanent Mission of Brazil.
_______________
Brazil thanks Australia for the comments and questions put forward at the meeting of the
Negotiating Group on Rules in November 2002.  In order to further clarify the proposals on document
TN/RL/W/19, Brazil presents below replies to the questions raised  by Australia in document
TN/RL/W/37.
Article 11.4
Q. Australia considers that the standing req uirements for both countervailing duty and
dumping investigations should be in harmony and that the approach on countervailing duty
investigations should reflect what is practice under the ADA.
Brazil suggests that an application should be supported by at least more than 50 per
cent of the total domestic production.
• Does Brazil consider that the threshold of total production by that portion of the
domestic industry expressing either support for or opposition to the petition
should consequently also be adjusted?
Reply
The proposal is aimed at discussing whether it should be acceptable to consider an application
and initiate an investigation when the petition is supported by a small portion of the domestic industrysuch as 25 per cent, despite the fact that there was no clear manifestation of support by a majority of
the domestic industry.
Article 11.9 and Article 19
Q. Australia raised the issue during the discus sions of “tiret 80” implementation issues of
whether Article 11.9 provided for termination where the amount of subsidy is de minimis  for a
specific exporter.  Australia recalls that ASCM Article 11.9 reflects or parallels ADA Article
5.8.  WTO jurisprudence has found that the de minimis  test in Article 5.8 does not require a  de
minimis  test in Article 9.3 duty assessment procedures and therefore cannot require Members to
apply a de minimis  standard in duty assessment procedures.  The DRAMS Panel found that theTN/RL/W/64
Page 2
term “case” used in the first sentence of Ar ticle 5.8 encompassed at a minimum the notions of
an “application” and “investigation”.
• Does Brazil consider that Article 19.4 (which provides that no countervailing
duty shall be levied on any imported pr oduct in excess of the amount of the
subsidy found to exist) has any relevance in this context?
Reply
Brazil considers that Article 19.4 is relevant in the context of the proposal in question.
Articles  11.9 and 19 should be interpreted together.  The collection of countervailing duties should
only occur when the investigation has been concluded and the final determination established the
imposition of countervaling duties.  Therefore, Brazil considers that no countervailing duties shouldbe collected when the amount of subsidy is found to be “ de minimis ”:  if it is not allowed to impose
duties when the amount of subsidies is “ de minimis ”, it should not be allowed to collect duties in such
cases.
Proposal under Article 11
Q. Brazil seeks a provision within the ASCM to define the product under investigation and
provides an example relating to products destined to different market segments.
• How does Brazil relate this to ASCM Article 16?  Is there any relationship to
Article 16 or should there be?
Australia agrees that determining the scope of the “product under investigation” at the
initial stage of the investigation is importan t.  We agree that this has a bearing on what
determines the “domestic industry” and the data relevant for the injury investigation and
analysis.
Reply
Brazil considers that the definition of domestic industry (Article 16) is closely related to the
definition of “product under investigation”.  The determination of the scope of “product underinvestigation” is directly linked to the definition of “like product” and consequently to the producers
who constitute the domestic industry.  A clear definition of the scope of the “product under
investigation” would prevent a situation where the scope of the product under investigation is so
broad that the investigating authority is able to include in the investigation products which are not
produced by the importing country.
Article 12.7
Q. Australia agrees that this is an issue that merits harmonization with the  ADA.  As
Australia noted in document TN/RL/W/22 in reg ard to proposals seeking more stringent and
clearer rules on the use of “facts available”  in the ADA, Australia considers that any
consideration of clarified rules under the ADA on “facts available” should also be reflected inthe ASCM.
Australia wishes to highlight some elements of Annex II of the ADA, namely paragraph
5 and paragraph 7.  Paragraph 5 provides that “[e]ven though the information provided may
not be ideal in all respects, this should not just ify the authorities from disregarding it, providedTN/RL/W/64
Page 3
the interested party has acted to the best of its ability”.  Paragraph 7 provides that if authorities
base their findings on secondary sources, they should do so “with special circumspection”.
• Does Brazil consider that “facts availabl e” should be used by investigating
authorities in situations where a firm has provided data but the investigating
authorities may not accept the adequacy of the information?
• Does Brazil consider that recourse to “f acts available” enables the investigating
authorities to reject all information provided?
Reply
Brazil’s main objective in this proposal is to further discipline the use of “best information
available” in order to enhance transparency and avoid undue discretion when investigating authorities
decide to disregard the information presented by the interested parties.  Various factors should betaken into consideration in order to guide the use of “best information available”: how the interested
parties presented the information; whether the information  provided was partial or complete;
whether the investigating authorities have clearly formulated the questions put forward in the
questionnaires;  and whether the interested parties had the opportunity to present complementary
information or additional explanation.
• What constitutes “necessary information”?  For example, if, by law, information
cannot be revealed to third parties, would statements by interested parties
constitute “necessary information”?
Reply
Information provided on a confidential basis can be used - and considered as necessary
information -, if it is included in a non-confidential summary which allows a reasonable
understanding of the substance of the information submitted in confidence according to Article 12.4.
• Brazil suggests that Members’ WTO notifications could be specified as examples
of “independent sources”.  Given that recent WTO case law has reinforced thatnotifications have no legal effect, does Brazil consider that the use of
notifications to the Committee on Subsidies and Countervailing Measures would
give legal effect to such a notification?
Reply
Brazil considers that although the WTO notifications do not have a legal effect, they could be
used as an independent source of information which would confirm the information obtained from
secondary sources:for example, the information provided by the petitioner.
__________