WORLD TRADE
ORGANIZATIONG/SG/Q1/CHN/9
2 October 2003
(03-5173)
Committee on Safeguards Original:  English
NOTIFICATION OF LAWS AND REGULATIONS UNDER
ARTICLE 12.6 OF THE AGREEMENT
Questions Posed by the UNITED STATES Regarding the Notification of
the PEOPLE'S REPUBLIC OF CHINA1
The following communication, dated 13 September 2003, has been received from the
Permanent Mission of the United States.
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The United States thanks China for its noti fication of its Rules on Investigations and
Determinations of Industry Injury for Safeguards.
1. Article 5 of the notified rules defines “threat of serious injury” to mean “serious injury that is
clearly imminent and will occur if no measures are taken.”  Please explain how this definition is
consistent with the definition in Article 4.1(b) of the WTO Safeguards Agreement, which does not
refer to the taking of measures.
2. Article 6 states that the “determination of threat of serious injury shall be based on facts” and
then lists factors relating to production capacity, inventories, exporting capacity, and the “possibility”
of continuation of export increases to China.  How is this consistent with the requirement in
Article 2.1 of the WTO Safeguards Agreement that the serious injury or threat of serious injury be to
the domestic industry?  For example, would an increase in foreign capacity alone provide a basis for
determining that the domestic industry is threatened  with serious injury, or would the investigating
authority (the State Economic and Trade Commission (“SETC”) be required to find that factors
relating to the condition of the domestic industry showed the industry to be threatened with seriousinjury?  What is meant by “ possibility” of continuation of export increases, and how is this term
distinguished from “allegation, conjecture or remote possibility” in Article 4.1(b) of the WTO
Safeguards Agreement?
3. Article 8 lists certain factors relating to causation that the SETC must consider.  Would all of
these factors be “factors other than increased imports” within the meaning of Article 4.2(b) of theWTO Safeguards Agreement?  How would the SETC address the requirement in Article 4.2(b) that
injury from factors other than increased imports “not be attributed to increased imports”?
4. Article 9 defines the terms “like product” and “directly competitive product.”  China appears
to use the same definition for  “like product” as in, for example, footnote 46 of the WTO Agreement
on Subsidies and Countervailing Measures, which has no “directly competitive product” counterpart.What is the basis for China’s use of this definition in its safeguards investigations rules?  How would
China differentiate between domestic products “closely resembling” the imported product (but which
                                                     
1  G/SG/N/1/CHN/2/Suppl.2 (15 April 2003).G/SG/Q1/CHN/9
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are not identical), and domestic products that are “directly competitive” with the imported product?
Would China interpret Article 9 such that domestic and imported products that are found to be “like”
could not also be considered “directly competitive” with each other in similarity of use and
substitutability?
5. The first sentence of Article 11 states that “[i]n the determination of injury to industry, SETC
may exclude the products under investigation or part thereof that did not cause injury to domestic
industry.”  The meaning of this provision, which does not appear to implement any portion of the
Safeguard Agreement, is unclear.  Could China provide an example of a factual situation in which
SETC would apply this provision?  How can SETC determine that a portion of the product under
investigation did not cause injury before it has concluded its investigation of injury?
6. Article 12 states that the SETC in conducting investigations and making determinations
“shall” take into account the “public interest” and may examine the potential impact of safeguardmeasures thereon.  How would the SETC do this, and at what point in the process?  Will interested
parties be allowed an opportunity to present evidence in this respect?
7. Article 13 states that the period of investigation is “normally the 3 years immediately prior to
the initiation of an investigation.”  Does this mean 3 calendar years?  Why 3 years and not 5 years?
Does “normally” mean that China would sometimes envision examining longer periods or shorterperiods?  Under what circumstances?  Would China also collect interim year data for the most recent
period?  What would China do if the availability of data for the period “immediately prior” to the
initiation of the investigation were delayed?
8. Article 14, which relates to the contents of petitions, gives petitioners the choice of supplying
3 to 5 years of data in support of their petition.  Why does China give petitioners a choice?  Wouldn’tthis encourage petitioners to choose periods most favourable to an affirmative determination?  In light
of Article 13, would the SETC be bound to base its period of investigation on the years of data
provided by the petitioner?  Please explain how a determination based on a period of investigation of
the petitioner’s choosing would constitute a determination on the basis of “objective” evidence within
the meaning of Article 4.2(a) and (b) of the WTO Safeguards Agreement.
9. Please specify the entities that may be treated as interested parties pursuant to Article 17(4) of
the Rules, which states that “others” may be granted interested party status.
10. Article 18 explains how an interested party may participate, and appears to limit participation
by lawyers to Chinese law firms and lawyers.  Please explain exactly who may participate, for
example on behalf of a foreign producer or exporter.  Does the term “legal representatives” mean
lawyers, or does it refer to any person authorized to act on behalf of the interested party?  Why are
foreign lawyers excluded?
11. In circumstances where SETC engages experts in a safeguard investigation pursuant to
Article 20, how will China ensure that these experts maintain the confidentiality of the data
examined?
12. Articles 32-34 appear to limit access to, and copying of, non-confidential information to
interested parties, including apparently the final determination.  Please explain how these proceduresare consistent with the requirements of Articles  3.1 and 4.2(c) of the WTO Safeguards Agreement,
which refer to public notice, public hearings, and publication of reports (except in the case of
confidential information).
13. What is the “relevant certificate” required by Article 33?  How do interested parties obtain
this certificate?G/SG/Q1/CHN/9
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14. What are the procedural formalities referred to in Article 33?  Where can interested parties
obtain information on these procedural formalities?
15. Articles 36 and 37 provide for “preliminary findings” and a “preliminary determination.”
What is the purpose of a preliminary decision, and must the SETC make such a determination in all
instances?  In the absence of a full investigation, what evidence will be considered in making apreliminary determination?  At what point in time  will the determination be made?  Are the standards
for “preliminary” and “final” determinations the same?  What is the effect of an affirmative or
negative preliminary determination?  Can a provisional remedy be imposed following an affirmative
preliminary determination?  Would a negative prelim inary determination result in termination of the
investigation?
16. Article 39 provides for the SETC to make a “determination” at the time of a mid-term review
(which would be conducted if the safeguard measure exceeds 3 years).  Please describe the nature ofthe determination that would be made and the procedures relating to such reviews.
17. When parties provide requested information in Chinese, as required by Article 43, must the
entire document be translated under all circumstances, or where documents are lengthy, may the
parties submit translations of only the pertinent parts of those lengthy documents?
18. Does China’s safeguard law provide for safeguard measures on a provisional basis when
critical circumstances are found to exist?  If so, has China drafted rules that provide for the
application of such measures, and what are those rules?
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