WORLD TRADE
ORGANIZATIONG/ADP/W/434
1 October 2003
(03-5170)
Committee on Anti-Dumping Practices Original:  English
TRANSITIONAL REVIEW MECHANISM IN CONNECTION WITH
PARAGRAPH 18 OF THE PROTOCOL ON THE ACCESSION OF
THE PEOPLE’S REPUBLIC OF CHINA
Questions and Comments of Japan
The following communication, dated 30 September 2003, has been received from the
Permanent Mission of Japan.
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1. Japan welcomes that, in the second year after accession, implementation by China of its
commitments on Market Access has progressed and is entering into a cruising phase.  It appreciates
efforts by China for developing and improving necessary regulatory framework and smoothly
implementing phase-in commitments.  In a transitional period of evolving regulations, the importanceof regulatory transparency, predictability, stability and consistency is paramount; the value of market
access commitments and the efforts to implement them could be easily clouded out by a shortness of
such elements either in regulations themselves or in their application.  The transitional review
mechanism could be useful for making those transitional efforts more efficient and productive, and it
is a pleasure for Japan to contribute to this process.
2. In this context, China is further invited to ta ke necessary steps to ensure regular and effective
application of public comments procedures, well-in-advance publication of laws and regulations,
avoidance of abrupt regulatory change, clear-demarcation of departmental responsibilities,
improvement in inter-departmental and central-provincial coordination and consistency etc.
3. In accordance with Paragraph 18 of the Protocol on the Accession of the People’s Republic
of China, which states that “China shall provid e relevant information to each subsidiary body in
advance of the review” and in the spirit of cooperation to render the TRM process most efficient and
effective, Japan requests China to provide in advance of the meeting of the Committee on Anti-
Dumping Practices responses and relevant inform ation to the following questions and comments.
Q1. The Chinese investigating authorities applied “facts available” to determine AD measures
against Japanese “all other” companies without serving a notice of initiation or any
questionnaires to these companies in the following anti-dumping investigations:  Coated
Paper, Phthalic Anhydride, Styrene Butadien e Rubber (SBR), Polyvinyl Chloride, Toluidine
Di Isocyanate (TDI), and Phenol.  It appears that these determinations were inconsistent withArticle 6.8 because the authorities did not provide these companies any opportunity to supply
information within a reasonable period of time.  Please explain reasons, if the Chinese
authorities consider that these determinations were consistent with the AD Agreement.
Q2. Notices of determinations in anti-dumping  investigations of Coated Paper, Phthalic
Anhydride, SBR, Polyvinyl Chloride, TDI and Phenol indicated the following problems for
determining injury and a casual relationship.  These determinations would not have metG/ADP/W/434
Page 2
requirements of “positive evidence” and “objective examination” in Article 3.1.  Please
explain reasons, if the Chinese authorities consider that these preliminary determinations were
consistent with the AD Agreement:
(a) Accuracy of the Data, on which Determinations Based
The preliminary determinations gave rise to a question on the accuracy of the data, on
which these determinations were based, because these determinations did not disclose
actual numbers or the source of the data.  The disclosed data also contained certain
obvious calculation errors.
(b) Evaluation of Injury Factors not in an Unbiased or Objective Manner
The authorities determined that the domestic industry was injured, even though
relevant economic factors did not indicate the domestic industry was in the state of
injury.
In addition, the authorities cumulatively assessed the effects of imports from more
than one country without demonstrating by positive evidence that the volume of
imports from each country was not negligible and without showing any positive
evidence on “the conditions of competition between the imported products” or “the
condition of competition between the imported products and like domestic product”.
(c) Evaluation of All Economic Factors under Article 3.4
The authorities did not evaluate certain economic factors and indices as set forth in
Article 3.4, such as market share of dumped imports and domestic like products.
(d) Causal Relationship in terms of Price
The authorities failed to demonstrate by positive evidence that the dumped imports
had caused the material injury to the domestic industry because of either depression
or suppression by the price of the dumped imports of the price of the domestic like
product to a significant degree.
(e) Causal Relationship between Dumping and Injury to the Domestic Industry
The authorities failed to demonstrate what was the direct cause of the injury to the
domestic industry with positive evidence.  The authority also failed to separate anddistinguish effects of other known factors to the injury of domestic industry from the
effects of the dumping of the dumped imports.
Q3. The authorities made insufficient disclosure of data, on which their injury determinations
were based, in preliminary anti-dumping determinations of Coated Paper, Phthalic Anhydride,SBR, Polyvinyl Chloride, TDI and Phenol.  The authorities also made insufficient disclosure
of data and calculation methodologies for determining published dumping margins in these
investigations.  Consequently, interested parties were unable to make any effective data
analysis.  Interested parties’ comments on the preliminary determinations were therefore
confined to limited matters, and their opportunity to defend their interests was deprived.  Assuch, these preliminary determinations were inconsistent with Articles 3.1 and 12.2.1 of the
AD agreement.  We are afraid that final determinations of the above investigations will be
made inconsistently with Articles 6.4, 6.5 and 6.9 of the AD agreement, if the authorities doG/ADP/W/434
Page 3
not take adequate remedies to such situations.  Please explain reasons, if the Chinese
authorities consider these situations were consistent with the AD Agreement.
Q4. The Chinese authorities acted inconsistently with Article 2.6 of the AD agreement by making
determinations on “like products” without making adequate examination of physicalcharacters and uses of the product under consideration in anti-dumping investigations of
Coated Paper, SBR and Diphenylmethane Di Isocyanate.  Please explain reasons, if the
Chinese authorities consider these determinati ons to be consistent with the AD Agreement.
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