RESTRICTED
WORLD TRADE G/ADP/Q1/CAN/3
G/SCM/Q1/CAN/3
ORGANIZATION 15April 1997
(97-1606)
Original: English Committee onAnti-Dumping Practices
Committee onSubsidies andCountervailing Measures
NOTIFICATION OFLAWS AND REGULATIONS UNDER
ARTICLES 18.5AND 32.6OFTHE AGREEMENTS
Replies ofCANADA1toFollow-up Questions
from HONG KONG2
Thefollowing communication, dated 11April 1997, hasbeenreceived from thePermanent
Mission ofCanada.
_______________
Follow-up toHong Kong Question 13(b)
Question
According toCanada, whentheoverall margin ofdumping isbeing established fortheexporter,
product groupings thathavenegative margins willbesetequal tozerotoensure thatnegative margins
onspecific product categories arenotusedtooffset positive margins on"non-like" goods.
Would Canada explain whether inanADinvestigation goods under consideration arealllike
products andwhether itwould categorise suchgoods under consideration intoproduct groupings for
determination ofindividual dumping margins? Ifso,whatarethecriteria forcategorizing likegoods
into'specific 'product groupings? Would Canada explain therationale behind andthemultilateral
basis?
Would Canada explain whether section 30.2(1) ismeant toestablish theoverall dumping margin
ofalllikegoods under consideration foranexporter ortoestablish theindividual dumping margin
ofeachspecific category ofgoods under consideration foranexporter?
Intheformer case,whatisthejustification forthezeroing down ofthenegative overall dumping
margin foranexporter andwhatisthemultilateral basis? Would thisnotinflate theoverall dumping
margin inrelation togoods fromaparticular country asdetermined bysection 30.1?
Inthelatter case, ifapositive overall dumping margin isestablished foranexporter (which
isprimarily duetopositive dumping margins established forcertain product categories), would specific
product categories of"non-like" goods withnegative margins bealsosubject toADduties? Ifyes,
1G/ADP/N/1/CAN/2-G/SCM/N/1/CAN/2.
2G/ADP/Q1/CAN/1-G/SCM/Q1/CAN/1.G/ADP/Q1/CAN/3
G/SCM/Q1/CAN/3
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doesCanada findthisafairmethod? Would Canada explain further howArticle 2.4.2 oftheAD
Agreement provides forcalculation ofthedumping margin ata"product category level"?
Answer
1. Thedefinition of"likegoods" insubsection 2(1)oftheSpecial Import Measures Act(SIMA)
isCanada’slegislativeexpressionof,andisconsistentwith,thedefinitionof"likeproduct"inArticle2.6
oftheAnti-Dumping Agreement (ADA).
Thegoods under consideration inadumping investigation areconsidered tobe"likegoods"
inrelation togoods produced inCanada. However, thegoods under investigation mayormaynot
be"likegoods" toeachother insofarasthedefinition oflikegoods means goods which areidentical
toeachother.Thissecond point maybeillustrated through twoscenarios:
(i) Where allofthegoods subject toadumping investigation arethesame (i.e., havethe
same dimensions/grade/style/etc.), eachgoodsubject totheinvestigation isanidentical
"like good" inrespect ofeachother good subject totheinvestigation.
(ii) Adumping investigation normally involves arange ofproducts which arenotidentical
"like goods" inrelation toeachother (e.g., steelplate ofdifferent grades, electric
motors ofdifferent types/horsepower, carpets ofdifferent styles, etc.). Insuchcases,
"product groupings" or"categories oflikegoods" areestablished; eachcontaining
domestic salesintheexporter ’shome market andexport sales toCanada. Sales in
theexporter ’sdomestic market arethencompared tocomparable export salestoCanada
inorder todetermine amargin ofdumping foreachproduct grouping orcategory of
likegoods.
Thisuseofproduct groupings orcategories oflikegoods ensures the"apples-to-apples"
comparison contemplated bythefaircomparison requirements inArticle 2oftheADA.
Article2.4.2oftheADAdoesnotdefinetheword"comparable".Accordingly,theinvestigating
authorities mayuseanyreasonable basis forestablishing "comparable" transactions forpurposes of
comparing normal values toexport prices. Thedetermination whether goods subject toadumping
investigation make-up onehomogeneous group oflikegoods orvarious categories oflikegoods and,
asrequired, thecriteria forestablishing thecategory groupings themselves, isaquestion offactin
eachindividual investigation.
2. Subsection 30.2(1) ofSIMA provides thestatutory basisforestablishing themargin ofdumping
ofanygoods attheexporter level. Where thegoods subject toaninvestigation constitute one
homogeneous grouping ofgoods (i.e., where allsubject goods are"like goods" toeachother), the
margin ofdumping established under SIMA subsection 30.2(1) would bethesame asamargin of
dumping established fortheexporter. However, where thesubject goods fromanexporter aredivided
intotwoormore "categories oflikegoods" forpurposes ofdetermining aproper comparison (i.e.,
toensure comparable export transactions when comparing normal values andexport prices consistent
withArticle 2.4.2 oftheADA), themargins ofdumping generated under subsection 30.2(1) would
havetobecombined toestablish aweighted average margin ofdumping fortheexporter inquestion.
3. Anti-dumping duties apply tosubject goods following thefinaldeterminations ofdumping and
injury. Under theCanadian prospective system ofanti-dumping dutyassessment, goods forwhich
specific normal values havebeencalculated arenotassessed anti-dumping duties when theexport prices
areequal toorabove those normal values.G/ADP/Q1/CAN/3
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4. Asexplained inourprevious response toHong Kong’squestion 13(b) andthepoints noted
above, thezeroing ofnegative dumping margins forspecific categories oflikegoods isintended to
ensure thatnegative margins inrespect ofaparticular category oflikegoods arenotusedtooffset
positive margins inrespect ofanother category oflikegoods. Thismethodology isconsistent with
Article 2.4.2 oftheADA since themargins ofdumping arecalculated foreachcategory oflikegoods
byadirect comparison between normal value andtheexport price.
Follow-up toQuestion 19(c)
Question
Would Canada explain whyitprefers themethodologies stipulated inparagraph 11(c) tothose
setoutinArticle 2.2.2(i) and(ii)oftheAgreement?
Answer
5. Paragraph 11(c) oftheSpecial Import Measures Regulations respecting thecalculation ofan
amount foradministrative ,selling andallothercosts, reflects apreference fortheuse,asfaraspossible,
ofactual datafortheexporter inquestion. Thisisconsistent withthereference toanyother reasonable
method inArticle 2.2.2(iii) oftheADA.