. /.WORLD TRADE
ORGANIZATIONG/ADP/AHG/W/139
23 September 2002
(02-5077)
Committee on Anti-Dumping Practices
Working Group on ImplementationOriginal:  English
IMPLEMENTATION-RELATED ISSUES REFERRED TO THE
COMMITTEE ON ANTI-DUMPING PRACTICES AND ITS
WORKING GROUP ON IMPLEMENTATION
Reply from INDIA to the Question from the UNITED STATES1
The following communication was received on 20 September 2002 from the Permanent
Mission of India.
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Q. In its submission of 18 April 2002 (documen t G/ADP/AHG/W/135), India states that in a
decision of 5 May 1980 the Committee on Anti-D umping Practices “interpreted the obligations
of developed country Members under the first sentence of Article 13 of the 1979 Anti-DumpingCode, the language of which was identical to Article 15 of the Anti-Dumping Agreement. . . as
permitting it to modify  the provisions relating to the determination of the existence of dumping
under the 1979 Code.” [Emphasis added].  Having reviewed the cited decision, this reference by
India is not entirely clear to the United States.  What is the basis for India’s conclusion that the
cited decision constituted a modification of a provision of the Code?  What portion of that
decision represents such a mo dification, in India’s view?
Reply
India would like to emphasize that the issue is not whether a decision of the Committee on
Anti-Dumping Practices (the "Committee") can modify the provisions of the Agreement on
Implementation of Article VI of the General Agreement on Tariffs and Trade, 1979 (the "1979 Code")or whether the Committee's Decision of 1980 (ADP/2 ) (the "1980 Decision") actually modifies, varies
or adds to the obligations of the Contracting Parties under the provisions of the 1979 Code.  The real
issue is whether the Committee, in its 1980 Decision, interpreted the language of the first sentence of
Article 13 of the 1979 Code as covering the pre-initiation and investigation stage of an anti-dumping
proceeding prior to the stage of application of anti-dumping duties.
Paragraph 1 of the 1980 Decision specifically records that the Committee, "cognizant of the
commitment in Article 13 of the Agreement … takes the following decision concerning the
application and interpretation of the Agreement in relation to developing countries … ".  Therefore, in
the Committee's view, the 1980 Decision is referable to the obligations of the Contracting Partiesunder Article 13 of the 1979 Code and clearly represents its "interpretation" of Article 13 in relation
to the other provisions of the 1979 Code.  In this sense, India agrees that the 1980 Decision cannot be
termed as "modifying" the provisions of the 1979 Code relating to the existence of dumping.
                                                     
1 G/ADP/AHG/W/137G/ADP/AHG/W/139
Page 2
Nevertheless, India notes that paragraph (ii) of the 1980 Decision does represent a departure
from the provisions of Article 2 relating to the de termination of the existence of dumping under the
1979 Code.
Under Article 2:1 of the 1979 Code, an investigating authority is required to determine the
normal value of dumped goods on the basis of the price of the dumped goods in the domestic market
of the exporting country.  Article 2:4 of the 1979 Code requires an investigating authority to take into
account the export price to a third country or the cost of production in the exporting country for
purposes of determining normal value only when the sales of the like product in the domestic market
are not in the "ordinary course of trade" or because  the "particular market situation" in the exporting
country does not permit a proper comparison.
However, paragraph (ii) of the 1980 Decision requires an investigating authority to take into
account export prices to third countries or the cost of production in the exporting country in all cases
where "special economic conditions affect prices in the home market" and, therefore, prices in the
home market do not provide "a commercially realistic basis for dumping calculations".  This is much
broader than the language of Article 2:4 which refers to the "ordinary course of trade" or "particularmarket situation in the exporting country".
The term "special economic conditions that affect prices in the home market" is much broader
and must be interpreted by reference to the first sentence of paragraph (i) of the 1980 Decision which
provides that "[i]n developing countries, governme nts play a large role in promoting economic growth
and development in accordance with their national priorities and their economic regimes for the
export sector can be different from those relating to their domestic sectors resulting inter alia  in
different cost structures".  This includes cases where the overall economic situation of the developing
country would render a strict comparison between the domestic price in the exporting country and the
export price inappropriate because the domestic price does not provide "a commercially realistic basisfor dumping calculations".  For example, a developing country may follow economic development
policies that result in high domestic prices to depress consumption across the board and increase
investment but, at the same time, it may encourage exports to earn scarce foreign exchange.  In such
cases, an investigating authority is obligated to de termine the existence of dumping on the basis of the
export price to a third country or the cost of production in the exporting country and cannot resort to
the domestic price in an analogous third country.
In conclusion, India reiterates that the Committee, in its 1980 Decision, interpreted the
language of the first sentence of Article 13 of the 1979 Code as covering the pre-initiation and
investigation stage of an anti-dumping proceeding prior to the stage of application of anti-dumping
duties.  Accordingly, under Article 15 of the Anti-Dumping Agreement, special regard is required to
be given by a developed country Member to developing country Members during the entire anti-dumping investigation.
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