RESTRICTED
WORLD TRADE G/ADP/Q1/USA/4
G/SCM/Q1/USA/4
ORGANIZATION 17October 1997
(97-4553)
Original: English Committee onAnti-Dumping Practices
Committee onSubsidies andCountervailing Measures
NOTIFICATION OFLAWS AND REGULATIONS UNDER
ARTICLES 18.5AND 32.6OFTHE AGREEMENTS
Replies from theUNITED STATES
toquestions from KOREA1
Thefollowing communication, dated 14October 1997, hasbeenreceived fromthePermanent
Mission oftheUnited States.
_______________
Question 1: [19]CFR 353.2(j) stipulates thedefinition ofdomestic industry as"theproducers
intheUnited States collectively ofthelikeproduct."
Areproducers ofintermediate goods orcomponent parts ofthelikeproducts included
indomestic industry forthepurpose ofdetermining injury?
Reply
Asthequestion indicates, thedomestic industry generally consists oftheUSproducers ofthe
"domestic likeproduct". Aspecific producer willbeincluded inthedomestic industry onlyifitproduces
thatdomestic likeproduct. Thedomestic likeproduct isaproduct which islike,orintheabsence
oflike,mostsimilar incharacteristics anduseswith, thearticle subject toaninvestigation. Itisthe
United States International Trade Commission ("theCommission") which determines theappropriate
domestic likeproduct, andthatdetermination isafactual onethatismade onacase-by-case basis.
TheCommission looks forcleardividing linesamong possible domestic likeproducts, anddisregards
minor variations.
Insome circumstances, depending onthescope oftheinvestigation asdefined bythepetition
thatissubmitted toboththeCommission andtheUSDepartment ofCommerce ("the Department"),
articles subject toinvestigation bytheDepartment caninclude parts, components, and/or semifinished
articles (which willbecollectively referred toas"inputs"), ontheonehand, andfinished articles on
theother. When thisoccurs, theCommission mustdetermine whether theinputs should beincluded
inthesame domestic likeproduct asthefinished articles, orwhether theinputs andfinished articles
aredistinct domestic likeproducts. Inmaking thisdetermination, theCommission currently considers
several factors, including (1)whether theinputs arededicated totheproduction ofthefinished articles
orhaveindependent uses; (2)whether there areperceived tobeseparate markets fortheinputs and
finished articles; (3)differences inthephysical characteristics andfunctions oftheinputs andfinished
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articles; (4)differences inthecostorvalue oftheinputs andfinished articles; and(5)thesignificance
andextent oftheprocesses usedtotransfer theinputs intothefinished articles. None oftheseindividual
factors isdispositive, andother factors maybeconsidered where appropriate.
TheCommission willalsousethisanalysis incircumstances where thearticles subject to
investigation arefinished articles, butitmustconsider whether thedomestic likeproduct should include
inputs aswellasfinished articles.
Question 2: Section 751(b)(1) oftheTariff Actof1930, asamended bytheURAA, provides
thataninterested party mayrequest reviews offinalaffirmative anti-dumping orders where the
information shows changed circumstances sufficient towarrant areview ofsuchdetermination.
What constitutes "changed circumstances sufficient towarrant review of[an]anti-dumping
order"?
Reply
Both theUSDepartment ofCommerce andtheUSInternational Trade Commission may
undertake changed circumstances reviews under Section 751(b)(1).
Commerce Department Practice:
"Changed circumstances sufficient towarrant review ofananti-dumping order" aredetermined
bytheDepartment onthespecific factsofeachcase. TheUSCongress hasnotprovided theDepartment
witharestrictive definition ofthetypeof"changed circumstances" thatwould besufficient tojustify
review, because itistheview oftheCongress thatthese matters arebestlefttoindividual case
determinations without additional statutory guidelines.
TheDepartment 'spractice isonlytoinitiate achanged circumstances review ifthefactors
underlying itsinitial determination havechanged sufficiently towarrant suchareview, suchaswhen
acountry hasbecome newly entitled toaninjury determination bymeans ofaccession totheWTO.
Moreover, theDepartment hasinterpreted circumstances sufficient towarrant review ofananti-dumping
dutyorder asencompassing something more thansimply adetermination ofwhether dumping margins
havechanged. Suchchanges arenormally accounted forinthecontext ofroutine annual administrative
reviews pursuant toSection 751(a) oftheTariff Actof1930.
International Trade Commission Practice:
Inorder toinstitute areview ofafinalinjury determination ofwhether adomestic industry
wasmaterially injured orthreatened withmaterial injury byreason ofdumped imports, theinformation
available totheCommission, afternotice andcomment fromallinterested parties, mustbesufficient
topersuade theCommission that:
(1) there havebeensignificant changed circumstances fromthose inexistence atthetime
oftheoriginal investigation;
(2) those changed circumstances arenotthenatural anddirect result oftheimposition of
theanti-dumping dutyorder; and
(3) thechanged circumstances indicate thatrevocation oftheorder isnotlikely tolead
tothecontinuation orrecurrence ofmaterial injury tothedomestic industry.G/ADP/Q1/USA/4
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Alleged changed circumstances thatdealneither withthecondition ofthedomestic industry norwith
theeffect ofthesubject imports onthatindustry arenotdeemed relevant totheanalysis.
Thequestion ofwhether sufficient "changed circumstances" existwarranting suchareview
isdetermined onthefactsofeachcase. When making itschanged circumstances determination, the
Commission looks attwocorefactors tomake itsinitial determination ofwhether toinstitute areview
investigation: (1)theimport pattern following imposition oftheorder; and(2)market conditions.
Inthecontext ofimport patterns, theCommission looks atfactors suchaswhether import patterns
havechanged generally; whether competition between theforeign source andthedomestic industry
changed; whether theUnited States salesprice ofimports supplied bytheentity subject totheorder
washigher thantheprice ofcomparable products; whether themarket share oftheforeign producer
hadbeentaken overbyother foreign suppliers; orwhether theforeign source hadbuiltorpurchased
domestic facilities causing areduction inimports.
Astochanged circumstances inmarket conditions, theITClooks atsuchfactors aswhether
there wasachange inthecompetition between theentity subject totheorder andanysegment ofthe
domestic industry shielded frommaterial injury bytheorder; whether therewasadecline inproduction
resulting fromalackofmanufacturers whowould produce acompetitive product orcounterpart because
ofachange intechnology; whether there wasachange intechnology which ledtotheimportation
ofanewgeneration ofproducts; whether there wasnosignificant production oftheproduct since
imposition oftheorder orwhether production hadmoved offshore; whether there wasnosignificant
manufacture oftheproduct comparable totheoneuponwhich theorder wasimposed; orwhether there
wasanincrease indomestic demand which could notbesatisfied bydomestic producers. Nooneof
thesefactorsisnecessarilydispositiveofthequestion,andtheCommissionwillconsiderallfactsrelevant
toitsdetermination ofwhether sufficient changed circumstances existtowarrant institution ofareview
investigation.
Question 3: [19]CFR 353.25 enumerates theconditions ofrevocation ofanti-dumping orders.
Oneofthose conditions is:"Itisnotlikely thatthose persons willinthefuture sellthemerchandise
atlessthanforeign market value." (C.F.R. 353.25(a)(1)(ii), (a)(2)(ii)).
What isthestandard used bytheDOC todetermine whether aperson islikely ornot
likely tosellatlessthanfairvalue?
Reply
Section 751(d)(1) oftheTariff Actof1930 provides thattheDepartment "may revoke" an
anti-dumping order, inwhole orinpart, afterconducting anappropriate review. Asthequestion
indicates, theDepartment 'sregulations elaborate upon thisstandard. Sections 353.25(a)(1)(ii) and
353.25(a)(2)(ii)provide,respectively,thattheDepartmentmayrevokeanorderorterminateasuspended
investigation, ormerely revoke anorder inpart,iftheSecretary concludes "itisnotlikely thatthose
persons willinthefuture sellthemerchandise atlessthanforeign market value."
Inevaluating the"notlikely" issue inmostcases, theDepartment hasconsidered three years
ofnodumping margins, plusarespondent 'scertification thatitwillnotdump inthefuture, plusits
agreeing toimmediate reinstatement oftheorder tobeindicative offuture behaviour. Inmostinstances,
thisistheonlyinformation contained intherecord regarding thelikelihood issue. TheDepartment
examines relevant economic factors andother information ontherecord inthose cases where parties
dispute theissue ofwhether itis"notlikely" thatdumping willoccur inthefuture.G/ADP/Q1/USA/4
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When additional evidence isontherecord concerning thelikelihood offuture dumping, the
Department isobligated toconsider thatevidence. Inthisregard, inevaluating suchrecord evidence
todetermine whether future dumping isnotlikely, theDepartment hasconsistently examined allrelevant
economic factors andother information ontherecord inaparticular case. Depending upon thefacts
ofthecase, theDepartment willconsider suchfactors as:conditions andtrends inthedomestic and
home market industries; currency movements; theability oftheforeign entity tocompete intheUS
marketplace without salesatlessthanfairvalue; pricing trends intherelevant industry; inventory
levels;evidencesubmittedindicatingwhetherfuturedumpingislikely;andpotentialmarginsifdumping
weretorecur. None oftheseindividual factors isdispositive, andother factors mayalsobeconsidered
where appropriate.
Question 4: According to19CFR 353.25(b) [now 351.222], aninterested party mayrequest
theSecretary inwriting torevoke ananti-dumping order during thethird andsubsequent annual
anniversary months ofthepublication ofanorder orsuspension ofinvestigation (thecalendar
month inwhich theanniversary ofthedateofpublication oftheorder orsuspension occurs.)
What arethereasons andunderlying rationale thattherequest should bemade onlyduring
thethird andsubsequent annual anniversary months ofthepublication ofanorder?
Ifthatrequest issubmitted later, itwillberejected. Thisseems tobeinconflict with
thespirit oftheWTO Agreements, inparticular, withArticle 11.2ofA-DAgreement, because
theinterested parties 'right torequest thereview isunduly limited. What istheopinion ofthe
USregarding thisissue?
Reply
TheDepartment'sregulationconformsfullywiththeWTOAnti-DumpingAgreement.Article11
establishes abroad based standard under which revocation iswarranted iftheauthorities determine
thattheorder "isnolonger warranted". TheDepartment hasaproven mechanism inplace toreview
theneedforthecontinued imposition ofduties andtorevoke anyanti-dumping measure where that
neednolonger exists. Article 11.2states thataninterested party mayrequest areview "toexamine
whether thecontinued imposition ofthedutyisnecessary tooffset dumping". Where arevocation
review iswarranted, companies needonlyfileatimely request forrevocation withtheDepartment
inorder toreceive suchareview. Because theDepartment 'sregulation provides thatrevocation may
occur where acompany hasreceived three zerodumping margins, andallother necessary conditions
havebeenmet,arevocation request mayonlybeconsidered inthecontext ofathirdorsubsequent
review. Therequirement ofatimely request doesnotserve asabarrier torevocation, butensures
thatcertain critical functions fortheproper conduct ofarevocation review aresatisfied. These critical
functions include:
1. providing notice toallinterested parties thatrevocation isbeing considered;
2. providing interested parties withtheopportunity tosubmit relevant information andcomment
sothattheDepartment canconduct athorough examination oftheinformation andeffectively
apply theprescribed criteria foradetermination ontheissue ofrevocation; and
3. conducting verifications -which under USlawarerequired inarevocation review, butnot
inother reviews.
These procedures donotviolate anyprovision ofArticle 11and,infact,enhance compliance
withitsrequirement thatauthorities "review theneedforcontinued imposition oftheduty". Upon
completion ofthese critical functions, inaccordance withArticle 11.2, revocation isappropriate only
iftheauthorities determine thattheanti-dumping dutyis"nolonger warranted".