RESTRICTEDWORLD TRADE
ORGANIZATIONG/ADP/M/11
24 February 1998
(98-0740)
Committee on Anti-Dumping Practices
MINUTES OF THE REGULAR MEETING
HELD ON 30-31 OCTOBER 1997
Chairman:  Mr. Kajit Sukhum (Thailand)
1. The Committee on Anti-Dumping Practices (the "Committee") held a regular meeting on
30-31 October 1997.
2. The Committee adopted the following agenda:
Page
A. Observers:  International inte rgovernmental or ganizations ............................. 2
B. Review of nationa l legisla tions ........................................................................ 3
- new or amended notifications not previously reviewed by the
Committee: .......................................................................................... 3
(a) Bahrain - G/ADP/N/1/BHR/1
(b) EC - G/ADP/N/1/EEC/2/SUPPL.1
(c) Korea - G/ADP/N/1/KOR/3 & G/SCM/N/1/KOR/2
(d) Namibia - G/ADP/N/1/NAM/1 & G/SCM/N/1/NAM/1
(e) Paraguay - G/ADP/N/1/PRY/2/-G/SCM/N/1/PRY/2
(f) United Arab Emirates - G/ADP/N/1/ARE/1 &
G/SCM/N/1/ARE/1
- notifications that have already been reviewed by the Committee: ..... 5
(a) India
(G/ADP/Q1/IND/6-G/SCM/Q1/IND/6)
(G/ADP/Q1/IND/7-G/SCM/Q1/IND/7)
(b) Indonesia
(G/ADP/Q1/IDN/9-G/SCM/Q1/IDN/9)(G/ADP/Q1/IDN/10-G/SCM/Q1/IDN/10)
(c) Israel
(G/ADP/Q1/ISR/7-G/SCM/Q1/ISR/7)
(G/ADP/Q1/ISR/8-G/SCM/Q1/ISR/8)
(d) Malaysia
(G/ADP/Q1/MYS/1-G/SCM/Q1/MYS/1)
(e) Singapore
(G/ADP/Q1/SGP/9-G/SCM/Q1/SGP/9)
(G/ADP/Q1/SGP/10-G/SCM/Q1/SGP/10)
(G/SCM/Q1/SGP/11- G/SCM/Q1/SGP/11)G/ADP/M/11
Page 2
Page
(f) United States
(G/ADP/Q1/USA/3-G/SCM/Q1/USA/3)
(G/ADP/Q1/USA/4-G/SCM/Q1/USA/4)
C. Semi-annual reports of Anti-dumping actions (Article 16.4)
(G/ADP/N/29 and Addenda) ................................................................................. 7
D. Notifications of Preliminary and Final Anti-Dumping Actions
(G/ADP/N/26, 27, 28, 30, 31, 32 and 33) ............................................................. 8
E. Chairman's Report on the meeting of the Ad Hoc Group on Implementation ...... 8
F. Chairman's Report on the meeting of the Informal Group on
Anti-Circumvention .............................................................................................. 9
G. Other Business ...................................................................................................... 9
(i) India - EC anti-dumping investigations on certain textiles
(ii) Japan - United States measures on supercomputers
(iii) Venezuela - Argentina investigation on aluminium cables
(iv) Brazil - US procedures in constructed value calculations
H. Annual Report to the Council for Tr ade in Goods (Article 18.6) ......................... 13
I. Date of Next Regular Meeting .............................................................................. 14
A. Observers:  International Intergovernmental Organizations
3. The Chairman recalled that, at its last regular meeting the Committee had granted regular
observer status to a number of international intergovernmental organizations.  However, the
Committee had not yet granted regular observer status to two organizations, the ACP Group and theOECD, for which requests had also been made. Tu rning first to the request of the ACP Group, the
Chairman informed the Committee that since the last meeting, the ACP Group had been granted
regular observer status in a number of WTO bodies, including the Committees on Balance of
Payments, Customs Valuation, Market Access, Rule s of Origin, Trade and Development, and Trade
and Environment.  In addition, there was a horizontal process under way at the Council level withrespect to requests by the ACP Group and by other international intergovernmental organizations that
had not requested observership in this Committee.  The Chairman noted that it appeared the
Committee was not in a position to grant the ACP Group regular observership at this time.  He also
noted that the Committees on Subsidies and Counte rvailing Measures and on Safeguards had agreed
to invite the ACP Group to participate as an observer in the meetings of those Committees on an adhoc basis.  The Chairman proposed that the Committee also invite the ACP Group to attend its
meetings on an ad hoc basis pending the outcome of the horizontal process.
4. The Committee so decided.
5. With respect to the request by the OECD, the Chairman recalled that at its last meeting, the
Committee had deferred action on the OECD's request, and requested the Chairman to consult on this
issue, given Members' concerns over reciprocity.  The Committees on Subsidies and CountervailingG/ADP/M/11
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Measures and on Safeguards had taken the same decision.  The Chairman noted that since concerns
over reciprocity were of particular relevance in the Subsidies Committee, the other Chairs and he had
asked Mr. Gauthier, Chairman of the Subsidies Committee, to take the lead in the consultations with
the OECD.  At the meeting of the Subsidies Committee on 23-24 October 1997, Mr. Gauthier had
informed Members that he had undertaken informal consultations on this subject, and while he was
not prepared to make precise suggestions regarding the resolution of this question, he considered thathis contacts had been useful, and intended to continue his efforts on this score.  In light of this, the
Subsidies Committee had again deferred action on the OECD's request for observer status, and
decided to continue to invite the OECD to attend meetings of the Committee on an ad hoc basis.  The
Safeguards Committee had taken the same action.  The Chairman therefore proposed that, pending the
final outcome of those consultations, the Committee also defer action on the OECD's request for
observer status, and continue to invite the OECD to participate as an observer in its meetings on an ad
hoc basis.
6. The Committee so decided .
B. Review of National Legislations
- New or Amended Notifications not previously reviewed by the Committee
7. The Chairman drew the Committee's attention to the fact that only six notifications regarding
legislation not previously reviewed by the Committee were on the agenda for this meeting.  These
were not the only notifications received since the last meeting.  Unfortunately, however, othernotifications that had been received that might ha ve been included in the agenda for this meeting
could not be translated and circulated at least six weeks before the meeting, the minimum amount of
time the Committee had agreed was necessary for Members to review notifications and formulate
questions for the review process.  Thus, some notifications would not be reviewed by this Committee
until its next meeting, meaning a delay of up to, and in one case more than, a full year after thenotifications had been submitted to the Committee before they were reviewed.
8. The deadline for circulation of notifications of legislation in all three languages for inclusion
on the agenda of this meeting had been 15 September 1997.  Notifications received but not translatedin time to be included on the agenda of this meeting were:
BULGARIA - The notification was circulated in original language on 27 March 1997.
SINGAPORE - The notification was circulated in original language on 13 May 1997.
SLOVAK REPUBLIC - The notification was circulated in original language on 31 July 1997.UNITED STATES - The notification was circulated in original language on 25 August 1997.
PERU - The notification was circulated in original language on 28 August 1997.
These notifications were expected to be on the ag enda for the April meeting of the Committee.  The
Chairman therefore suggested that Members might wish to begin preparing for the review of these
notifications at that meeting.
9. The Chairman stressed that he raised this matter not to suggest changing the requirement for
translation into all three languages, or reducing the number of weeks for advance circulation of
legislations before their review by the Committee.  To the contrary, both of these requirements
seemed to be essential for the proper functioning of the Committee's legislative review function.
Legislative texts tend to be relatively long and complex.  Clearly, to have a meaningful discussion,
they should be available for review by Members in whichever WTO working language Memberschoose to use.  Having such notifications available only in one language, for example, would entirely
prevent many Members from considering them substantively.  Nor would reducing the minimum
advance period for circulation be advisable or feasible.  Because of the length and complexity of
legislative texts, a period of at least several weeks for review in capitals and formulation of questionsG/ADP/M/11
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was necessary, as was a period of several weeks for formulation of answers to questions to be
discussed at Committee meetings.
10. The purpose in raising this issue was to draw the attention of Members to the fact that there
was a serious problem of delays in the processing (and especially the translation) of documentation inthe Secretariat.  The reason for this was clear:  although the volume of documentation being processed
by the Secretariat was vastly greater than that during the pre-WTO period, the level of resources
allocated to the translation activities of the Secretariat had not changed.  This increased volume of
documentation was not the result of cyclical phenomena, but rather of a structural change, with three
major causes:  first, the increased number of notification requirements in the WTO Agreements;second, the increased number of Members in the organization; and third, the increased volume of
dispute settlement documentation.  None of these elements was likely to change in a way that would
reduce the volume of documentation being handled by the Secretariat.  To the contrary, the volume of
notifications would remain at least at its curr ent level for the foreseeable future, unless the
Agreements were substantially amended, the number of Members would continue to increase, and thevolume of dispute settlement could be expected if anything to increase, rather than to decline.
11. The Chairman urged all Members to give this issue their priority attention, as under the
existing conditions, the regular work of the WTO, including of this Committee, was being
significantly impaired.  If delays such as the one currently experienced were accepted, the Committee
would not be in a position to effectively carry out its task of monitoring and reporting on the
implementation of the Agreement.  Such an outcome could only damage the credibility and usefulness
of this task, and should not be accepted.
12. The Committee took note of the Chairman's remarks.
13. Turning to the substantive discussion of notifications of legislation, the Chairman observed
that questions concerning newly notified legislations were to have been submitted to the Member
concerned and to the Secretariat no later than three weeks before the meeting, that is, no later than
6 October 1997.  He was happy to report that, for the first time, all questions were submitted to the
Secretariat by that deadline, and expressed the h ope that Members would continue in this fashion.
Review of legislation remains an important aspect of the Committee's work, and would remain a
regular item on the Committee's agenda.  Timely submission of questions greatly facilitated the task
of  the Secretariat, of course, but more importantly that of the Members participating in the review,
and those whose notifications were the subject of review.
14. The Chairman reminded Members that, if written answers to questions asked orally at the
meeting were desired, those questions were to be submitted in writing to the Member whose
legislation was concerned, and to the Secretariat, no later than 24 November 1997.  Written answers
to all questions were to have been submitted to the Secretariat no later than 10 January 1998.
15. The questions regarding the notification of Bahrain can be found in the following documents:
G/ADP/Q1/BHR/1 + Corr.1 submitted by Hong Kong, China.The answers provided by Bahrain to these questions can be found in the following document:
G/ADP/Q1/BHR/2 to Hong Kong, China.
16. The questions regarding the notification of the European Communities can be found in the
following documents:
G/ADP/Q1/EEC/2 submitted by JapanG/ADP/Q1/EEC/5 + Corr.1 submitted by MexicoG/ADP/M/11
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G/ADP/Q1/EEC/6 + Corr.1 submitted by the United States
G/ADP/Q1/EEC/8 submitted by JapanG/ADP/Q1/EEC/9 submitted by CanadaThe answers provided by the European Community to these questions can be found in the
following document:
G/ADP/Q1/EEC/10 to Japan, Mexico, the United States, and Canada
17. The questions regarding the notification of Korea can be found in the following documents:
G/ADP/Q1/KOR/10 submitted by Canada
NO WRITTEN ANSWERS HAVE YET BEEN PROVIDED BY KOREA.
18. The questions regarding the notification of Namibia can be found in the following documents:
G/ADP/Q1/NAM/1 submitted by Hong Kong, China
The Committee took note of the fact that Namibia was not represented at the meeting.
NO WRITTEN ANSWERS HAVE YET BEEN PROVIDED BY NAMIBIA.
19. The questions regarding the notification of Paraguay can be found in the following
documents:
G/ADP/Q1/PRY/1 submitted by MexicoG/ADP/Q1/PRY/2 submitted by Hong Kong, ChinaG/ADP/Q1/PRY/3 submitted by the United StatesG/ADP/Q1/PRY/5 submitted by CanadaThe answers provided by Paraguay to thes e questions can be found in the following
document:
G/ADP/Q1/PRY/4 to Mexico;  Hong Kong, China; and the
United States
NO WRITTEN ANSWERS HAVE YET BEEN PROVIDED TO THE QUESTIONS
SUBMITTED BY CANADA.
20. The questions regarding the notification of the United Arab Emirates can be found in the
following document:
G/ADP/Q1/ARE/1 + Corr.1 submitted by Hong Kong, ChinaThe Committee took note of the fact that the United Arab Emirates were not represented at
the meeting.
The answers provided by the United Arab Emir ates can be found in the following document:
G/ADP/Q1/ARE/9 to Hong Kong, China- Notifications that have already been reviewed by the Committee
21. The Chairman congratulated Members on their substantial compliance with the deadlines for
submission of answers to questions concerning not ifications previously reviewed by the Committee.
With limited exceptions, the questions and answers were submitted in a timely fashion thus greatlyG/ADP/M/11
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facilitating the discussion by allowing the Committee, in accordance with its procedures, to turn to
any follow up to the written questions and answers during the meeting.
22. The follow up questions regarding the notification of India can be found in the following
document:
G/ADP/Q1/IND/6-G/SCM/Q1/IND/6 submitted by Canada
The answers provided by India can be found in the following document:G/ADP/Q1/IND/7-G/SCM/Q1/IND/7 to Canada
23. The follow up questions to Indonesia can be found in the following document:
G/ADP/Q1/IDN/9-G/SCM/Q1/IDN/9 submitted by TurkeyThe answers provided by Indonesia can be found in the following document:
G/ADP/Q1/IDN/10-G/SCM/Q1/IDN/10 to Turkey
24. The follow up questions to Israel can be found in the following document:
G/ADP/Q1/ISR/7-G/SCM/Q1/ISR/7 submitted by Turkey
The answers provided by Israel can be found in the following document:
G/ADP/Q1/ISR/8-G/SCM/Q1/ISR/8 to Turkey
25. The follow up questions to Malaysia can be found in the following document:
G/ADP/Q1/MYS/1-G/SCM/Q1/MYS/1 submitted by TurkeyThe answers provided by Malaysia can be found in the following document:G/ADP/Q1/MYS/2-G/SCM/Q1/MYS/2 to Turkey
26. The follow up questions to Singapore can be found in the following documents:
G/ADP/Q1/SGP/9-G/SCM/Q1/SGP/9 submitted by CanadaG/ADP/Q1/SGP/10-G/SCM/Q1/SGP/10 submitted by Turkey
The answers provided by Singapore can be found in the following document:G/ADP/Q1/SGP/11-G/SCM/Q1/SGP/ 11 to Canada and Turkey
27. The follow up questions to the United States can be found in the following document:
G/ADP/Q1/USA/3-G/SCM/Q1/USA/3 submitted by KoreaThe answers provided by the United States can be found in the following document:
G/ADP/Q1/USA/4-G/SCM/Q1/USA/4 to KoreaG/ADP/M/11
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28. The Chairman noted that, in order for a previously reviewed notification of legislation to
appear on the agenda of the Committee's next regular meeting in April 1998, questions were to be
submitted to the Member whose notification is in question, and to the Secretariat, no later than
16 March 1998.
C. Semi-annual reports of anti-dumping actions
29. The Chairman reminded Members that semi-annual reports for the first half of 1997 were to
have been submitted by 29 August 1997.  Unfortunately, as seemed to be habitual for many Members,
almost all semi-annual reports were received late.  He noted that the Secretariat issues a notice
inviting the submission of semi-annual reports for each six-month period.  He also pointed out that
semi-annual reports are always due at the end of February for the period July through December of
the previous year, and at the end of August for the period January through June of the current year.
Members who had submitted semi-annual reports were identified in document G/ADP/N/29/Add.1.
Australia, the European Community, Malaysia, South Africa, the United States, and Venezuelasubmitted their semi-annual reports too late to be included in that list.  In addition to the 23 Members
who submitted semi-annual reports, 18 Members, listed in document G/ADP/N/29/Add.1, had
notified the Committee that they did not take any anti-dumping actions during the period in question.
Cyprus, Morocco, Norway, and Tunisia submitted notifications that they took no actions during the
period that were received too late to be included in the list.
30. While there had been some improvement in compliance, particularly in the use of the agreed
format, as in the past, most notifications were submitted well after the applicable deadlines, and
seventy-two Members had not filed semi-annual reports.  Those Members would be identified in the
Committee's Annual Report to the Council for Trade in Goods, which the Committee would adopt at
the conclusion of this meeting.
31. The delegate of the United States noted that the semi-annual report of Brazil omitted an
investigation involving soda ash from the United States.  She also believed that a negative preliminary
determination had been issued within the reporting period which should be reported.
32. The representative of the Brazil confirmed that there was an investigation opened against soda
ash on 23 September 1996.  No provisional measures were implemented and according to Article 5.10
of the Anti-Dumping Agreement the investigation was extended for another six months after
23 September 1997.  This extension was the object of a public notice published in the Official Journal
of Brazil.
33. The representative of the EC informed delega tions of changes to the Annexes to their semi-
annual report, which would be continued in the future.  Annex I would include notices of the expiry of
measures, in the form of footnotes to column 10.  Annex II would include a new category, listing
those cases which had expired.  In Annex III, amendments of defin itive duties which did not change
the duration and validity of the measures would not be mentioned, although they would still be
mentioned in Annex I.  There were no changes to A nnexes IV and V.  In Annex VI new investigations
and reviews would be mentioned separately, in two new categories, the first being new investigations,
and the second being reviews.  Annex VI would also include all ongoing investigations even if there
have been provisional measures adopted.  These changes had been made to improve transparency ofthe report, which was in the EC's view the overall objective of this exercise.
34. The representative of Japan noted that according to the semi-annual report of India, an
investigation against vitamin C from Japan had been initiated.  Japan believed that to date there had
been no notification of this case under Article 5.5 of the Anti-Dumping Agreement.
35. The delegate of India replied that he would have to check with his capital on this issue.G/ADP/M/11
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36. The delegate of EC sought clarification concerning the US report of an anti-dumping duty
order on seamless stainless steel hollow products, which according to certain information they had
received seemed to indicate that this case was terminated and no order was in effect.
37. The representative of the United States replied that she would have to check with her capital
on this issue.38. The delegate of New Zealand asked the Chairman whether the format for the semi-annual
report was to be reviewed in the future.  He suggest ed that if this review were carried out there could
be some improvements on the transparency and clarity of the reports. For example it would be useful
to separate original investigations from review investigations.
39. The Chairman stated there was always room to improve the performance of the Committee,
therefore a review of the semi-annual report format could be part of the agenda for the next meeting ifMembers so wished.  He also suggested that any specific recommendations to improve on the semi-
annual report, should be sent to the Secretariat, which was willing to coordinate this process.
40. The Committee took note of the comments and statements made.
D. Notifications of preliminary and final anti-dumping actions
41. The Chairman noted that, since the last regular meeting of the Committee, Argentina,
Australia, Canada, the European Community, India,  Indonesia Israel, Korea, Malaysia, Mexico, New
Zealand, Peru, South Africa, and the United States had notified preliminary and final actions taken, asidentified in documents G/ADP/N/26, G/ADP /N/27, G/ADP/N/28, G/ADP /N/30, G/ADP/N/31,
G/ADP/N/32, a nd G/ADP/N/33.
42. As with other notification requirements, there ap peared to be a lack of full compliance in this
area, as some Members who had submitted semi-annual reports indicating actions in progress had not
submitted any reports of preliminary or final actions taken.  He reminded Members that an important
aspect of the Committee's task was its role in monitoring and discussing actions taken by Members.  If
Members did not take their obligations to notify seriously and comply, the Committee would be
prevented from accomplishing its goal of considering Members' compliance with the requirements of
the Agreement.
43. The Committee took note of the statements made.
E. Chairman's Report on the meeting of the Ad Hoc Group on Implementation
44. The Chairman reported that the Ad Hoc Group met on 27-28 October 1997.  The participation
of Members, both in terms of the number of papers and proposals, and the discussions themselves,
had been excellent.  The Group discussed all ten topics that had been forwarded to it by theCommittee for consideration, based on papers, proposals, and information submitted by Members
prior to the meeting.  The discussions were at times lively, and a great deal of information was
exchanged among Members regarding their practi ces in implementing the requirements of the
Anti-Dumping Agreement.  Members agreed to submit further and follow up papers and proposals on
several of the topics under consideration, as well as information on their individual practices in theareas addressed.  The Secretariat would compile information submitted by Members with respect to
the some of the issues raised.  The Group scheduled its next meeting for Monday and Tuesday, the
27-28 April 1998.  The Chairman stated his view that the last meeting of the Ad-hoc Group was very
fruitful and hoped that Members would continue to participate actively in the work of the Ad Hoc
Group, so that this momentum could continue, and th e Group's future meetings would be as useful,
and would lead to positive results.
45. The Committee took note of the Chairman's statement.G/ADP/M/11
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F. Chairman's Report on the meeting of the Informal Group on Anti-Circumvention
46. The Chairman reported that the Informal Group on Anti-Circumvention met on
29 October 1997.  Members discussed the four papers submitted, and numerous additional statements
were made.  The Informal Group agreed to meet  again on Wednesday, 29 April 1997, to continue its
discussions on the first topic for discussion under the agreed framework.  The Chairman hoped that as
the work of the Informal Group continued, more Members would participate by submitting papers on
the items for discussion, and in the discussions themselves, and that the Group's future meetings
would be useful in helping the Committee accomplish the task set by the Ministerial Decision on
Anti-Circumvention.
47. The Committee took note of the Chairman's statement.
G. Other business
(i) India - EC anti-dumping investigations on certain textiles
48. The delegate of India expressed concern over repeated anti-dumping investigations against
exports of textiles from India that were already subject to restraint.  The first proceeding on cotton
fabrics had been initiated by the European Community on 20 January 1994.  These proceedingsremained pending for nearly two years, and only after the EC's Anti-dumping Advisory Committee
accorded its approval did the Commission terminate this investigation on 20 February 1996. Within a
day of this termination, on 21 February 1996, the Commission accepted a new complaint with a
narrower range of products, that is, unbleached cotton fabrics, and initiated the second anti-dumping
investigation.  For this case also the investigation remained pending for nearly a year and a half until
the EC Council of Ministers rejected the proposal for definitive levies on 21 May 1997.  For the third
and presently ongoing case, a new complaint was filed and accepted within five days of the Council'stermination of the second investigation.  The dele gate of India brought to the attention of the
Committee that these three back to back  investigations had caused a substantial decline in India's
exports of grey fabrics to the European Union.  As the chronology of events showed, India's exports
of cotton fabrics had been under close scrutiny and investigation for nearly 5 years, leading to losses
and diversion of trade. This in India's view had resulted in an impairment of benefits accruing to Indiaunder the EC's tariff concession on unbleached cotton fabrics.  The delegate of India asked the
European Community to  give consideration to their concerns and take appropriate remedial action.
49. The delegate of the EC pointed out that one of these cases had been discussed at the
October 1996 meeting of the Committee, when the issue was raised by Indonesia.  He also stated that
the Commission was under a legal obligation to initiate a case once a properly documented complaint
with sufficient prima facie  evidence on dumping, injury, and causality had been lodged.  Thus, the
Commission has no discretion as to whether or not to  open an investigation.  Additionally, he pointed
out that the fact that the Council did not decide to impose a duty in the second investigation did not
necessarily mean that the investigation did not find dumping and injury.  So there was no
contradiction between the fact that the Council decided not to impose measures and the fact that a
properly justified complaint was filed a few days later.  Having said this, he pointed out that it was
difficult to have any substantial discussion under a point raised as Other Business and not under a
specific agenda item.
50. The Committee took note  of the statements made.
(ii) Japan - United States measures on supercomputers
51. The delegate of Japan expressed serious concerns regarding the actions of the United States
with respect to the sale of Japanese supercomputers in the United States market.  Last May a Japanese
manufacture was the winning bidder in a supercomput er procurement carried out by the US National
Centre for Atmospheric Research.  Among the reason s why the domestic bidder was not selected was
the fact that only the supercomputer manufactured by the Japanese company met the technicalG/ADP/M/11
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requirements of the user.  This procurement decision was followed by several extraordinary and
disturbing events that Japan wished to bring to the attention of the Committee.  The first was the
highly unusual manner of establishing a so-called dumping margin for Japanese supercomputers by
the Department of Commerce (DOC).  The calculation of this margin on supercomputers was made
without an anti-dumping investigation having been initiated on those products.  This information was
then sent by the DOC to the National Science Foundation (NSF), which was the entity required toapprove the procurement.  The NSF was informed by the DOC that the dumping margin of the
winning Japanese bidder was estimated at 163.8 per cent, and that the DOC had significant concerns
that the importation of a supercomputer system would threaten the US industry with material injury.
The DOC also informed the NSF that an anti-dumping investigation could be initiated either by the
domestic industry or by the DOC itself.  All of this was done behind the scenes, without any
involvement of the investigated company, solely on the basis of information provided by a competitor
of that company.  This had effects equivalent to  the imposition of an anti-dumping duty but none of
the procedural requirements set out in the Anti-Dumping Agreement for anti-dumping measures were
followed.
52. The delegate of Japan considered that the US DOC acted in an extraordinary, unprecedented
and inappropriate manner prior to the initiation of  the investigation.  The DOC intervened in the
procurement decision of the NSF by communicating an anti-dumping margin for the winning bidder
and making a suggestion regarding the initiation of an investigation by itself.  According to the Anti-
Dumping Agreement, the establishment of the facts by  the administering authority must be proper and
their evaluation unbiased and objective.  How could an agency that had already improperly
established the facts before the anti-dumping proceeding be expected to evaluate the facts before it in
an unbiased and objective fashion during the anti-dumping proceeding?  To the delegation of Japan itwas clear that there was no legal basis in the Anti-Dumping Agreement nor in any other WTO
Agreement for interventions of the kind made by the DOC before the initiation of the anti-dumping
proceeding.  It was also clear that these interventions called into question the capacity of the DOC to
conduct an objective and unbiased dumping examination after the proceedings had been initiated.
Given the serious and unprecedented nature of the supercomputer case, Japan reserved all its rights onthese matters.
53. The representative of Japan stated that if this new form of protectionism invented in the
United States were to spread, the objectives of the multilateral trade order would be seriously
undermined.  He therefore invited all Members of the Committee to take this matter seriously and to
join Japan in its efforts to prevent a recurrence of such unfortunate events.
54. The delegate of the United States observed that since this subject was raised under other
business, she did not have prepared remarks, despite the fact that this was an old issue.  She confirmed
the existence of an anti-dumping investigation against supercomputers from Japan which had already
been completed.  The Japanese producers had elected not to cooperate in that investigation at all --
they did not answer the questionnaires and did not participate in the proceedings before the DOC
except at the end to dispute the dumping rate found.  Therefore the investigation was resolved based
on the facts available.  Japan's complaint on bias was based on events which happened before theinvestigation was initiated and did not relate to, at least directly, the investigation itself.  She pointed
out that in this regard every investigative authority ha s the right to self-initiate an investigation.  If one
contemplated the implications of that, it would be seen that it was impossible to self initiate an
anti-dumping investigation without conducting an investigation of whether facts that might support a
finding of dumping existed.  Thus each investigating authority plays a dual role, both an  investigatoryrole and a judicial role, up to the point that an investigation is initiated and even during the course of
an investigation.  During an investigation the role  of the agency switches gradually from investigator
to adjudicator that must decide exactly what the margin is.  Thus in almost every case and certainly in
every case that is self initiated a superficial claim could be made that the investigative authority was
biased.  However, the United States did not believe that the bias claim in this case was at all founded.In fact the letter sent to the National Science Foundation simply stated that on the basis of limited
information available to it at that point the DOC estimated that there could be a dumping margin andG/ADP/M/11
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injury.  Therefore, there would not be any inconsistency for the DOC to conclude, after conducting a
complete investigation with full information, that th e original estimate was incorrect and on the basis
of the facts then before to find that in fact there was no dumping.  Japan's claim of bias was also
extensively litigated in the US court system, in a l itigation that took almost a year.  A claim that an
investigating agency was biased because it investig ated a matter before considering whether to initiate
a proceeding probably could not be brought in many  other countries.  In the United States judicial
system this was possible, and there was a very detailed investigation of this matter by the Court.  It
was very vigorously pursued by council for the Japanese producers, and resulted in their claim being
dismissed.  The US delegate understood that the Japanese producers had appealed and ventured to
predict that the appeal would also be unsuccessful.
55. The delegate of Japan  commented that the Japanese producers had not cooperated because
they felt that the case was biased against them.  Japan did not deny that an investigating authority
could self-initiate an investigation.  But according to their understanding an authority was notauthorized  to  publish or inform of the results of its investigation, especially to the investigated
party's competitors, before formally initiating the case.
56. The delegate of Norway stated that the issue raised by Japan was a very interesting one, and
believed it was of great interest for the Committee and as such it would have been preferable had this
point been included in the agenda as a regular item.  The reason for this was that, as it was raisedunder other business, other Members were prevented from asking questions that would have been of
interest to clarify aspects of this case, and it was unfortunate that they were prevented from doing so
by not having notice that the matter would be discussed.
57. The Committee took note of the statements made.
(iii) Venezuela - Argentina  investigation on aluminium cables
58. The representative of Venezuela sought clarifications concerning Resolution No. 349/97 of
the Ministry of the Economy and Public Works and Services of Argentina, which extended to
aluminium or aluminium alloy cables of other cr oss-sections the original Resolution No. 308/96
imposing anti-dumping duties on such cables of specified cross-sections, dated 21 February 1996.
This Resolution was adopted as a result of an application by the Argentine non-ferrous metalsChamber requesting that the duties imposed should be applied to such cables of any cross-section
whatsoever exported from the countries of origin under investigation (Brazil and Venezuela).  This
application stemmed from the concern of Argentine manufacturers of like goods in connection with
the forthcoming opening and subsequent award of the public call for tenders in Argentina for the
construction of the 500 kV transmission line for the Piedra y el Aguila power station, involving thesupply of 200,000 tonnes of steel-core aluminium cable , and the fact that the cross-sections of the
cable to be used for this work were not explicitly mentioned in the Resolution of February 1996
imposing the final duties.  Resolution No. 349/97 has the effect of extending the final duties to a
number of products that were never investigated in the anti-dumping procedure.  According to the
delegate of Venezuela, the products to which the application of the final duties was extended had
never been and were not being exported by any Venezuelan enterprise to Argentina.  Consequently,
there could not be any determination of the existence of dumping of the new products or ofconsequent injury to the domestic industry.
59. The representative of Venezuela asked the Argentine delegation the following questions:
Have there been any imports into the Argentine ma rket of aluminium or aluminium cables, with or
without a steel core, identified under headings 7614.10.10 and 7614.90.10, originating in Venezuela,
which did not correspond to the description and cross-sections specified in Resolution No. 308/96, of
21 February 1996, of the Ministry of the Economy and Public Works and Services?  Has theArgentine authority initiated an investigation into alleged dumping and injury with respect to imports
of aluminium or aluminium alloy cables originating in Venezuela that do not correspond to the
description and cross-sections specified in Re solution No. 308/96, of 21 February 1996, of the
Ministry of the Economy and Public Works and Services?  Has the Argentine investigating authorityG/ADP/M/11
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reached a determination of the existence of dumping, injury, and a causal relationship between the
two, with respect to imports of aluminium or alum inium alloy cables originating in Venezuela that do
not correspond to the description and cross-sections specified in Resolution No. 308/96, of
21 February 1996, of the Ministry of the Economy and Public Works and Services?  How is
Resolution No. 349/97, of 21 March 1997, of the Ministry of the Economy and Public Works and
Services consistent with Article 1 of the Agreement on Implementation of Article VI of the GeneralAgreement on Tariffs and Trade 1994 (Anti-Dumping Agreement)?
60. The representative of Argentina stated that answers to Venezuela's questions would be
provided on a bilateral basis after consulting with his capital.
61. The representative of Venezuela stated that she would prefer that answers be given to the
questions in the framework of this Committee.
62. The Committee took note of the statements made.
(iv) Brazil - US procedures in constructed value calculations
63. The delegate of Brazil brought to the attention of the Committee an issue that had been the
object of informal consultations between Brazil and the US, at different levels, on several occasions.
It was not Brazil's intention to cover all the relevant aspects of the issues, nor did they expect to
engage in a substantive and detailed discussion.  However, considering the large amount of time and
energy they had devoted to the issue and since they had not been able to satisfactorily address it with
the assistance of the US authorities, they felt it was appropriate to convey their views to the Members
of the Committee.
64. Brazilian exporters of iron and steel had been negatively affected by anti-dumping procedures
that seem to discriminate against their accounting methodology and practices.  To be precise, the
inclusion of indirect taxes (i.e., value-added taxes such as IPI, ICMS and, more recently, social taxessuch as PIS and COFINS) in the calculation of the constructed value of the exported product is clearly
against multilaterally agreed rules and cannot be accepted.  The significance of this is accentuated
when one observes that constructed value is the primary methodology applied to investigations
against the Brazilian iron and steel industry.  The constructed value methodology is based on proxy
determinations that require multiple calculations and discretionary judgements, which may yieldhighly distorted results.  The constructed value should be used only in exceptional circumstances
rather than, as is the case at hand, a primary method of determination.
65. The US Government has been consistently making an adjustment when comparing normal
value based on home market prices with export prices to reflect the credit received upon export for the
indirect taxes paid.  The US Department of Commer ce has, therefore, been recognizing that such an
adjustment is essential to a "fair comparison" between the two prices, as required by Article 2.4 of the
Agreement. However, when constructed value is the basis of normal value, the practice of the US
authority is to include the indirect taxes in the calculation of constructed value.  It then comparesconstructed value including the taxes, with the export price, which does not include such taxes.
Rather, the exporter receives a credit for the indirect taxes on exported products against its liability for
such taxes on domestic sales.  The US Government justifies this practice by invoking a domestic
statutory provision which requires "the taxes paid on inputs to be included in the constructed value
when such taxes are not remitted or refunded upon exportation of the final product".  In their findings,US authorities disregard the fact that the amount of taxes paid on inputs used in producing the
exported product is credited against the liability for taxes collected on home market sales.  The
interpretation given by the US authorities to the statute creates a distinction between taxes which are
"remitted or refunded upon exportation" and those that are credited against domestic tax liabilities
upon exportation.  Although the price effect is identical in both instances, the distinction made by theinvestigating authorities creates a substantial price differential where none exists.  It, therefore, also
creates a dumping margin where none exists.  Brazil has made clear to the US Government its viewG/ADP/M/11
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that the inclusion of indirect taxes in the calculation of constructed value is in violation of Article 2.4
of the Anti-Dumping Agreement.
66. The delegate of Brazil informed the Committee that with a view to clarifying the issue and
seeking a rectification of the procedures, consultations with the US authorities were held last year and
again in July of this year.  Despite the disposition shown by the US authorities to discuss the question
and explain the procedures, no concrete results had so far emerged from the meetings.  In fact, recentdecisions had repeated the past mistakes, leading Brazil to draw the attention of the Committee to the
case and provide the US and other interested parties with an opportunity to express their views.  In
addition, Brazil wished to reserve its rights to further pursue the matter under the relevant provisions
of the GATT and the WTO Agreements.
67. The representative of the United States noted that the discussions with Brazil had, in the US
view, not really concerned the meaning of Article 2.4 of the Anti-Dumping Agreement, but really
whether the export tax credit in question is used, and therefore whether it has any value.  This was adifficult complex issue and the US discussions with Brazil would continue.
68. The Chairman reminded Members that subjects placed on the agenda under other business
should be those that are not substantive.  He also noted that some of the topics discussed during the
meeting under other business might be worthy of a more substantial discussion.
69. The Committee took note of the statements made.
H. Annual report to the Council for Trade in Goods
70. The Committee adopted its annual report to the Council for Trade in Goods.1
I. Date of next regular meeting
71. The Chairman noted that the Committee had agreed at its meeting of 21 February 1995 that
regular meetings normally would be held in the last week of April and the last week of October.
Accordingly, the next regular meeting of the Committee would be held on Thursday, 30 April and
Friday, 1 May 1998.
72. The meeting was adjourned.
__________
                                                     
1Subsequently circulated as document G/L/204, 6 November 1997.