./.WORLD TRADE
ORGANIZATIONG/ADP/Q1/CHN/2
G/SCM/Q1/CHN/2
26 September 2002
(02-5164)
Committee on Anti-Dumping Practices
Committee on Subsidies and Countervailing MeasuresOriginal:  English
NOTIFICATION OF LAWS AND REGULATIONS UNDER
ARTICLES 18.5 AND 32.6 OF THE AGREEMENTS
Questions Posed by the EUROPEAN COMMUNITIES Regarding
the Notification of THE PEOPLE'S REPUBLIC OF CHINA1
The following communication, dated 24 September 2002, has been received from the
Permanent Delegation of the European Commission.
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European Community's questions with regard to  China's Transitional Review Mechanism (TRM) on
Subsidies and Countervailing Measures
• Several Articles (Art 5,7,16,18,25,26,28,34,37,48,49,54,57) of the Regulation mention different,
joint or complementary roles and responsibilities for the Ministry of Foreign Trade andEconomics Cooperation (MOFTEC) and the State Economics and Trade Commission (SETC).
Could the PRC explain, what is the exact role, function, responsibilities and hirarchical situation,
if any, of these two entities in the functioning of the PRC´s economic organisation in general and
in regard to trade defence instruments in particular?
• Art 8 of the Regulation enumerates factors which shall be considered for the determination of
injury.  The EC notes that that this provision does not list all relevant factors and indices having a
bearing on the state of domestic industry as provided in Art 15 of the WTO Agreement on
Subsidies and Countervailing Measures (ASC M).  How does the PRC ensure that the
investigating authority will not consider fewer factors than what is requested under Art 15 of the
ASCM Agreement?
• According to Art 20 of the Regulation the investigation authorities can use questionnaires,
sampling etc. and carry out investigations in the territory of other countries unless that countryobjects to the investigation.  How much time do exporters, producers or interested Members have
to complete questionnaires or giving replies (cf. Art 12.1 ASCM)? Could the PRC confirm that
MOFTEC shall also obtain the agreement of the firms concerned in accordance with Art 12.6 of
the ASCM?
• Art 25 and 26 foresee a two step process involvin g MOFTEC and SETC in establishing a final
determination of the investigation.  Can the PRC confirm that the preliminary decision mentioned
in Art 26 refers only to the situation where provisional measures according to Art 17 of the
ASCM are applied?
                                                     
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• Art 28 of the Regulation lists in point 1 to 5 the circumstances under which a countervailing
investigation shall be terminated.  Point 5 stipulates „other circumstances considered not
appropriate by MOFTEC and SETC to continue th e countervailing investigation".  However, the
second sentence of this Article states that the investigation on a product involved shall be
terminated if the product from one country  or some countries (regions) falls in the circumstancesset forth in item  2
nd, 3rd, 4th or 5th of the preceeding paragraph.  Could the PRC clarify the relation
between the first and the last sentence of this Article, in particular why the 1st item is not
reproduced?  What are „the other circumstances that both MOFTEC and SETCconsider not
appropriate to continue an investigation“?
• Art 42 of the Regulation describes the determination of  countervailing duties.  For those
exporters of the subsidized products not included in the examination, the countervailing duties
shall be determined in a reasonable way.
• Can the PRC please explain in more detail the notion of „reasonable way“?  How is it ensured that
the conditions set out in Art 19.3 of the ASCM are being complied with?
• Art 45 of the Regulation deals with the retroactive imposition of  countervailing duties in case of
provisional measures.  The list of reasons for the imposition of such duties seems to be less
restrictive than in Art 20.6. of the ASCM.  Can the PRC confirm that the application of suchretroactive countervailing duties will only be done according to Art.20.6 of the ASCM?
• Art 47 of the Regulation allows for an „extension as appropriate“ of measures after a review
determines that the termination of the countervailing duty would be likely to lead continuation orrecurrence of subsidization and injury.  How long is „appropriate“ and how does this provision
relate to Art 21.3 and 4 of the ASCM?
• Art 54 and 57 of the Regulation gives MOFERT and SETC the right to adopt appropriate
measures to prevent the circumvention of countervailing measures and to formulate detailed
implementation rules.  Can the PRC explain which preventive measures and detailed
implementation rules have been established so far and circulate it to Members.
• Art 55 provides that the PRC may, on the basis of actual situations, adopt corresponding measures
against a country whenever this country discriminatorily imposes countervailing measures onexports from the PRC.  Could the PRC explain how this provision relates to the clear WTO rules
on dispute settlement, which provide that in cases of dispute or measures not compatible with the
WTO rules (as discriminative measures would be), WTO members should seek to resolve the
dispute amicably and, if necessary resort to th e WTO Dispute Settlement Body.  Only under strict
conditions, defined in the rules on dispute settlement can „retaliatory“ measures be allowed under
the WTO rules. Have there already been cases of application of Art 55?  If so, could some
information on these cases be provided?  If not, how does the PRC envisage to apply Art 55, in
particular in the light of the WTO rules?
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