WORLD TRADE
ORGANIZATIONTN/RL/W/29
15 November 2002
(02-6351)
Negotiating Group on Rules Original:  English
THIRD CONTRIBUTION TO DISCUSSION OF THE NEGOTIATING
GROUP ON RULES ON ANTI-DUMPING MEASURES
Paper from Brazil;  Chile;  Colombia;  Costa Rica;  Hong Kong, China;
Japan;  Korea;  Norway;  Separate Customs Territory of Taiwan, Penghu,
Kinmen and Matsu;  Singapore;  Switzerland;  Thailand;  and Turkey
The following communication has been received on 14 November 2002 from the Permanent
Missions of Brazil;  Chile;  Colombia;  Costa Rica;  Hong Kong, China;  Japan;  Korea;  Norway;
Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu;  Singapore;  Switzerland;Thailand and Turkey.
_______________
This is a third contribution to discussion of the Negotiating Group on Rules on anti-dumping
measures.  As we recall, the first paper is contained in document TN/RL/W/6 and the second paper in
document TN/RL/W/10.
Further contributions may be made for future sessions of the Negotiating Group.  As such,
this paper does not necessarily represent the full view of every co-sponsor.  Likewise, we continue to
encourage other Members to contribute with their points of view.
This paper indicates some additional issues of relevant provisions that we seek to clarify and
improve, including the ruling out of abusiv e interpretation of the current AD Agreement.
The order of the issues in this paper is not an indication of priority among them.In order to facilitate the understanding of the issues involved, some examples are provided.
By definition, the examples are limited.  They cannot reflect the full scope of the problems and
provisions in question.
In indicating the issues, some questions are raised with the purpose of promoting the
discussion while giving a sense of the direction the negotiations should have.
A. DEFINITION OF “DUMPED IMPORTS”
Article 3.1 of the ADA establishes that a determination of injury for the purposes of
Article VI of GATT 1994 shall be based on positive evidence and involves an objective examination
of the volume of the dumped imports.
Although the text of the Agreement refers clearly to “dumped imports”, considered as such
following a positive determination, some Members u nderstand that such expression or concept might
mean the total volume of imports from the country under investigation .  This particular view mightTN/RL/W/29
Page 2
lead to serious distortions in the application of antidumping measures.  We believe this interpretation
is not consistent with the Agreement, since the term “dumped imports” should not be expanded to
cover all imports.
An Illustrative Example:
In an antidumping investigation on imports of a specific product, originating from one
specific country, it was determined a margin of dumping of 10% for company A and no positive
determination was made for company B, the only other firm of this specific country.  The latter was
responsible for more than 90% of the imports un der investigation during the period analysed.  In
order to achieve a determination of injury, the volume of dumped imports considered were equal to
the total volume of imports originating from the country in question.
The decision to consider the total imports as the dumped imports, i.e. the decision not to
subtract from the volume of dumped imports those imports originated in company B, means that the
authority grossly overestimated the volume of dumped imports. .
Thus, based on the miscalculation of the volume  of dumped imports, the authority determined
the existence of injury caused by artificially inflated “dumped imports”  and applied antidumping
duties on imports from company A.
Shouldn’t we elaborate a clearer, more detailed, definition of “dumped imports”, in order to
avoid misinterpretations and consequently the misuse of antidumping duties?
B. DEFINITION OF “SUFFICIENT QUANTITY OF SALES OF THE LIKE PRODUCT IN
THE DOMESTIC MARKET FOR THE DETERMINATION OF THE NORMAL VALUE”
The second footnote to Article 2.2 of the ADA establishes that when the sales of the like
product in the domestic market of the exporting country amount to 5% or more of the sales of the
product under consideration to the importing Member, those sales in the domestic market will be
considered as sufficient quantity for the determination of the normal value.
When the calculation of the dumping margin requires, for a fair comparison, the definition of
categories of the product under investigation, it is not clear whether the test of “sufficient quantity ofsales” should apply to the latter as a whole or to each category established by the investigating
authority.
An illustrative example:
In an anti-dumping investigation, the total sale s of the like product in the domestic market
represented less than 5% of its sales to the importing Member and the authorities disregarded all the
domestic sales for the determination of the normal value.  Nevertheless, in another AD investigation,
the total sales represented more than 5% of its sales to the importing Member, the authorities re-
applied the 5% test to the sales of each category of the product under investigation.  As sales in thedomestic market of a specific category did not repr esent 5% or more of its sales to the importing
Member, those sales in the domestic market were not  considered for the determination of the normal
value.
Shouldn’t we try to clarify this provision in order to avoid that the test of “representativeness
of domestic sales of the like product” be used as a way to artificially reduce the possibility of
calculating normal value on the basis of sales to the domestic market of the exporting country or to
artificially increase the use of constructed values? Wouldn’t it be necessary to define whether the testTN/RL/W/29
Page 3
should be applied to the product as a whole or to the categories? Isn’t there a potential distortive effect
due to such a lack of definition?
C. CONSTRUCTED EXPORT PRICE: CONDITIONS TO DISREGARD THE EXPORT
PRICE PRACTISED
Article 2.3 of the ADA establishes that when there is no export price or where it appears that
the export price is unreliable because of association or compensatory arrangement between the
exporter and the importer or a third party, the export price may be constructed.
Differently from what is established in Article 4.1, which defines related parties, Article 2.3
does not define association .   Shouldn’t there be a clear definition of what constitutes association or
compensatory arrangements?
Additionally, shouldn’t the investigating authority explain, in the pertinent determination, the
reasons for considering the export price unreliable, since the mere establishment of association or
compensatory arrangement is not enough?
D. CUMULATIVE ASSESSMENT OF IMPORTS: PARAMETER FOR DEFINITION OF
NEGLIGIBLE VOLUME OF IMPORTS
Article 3.3 raises several important issues related to cumulation .  One of these is that the
volume of imports from each country should not be negligible.  However, Article 3.3 does not
establish a parameter for definition of negligible volume of imports, thereby granting investigating
authorities excessive freedom to establish their own parameters.
Shouldn’t we seek to set an appropriate parameter?
E. PRICE UNDERTAKINGS – “LESSER-PRICE RULE”
Article 8.1 stipulates that it would be advisable that the price increase shall be lower than the
margin of dumping if such increase is adequate to  remove the injury to the domestic industry.  This
concept is analogous to the “lesser duty rule” of Article 9.1 of the Antidumping Agreement, but
applicable, exclusively, to price undertakings.
As the objective of such a measure should be limited to eliminating the injurious effect of the
dumping, wouldn’t it be inappropriate to have a level of price undertaking that implies a price
increase higher than necessary to remove the injury?
F. PUBLIC NOTICE AND EXPLANATION OF THE DETERMINATIONS
Many issues under Article 6 on evidence are,  inter alia,   intimately linked to the issue of
public notice under Article 12, with respect to the various stages in an investigation
Too often, investigations rely on inaccurate, misleading and unrepresentative data .  In
particular, when using constructed values and samples, rigorous standards and methods should be
applied .  In this context, we have previously pointed  to the need for investigating authorities to
actively seek correct, relevant, representative and statistically valid data and information as well as
giving interested parties full opportunity to present their facts and views during the course of aninvestigation.
Likewise, there is a particular need for improved standards and procedures for public notices
and explanations of determinations.  Such procedures should provide the public and any interestedTN/RL/W/29
Page 4
party with all facts, methods and assessments, in cluding a detailed description on how the exact
results relating to dumping and injury determination have been derived at, in order to allow
independent scrutiny.
(i) Initiation of the Investigation
Article 12.1 establishes that adequate information on different aspects of the investigation
should be introduced either in the public notice or in a separate report.  There is, nevertheless,
fundamental information, which is not mentioned in this Article.  For example, the period under
investigation for dumping and injury, as well as the conclusions reached by the investigating
authorities upon the evidence presented in the public notice (since the Article only refers to the
allegations presented).
Shouldn’t Article 12.1 be revisited in order to seek greater clarification and detail and to
guarantee transparency in the investigation since its initiation?
(ii) Preliminary and Final Determination:
Article 12.2 refers to the public notice or to the separate report where the explanations
regarding preliminary and final determinations must be introduced, as well as matters of fact and law,
which have led arguments to be accepted or rejected.
In order to guarantee that the relevant and necessary explanations will be made available,
shouldn’t Articles 12.2.1 and 12.2.2 be more detailed?
For example, wouldn’t it be worth mentioning that where the investigating authority should
adopt the normal price of exportation for a third country, it should explain the criteria used forselecting the third country?
In case of using samples as provided in Article 6.10, shouldn’t the criteria for the selection be
explained?
In case of using the constructed price, shouldn’t the investigating authority explain the
reasons for choosing certain criteria for establishing the amounts of administrative costs, of sales andgeneral costs, as well as the amount of profit?
Shouldn’t the investigating authorities be requi red to present the analysis on the impact of
other factors on the domestic industry?
These are only a few examples of aspects th at should be contemplated in Article 12.2.
G. PERIODS OF DATA COLLECTION FOR ANTI-DUMPING INVESTIGATIONS
Although the Agreement on Implementation of Article VI of GATT 1994 refers to the period
of data collection for dumping investigations when it refers to the "period of investigation", it does not
establish any specific period of investigation, nor does it establish guidelines for determining an
appropriate period of investigation, for the examination of either dumping or injury.
In light of the foregoing with respect to origin al investigations to determine the existence of
dumping and consequent injury, we find it important to assure that the period for data collection for
dumping investigations coincide with the period of data collection for investigating sales below cost
and that the period of data collection for injury investigations include the entirety of the period of data
collection for the dumping investigation.TN/RL/W/29
Page 5
We consider that it is necessary that the ADA provide guidelines for determining what period
or periods of data collection may be appropriate for the examination of dumping and of injury.
H. TREATMENT IN CASE OF A LARGE NUMBER OF EXPORTERS, PRODUCERS,
IMPORTERS OR TYPES OF PRODUCTS
According to Article 6.10, as a general rule, the authorities will determine a dumping margin
for each known exporter or producer concerned of the product under investigation.  In cases where the
number of exporters, producers, importers or type of products involved is so large as to make such a
determination impracticable, the authorities may limit their examination “…either to a reasonable
number of interested parties or products by using samples which are statistically valid on the basis ofinformation available to the authorities at the time of  the selection, or to the largest percentage of the
volume of the exports from the country in question which can reasonably be investigated…”.
An Illustrative Example:
An investigation has been initiated involving 15 exporting companies.  The investigating
authority considers it impractical to determine in dividual dumping margins to all of them and decides
to limit the examination to only 3 exporters, which it considers to be a reasonable number.
Wouldn’t it be beneficial to elaborate clear and precise criteria in this matter, particularly to
clarify terms like “reasonable number” or “largest percentage of the volume......... which can
reasonably be investigated”? Isn’t it desirable to ensure that relevant criteria of representativity are
established? Furthermore, isn’t there a need to qualify the situations where samples may be used?
__________