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ANNEX A
Third Party Submissions and Oral Statements
Contents Page
Annex A-1 Third Party Submission of Argentina A-2
Annex A-2 Third Party Oral Statement of Argentina A-8
Annex A-3 Third Party Submission of Hong Kong, China A-13
Annex A-4 Third Party Oral Statement of Hong Kong, China A-22
Annex A-5 Third Party Submission of Israel A-24
Annex A-6 Third Party Submission of Norway A-27
Annex A-7 Third Party Oral Statement of Norway A-35WT/DS217/R
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ANNEX A-1
THIRD PARTY SUBMISSION OF ARGENTINA
(17 January 2002)
TABLE OF CONTENTS
Page
I. INTRO DUCTION ................................................................................................................. 3
II. INCONSISTENCY OF THE BYRD AMENDMENT WITH ARTICLES 5.4 OF
THE AD AGREEMENT AND 11.4 OF THE SCM AGREEMENT (INITIATION
OF INVESTIGATIONS AND ADOPTION OF PROVISIONAL  MEASURES)............ 3
III. INCONSISTENCY OF THE BYRD AMENDMENT WITH ARTICLES 8.3 OF
THE AD AGREEMENT AND 18.3 OF THE SCM AGREEMENT (PRICE
UNDERTAKINGS) FROM THE POINT OF VIEW OF THE DEVELOPINGCOUNTRI ES...................................................................................................................... .... 4
IV. INCONSISTENCY OF THE BYRD AMENDMENT WITH ARTICLE XVI: 4
OF THE WTO AG REEMENT............................................................................................. 6
V. CONCLUS ION ................................................................................................................... ... 6WT/DS217/R
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I. INTRODUCTION
1. Argentina thanks the Panel for this opportunity to submit its comments on these proceedings
as a third party, and would like to turn to the ar guments of the parties concerning the inconsistency of
the Continued Dumping and Subsidy Offset Ac t of 2000 (known as the Byrd Amendment) with
Article 5.4 of the Anti-Dumping Agreement (hereina fter the AD Agreement) and Article 11.4 of the
Agreement on Subsidies and Countervailing Measures (hereinafter the SCM Agreement), Articles 8.3
of the AD Agreement and 18.3 of the SCM Agreement, and Article XVI: 4 of the WTO Agreement.
2. Firstly, Argentina submits that the said Act is inconsistent with Articles 5.4 of the
AD Agreement and 11.4 of the SCM Agreement and can be used to create, artificially, conditions thatencourage enterprises to file anti-dumping or anti-subsidy complaints, favouring the initiation of
investigations and the application of provisional measures and impacting negatively on trade flows.
3. Secondly, Argentina submits that the distribution of offsets to the affected producers as
stipulated in the Act weakens the ability of the Un ited States authorities to determine objectively
whether there should be an agreement on price undertakings (Articles 8.3 of the AD Agreement and
18.3 of the SCM Agreement), and thus hinders effort s to explore the possibilities of "constructive
remedies" (Article 15 of the AD Agreement), impairing the special situation of the developing
countries.
4. Thirdly, Argentina submits that the system of incentives created by the Continued Dumping
and Subsidy Offset Act of 2000 should be considered inconsistent with the obligations established in
the AD and SCM Agreements, and results in the violation of Article XVI: 4 of the WTO Agreement.
II. INCONSISTENCY OF THE BYRD AME NDMENT WITH ARTICLES 5.4 OF THE
AD AGREEMENT AND 11.4 OF THE SC M AGREEMENT (INITIATION OF
INVESTIGATIONS AND ADOPTION OF PROVISIONAL MEASURES)
5. Argentina submits that the Byrd Amendment breaches the provisions of Articles 5.4 of the
AD Agreement and 11.4 of the SCM Agreement in that it induces United States producers to petition
for the initiation of investigations or to support th em.  Thus, it is inconsistent with the object and
purpose of those provisions.
6. Indeed, the provisions are aimed at the due selection of domestic producers that could be
interested in an investigation, ensuring an adequa te degree of representativeness within the industry
concerned.  They should not, under any circumstances, be used for the artificial creation of conditions
that encourage companies to file anti-dumping petitions or that foster the initiation of investigations.
7. To accept this would be to impair the idea of "selection", under which both articles provide
for a procedure involving percentages (50 per cent and 25 per cent) to ensure objective
representativeness of those domestic producers that are truly affected.
8. As regards the United States argument that the subjective reason
1 for the domestic industry's
support for the initiation of an anti-dumping investigation is irrelevant in that it is not provided for in
the AD Agreement, Argentina repeats and stresses that it is not the subjective reason that is at issue,
but the change brought about by the incentive offered to the local producers by the Byrd Amendment
in enabling offsets to be provided for the so-called "qualifying expenditures".  The crux of theproblem is not the personal and subjective reason of each of the complainant producers, but
specifically, the incentive to file complaints prov ided by the Act, and the access it gives to a
mechanism for the payment of offsets for so-called "qualifying expenditures".
                                                     
1 First written submission by the United States, paragraph 119.WT/DS217/R
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9. As regards the industry, being influenced and encouraged by the United States Government,
its interest in petitioning for an investigation and supporting it would not be genuine, a factor which,
in normal circumstances, an objective and reasonable authority would have to take into account in an
investigation for alleged dumping or subsidies.
10. In other words, Members must "take the conditions" that exist at the time of initiation of the
investigation for alleged dumping or subsidies, and not create them as could be the case if the Byrd
Amendment were accepted.
11. Moreover, the last sentence of Articles 5.4 of the AD Agreement and 11.4 of the
SCM Agreement – "however, no investigation shall be initiated when … account for less than 25 per
cent of total production … " – is a sort of "reinsurance" or " de minimis ", which suggests that the
object and purpose of these provisions is to prevent an unjustified proliferation of investigations that
could hinder the normal flow of trade between WTO Members.  The Byrd Amendment would clash
head on with these deterrent provisions because in fact, it favours the initiation of investigations.
12. Finally, it should be borne in mind that the mere initiation of an investigation brings with it
the possibility of provisional measures being introduced (Articles 7 of the AD Agreement and 12.12
of the SCM Agreement).  Hence, the proliferation of investigations could entail concrete injury to a
large number of exporters to the United States market.  In other words, the initiation of an
investigation for alleged dumping or alleged subsidies itself already authorizes the Member concernedto apply provisional measures under WTO rules, and consequently, the proliferation of investigations
could spell the proliferation of provisional measures as well, with their concrete and direct effects on
the flow of trade.
III. INCONSISTENCY OF THE BYRD AME NDMENT WITH ARTICLES 8.3 OF THE
AD AGREEMENT AND 18.3 OF TH E SCM AGREEMENT (PRICE
UNDERTAKINGS) FROM THE POINT OF VIEW OF THE DEVELOPING
COUNTRIES
13. In Argentina's view, the Byrd Amendment viol ates the above-mentioned provisions of the
AD Agreement and the SCM Agreement in that it detracts from the effectiveness of an alternative
remedy, price undertakings, expressly provided for and encouraged by the WTO.  Indeed, with apecuniary incentive to petition for and support investigations of alleged dumping or subsidies, United
States producers are unlikely to be interested in any undertakings:  they would have a pecuniary
interest in the proliferation of investigations and the application of anti-dumping and/or countervailing
duties in order to receive their so-called offsets for "qualifying expenditures".
14. Argentina submits that this serious disincentive to price undertakings is detrimental to the
normal application of the WTO anti-dumping and countervailing duty rules (measures taken by
Member States to protect the normal flow of trade), which always favour the reestablishment of the
trade flow or agreement by parties to restore the trade flow to the extent reasonable.
15. It goes without saying that price undertakings are of fundamental importance to the
developing countries, for whom it is of the utmost necessity to ensure normal access to developed
country markets and for whom it is not easy to overcome  barriers to trade, in particular when they are
established by a developed country.  Acceptance of the Byrd Amendment, with its system of
disincentives to price undertakings, would not only increase the barriers to trade that the developingcountries have to face in order to find outlets for their products, but would also be a direct obstacle to
the creation and establishment of new export-oriented industries in the developing countries.  All of
this would be in breach of the right to devel opment contained in the preamble to the Marrakesh
Agreement, which stipulates that " … there is n eed for positive efforts designed to ensure thatWT/DS217/R
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developing countries, and especially the least developed among them, secure a share in growth in
international trade commensurate with the needs of their economic development … ".
16. Argentina would also like to recall that according to Article 15 of the AD Agreement,
" … special regard must be given by developed country Members to the special situation of
developing country Members when considering the application of anti-dumping measures under this
Agreement.  Possibilities of constructive remedies provided for by this Agreement shall be explored
before applying anti-dumping duties where they would affect the essential interests of developing
country Members."  (emphasis added).  Consequently, the Byrd Amendment is inconsistent not only
with the favouring of price undertakings, but al so with the special situation of the developing
countries.
17. It is important to bear in mind that Article 15 of the AD Agreement imposes an obligation on
the developed countries to explore the possibilities of making use of the "constructive remedies"
provided for and, as stated by the Panel in European Communities – Anti-Dumping Duties on Imports
of Cotton-Type Bed Linen from India2, price undertakings must be considered as constituting one of
these possible remedies.  However, the acceptance of price undertakings as a means of resolving an
anti-dumping investigation resulting in a final affirmative determination of dumping, injury and
causal link, would not be a sufficiently attractive op tion for United States producers in view of the
possibility offered by the Byrd Amendment, which would ensure them the reimbursement of their so-
called "qualifying expenditures".
18. The likelihood of a United States producer accepting a price undertaking is fairly slim:
indeed, a producer that has petitioned for the initiation of an anti-dumping investigation on the basis
of the prerogative offered by the Byrd Amendment is highly unlikely to be interested in accepting a
price undertaking when what can be expected is the imposition of definitive measures following theinvestigation process.
19. While Article 15 "imposes no obligation to actually provide or accept any constructive
remedy that may be identified and/or offered … ", it does "impose an obligation to actively consider,
with an open mind, the possibility of such a reme dy prior to the imposition of an anti-dumping
measure that would affect the essential interests of a developing country."
3  Argentina submits that the
Byrd Amendment provides the necessary mechanisms and tools for greater private sector participationin the initiation of anti-dumping investigations, discourages any cooperation by the sector "allegedly"
affected by the dumped imports in exploring constructive remedies, and at the same time acts as an
obstacle to the use of such remedies prior to the imposition of the anti-dumping measures which affect
the essential interests of the developing countrie s.  In short, the Byrd Amendment "empties" the
constructive remedy alternative offered by Article 15 of the AD Agreement of its content.
20. We add that the Byrd Amendment would not only place the developing countries at a
disadvantage vis-à-vis  the United States producers, but vis-à-vis  the developed country exporters
affected by the Amendment as well.  In short, the developing country exporters would suffer injury
both with respect to the United States producers who petition for and support the initiation ofinvestigations – the beneficiaries of the Byrd Amen dment – and with respect to the other "victims" of
the Byrd Amendment, i.e. the developed country exporters.
                                                     
2 European Communities – Anti-Dumping Duties on Imports of Cotton-Type Bed Linen from India ,
WT/DS141/R of 30 October 2000, paragraph 6.229.
3 European Communities – Anti-Dumping Duties on Imports of Cotton-Type Bed Linen from India ,
WT/DS141/R of 30 October 2000, paragraph 6.233 and footnote 92.WT/DS217/R
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IV. INCONSISTENCY OF THE BYRD AMENDMENT WITH ARTICLE XVI:4 OF THE
WTO AGREEMENT
21. In view of the above considerations, Argentina contends that the Byrd Amendment, because it
establishes a system of incentives to the proliferation of investigations which adversely affects the
normal flow of trade and acts as an obstacle to price undertakings, should be found to be inconsistent
with the above-mentioned WTO obligations under the AD Agreement and the SCM Agreement, and
hence to be in violation of Article XVI:4 of the WTO Agreement.
V. CONCLUSION
22. Argentina does not deny that every WTO Member has a right to spend the money collected in
various ways.4  However, each Member must do so in conf ormity with the international obligations it
has assumed, and in particular, these compensations must not in any way involve a violation of the
commitments assumed under the WTO Agreements.
23. In Argentina's view, the United States' application of the Continuing Dumping and Subsidy
Offset Act of 2000 – the so-called Byrd Amendment – involves a violation of Articles 5.4 of the
AD Agreement and 11.4 of the SCM Agreement in that it creates a mechanism of incentives to initiate
investigations, and hence facilitates the application of provisional measures.  The proliferation of such
initiations and the adoption of such measures inevitably involves an alteration of the normal flow oftrade.
24. We repeat that it is not a matter of investigating the personal and subjective reason of each
local producer for filing a complaint, but rather, of analysing the incentive and the access to a
mechanism for the reimbursement of the so-called "qualifying expenditures" established by the ByrdAmendment.
25. Argentina considers the Byrd Amendment to be inconsistent with Articles 8.3 of the
AD Agreement and 18.3 of the SCM Agreement in that it deprives an alternative remedy expressly
provided for and encouraged under those Agreements of its effectiveness, namely the "price
undertakings".
26. The Byrd Amendment has a particularly damaging impact on the developing countries in that
first of all, it provides the necessary mechanisms and tools for greater private sector participation in
the initiation of anti-dumping and alleged subsidies investigations;  secondly, it discourages any
cooperation by this vast sector "allegedly" affected by the importation of the product under
investigation in exploring constructive remedies;  and finally, it acts as an obstacle to the use of suchremedies prior to the imposition of the anti-dumping measures or countervailing duties which affect
the essential interests of the developing countries.
27. Argentina concludes that the United States legislation known as the Byrd Amendment, with
its system of incentives to the proliferation of investigations affecting the normal flow of trade and theuncertainty involved in reaching price undertakings, should be considered inconsistent with the WTO
obligations under the AD Agreement (Articles 5.4 and 8.3) and the SCM Agreement (Articles 11.4
and 18.3), and hence to be in violation of Article XVI:4 of the WTO Agreement.
28. Were the Panel not to find that the Byrd Amendment was inconsistent with the above-
mentioned provisions, the same type of measure could be used not only by the United States, but by
other countries as well including, in particular, the developing countries.  Indeed, in that case,
Argentina considers that such a move would be appropriate, particularly in the light of
                                                     
4 First written submission by the United States, paragraph 11.WT/DS217/R
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Article XVIII:2 of the GATT 1994, i.e. "in order to implement programmes and policies of economic
development designed to raise the general standard of living of their people, to take protective or other
measures affecting imports …".  In this scenario, the payment of the expenses of local producers that
took the initiative would entitle them to countervai ling duties or anti-dumping measures as "protective
measures" "affecting imports" with a view to protecting a particular industry.
29. If the Byrd Amendment were considered by the Panel to be consistent, WTO Members would
have to consider the possibility of showing greater flexibility in enabling the developing countries to
apply measures of this kind.  One alternative might be to limit the distribution of funds resulting from
the application of anti-dumping and countervailing duties to xx percent of the total in the case of the
developed countries, without any limit of any kind for the developing countries.WT/DS217/R
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ANNEX A-2
THIRD PARTY ORAL STATEMENT OF ARGENTINA
(6 February 2002)
I. INTRODUCTION
1. Argentina is grateful for this possibility of submitting its arguments to the Panel as third party in
these proceedings and commenting on the inconsis tencies of the Continued Dumping and Subsidy
Offset Act of 2000 (hereinafter the "Byrd Amendment") with the obligations of the United States
under the Anti-Dumping Agreement (AD Agreement), the Agreement on Subsidies and
Countervailing Measures (SCM Agreement) and the WTO Agreement.  Specifically, Argentinasubmits that the said United States Act violates, firstly, the articles relating to the initiation of
investigations and the adoption of provisional measures, and secondly, the provisions on price
undertakings, including those which provide for spec ial and differential treatment for the developing
countries.  Finally, Argentina would like to state th at these violations of the AD and SCM Agreements
also imply non-compliance with the requirements laid down in Article XVI.4 of the WTO Agreement.
II. THE BYRD AMENDMENT
A. VIOLATIONS RELATING TO ARTICLES 5.4 OF THE AD AGREEMENT AND 11.4 OF
THE SCM AGREEMENT
1. The Byrd Amendment as an incentive
Argentina considers the Byrd Amendment to be a clear incentive to initiate anti-dumping or
alleged subsidy investigations.  Leaving aside whatever subjective motivation United States producers
may have
1 for requesting or supporting the initiation of such investigations, what is being challenged
here is the United States legislation in itself, since the Byrd Amendment acts as an incentive.  It
clearly alters the preexisting conditions when it comes to deciding whether or not the anti-dumping or
alleged subsidy investigation should be initiated.  Regardless of whether the implementing authority,
acting in an objective and reasonable manner, can determine which are the producers with a genuine
interest in requesting an investigation and which of the producers are motivated solely by their interest
in receiving an offset for expenses incurred, the fact is that what is being challenged here is the
mechanism of the Byrd Amendment, which operates as an incentive to file complaints.
Bearing this in mind, Argentina would like to dr aw attention to the scope of this incentive:
under the Byrd Amendment, the conditions that all WTO Members must take into account when
considering whether to initiate an investigation are altered by the introduction, in the legislation of a
Member (the United States), of elements that lead to the artificial creation of conditions for a purpose
                                                     
1 First written submission by the United States, paragraph 119:  "Contrary to the complaining parties'
arguments, a simple review of the text confirms that there is no requirement in Article 5.4 and 11.4 thatadministering authorities determine the reason for the domestic industry's support .  The obligation is to
determine whether the quantitative benchmarks have been me t.  (…).  Rather, the complaining parties argue the
reason for support is not appropriate.  The complaining parties would have this Panel read into the agreements arequirement that the administering authority must determ ine that, in addition to the expression of support, the
domestic industry support for the investigation is 'true' or 'genuine'".WT/DS217/R
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not provided for in the WTO Agreements, elemen ts which constitute an encouragement to file
complaints.  In other words, these elements would clearly boost the number of complainants and
facilitate the achievement of the minimum thresholds – percentages – required under the AD and
SCM Agreements for the initiation of an investigation.
In its turn, this objective framework legally created by the provisions of the Byrd Amendment
multiplies the regular impact on trade of the mere filing of an anti-dumping or alleged subsidy
complaint, since it is well known that apart from the possible application of provisional measures, the
mere filing of a complaint can have a chilling effect on trade;  and it is precisely this incentive to file a
complaint that the Byrd Amendment generates.
Article 5.4 of the AD Agreement sets up two separate calculations to determine that a
minimum level of "support" for the application is shown by domestic producers and a proper
determination of standing is made prior to the initiation of the anti-dumping investigation at issue, as
confirmed by the findings set forth in the report of the panel on European Communities – Anti-
dumping Duties on Imports of Cotton-Type Bed Linen from India .2
The new element which would act as an "encouragement" in the case of the Byrd Amendment
is the alteration of the conditions to be considered by the authorities "on the basis of an examination
of the degree of support for, or opposition to".  Argentina considers that the United States legislation
creates conditions which permit the alteration – artificially and by introducing new elements throughthe reimbursement of "qualifying expenditures" – of the "degree of support for, or opposition to, the
application expressed by domestic producers of the like product".  While it is correct to use methods
of calculation to quantify the examination of the degree of support, the Byrd Amendment acts "a
priori", modifying the conditions and thus influencing the "degree of support for" or "opposition to".
2. Unjustified proliferation of investigations.  Effect on trade
Argentina would like to repeat that incentives  of the Byrd Amendment kind would produce an
unjustified and unreasonable proliferation of anti-dumping or alleged subsidy investigations.  Indeed,
if WTO Members were free to apply such incentives, they themselves could create conditions that
would encourage the filing of anti-dumping or alleged subsidy investigations.  As already stated, the
mere act of filing for the initiation of an investigation would already have a concrete disruptive effecton trade – a chilling effect – as has already been confirmed in WTO practice.
Indeed, Argentina repeats that the provisions of Articles 5.4 of the AD Agreement and 11.4 of
the SCM Agreement, which establish minimum percentages (25%, 50%) for ensuring objective
representativeness of the domestic industry, in fact constitute a deterrent to the unjustifiedproliferation of investigations that could affect the flow of trade.  An incentive such as the Byrd
Amendment would be in direct violation of these provisions, being inconsistent with their object and
purpose.
3. Unjustified proliferation of investigations.  Resulting imbalance
The AD and SCM Agreements provide the instruments needed to correct the imbalances
caused by goods export practices that involve dumping or subsidization, in other words practices
which alter the conditions of competition in the markets.  Under these two agreements, measures  may
legitimately be adopted with a view to re-establishing the mentioned balances through anti-dumpingor countervailing duties, while at the same time, instruments are provided to defend the domestic
industries against dumping or subsidies.  If a WTO Member also had the right to implement additional
incentives to increase the number of investigations, the other WTO Members would be unduly
                                                     
2 WT/DS141/R, 30 October 2000, paragraphs 6.211 and 6.218.WT/DS217/R
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disadvantaged with respect to that Member.  Indeed, an incentive such as that provided by the Byrd
Amendment would be detrimental to the results achieved during the negotiation of the
WTO Agreements in that it would introduce an element that would disrupt the regulatory balance
between the capacity of a Member to protect itself against unfair practices and the rights of the otherMembers whose market access and enjoyment of negotiated concessions have not been equally
restricted.
In other words, the Byrd Amendment is a legal creation which introduces a disruptive element
by adding incentives – through the reimbursement of qualified expenditures to petitioners – to the
conditions provided for in the text of Articles 5.4 of the AD Agreement and 11.4 of the
SCM Agreement.
B. VIOLATIONS RELATING TO ARTICLES 8.3 OF THE AD AGREEMENT AND 18.3 OF
THE SCM AGREEMENT, AND SITUATION OF THE DEVELOPING COUNTRIES
The above-mentioned imbalance is amplified where the country involved is a developing
country.
1. Price undertakings
Argentina submits that the provisions of the Byrd Amendment constitute an incentive to the
initiation of investigations and, at the same time, a disincentive to price undertakings.
Price undertakings are an alternative remedy, expressly provided for in the WTO rules, by
which those who need to apply an anti-dumping meas ure or a countervailing duty try to smooth their
differences with those who wish to be able to continue exporting, in spite of the presumption that bydoing so they are engaging in unfair trade practices that could alter the conditions of competition in
the markets.
A provision such as the Byrd Amendment would deter domestic market producers from
seeking a price undertaking and encourage them to take advantage, instead, of offsets of the kind
provided – mandatorily - under that Amendment.
In short, on the one hand the challenged US legislation provides an incentive for something
that the WTO seeks to discourage – unjustified anti-dumping and alleged subsidy investigations –
while on the other hand it acts as a disincentive to using a legitimate instrument provided for underthe WTO rules – price undertakings.
2. Situation of the developing countries
In addition to the above considerations, Argentina would like to stress once again the
fundamental importance of price undertakings for the developing countries, which are more
vulnerable than the developed countries to any type of measures that affects their chances of exportingand developing export industries.  This circumstan ce is in fact mentioned in the preamble to the
Marrakesh Agreement, which recognizes the right of developing countries to sustained development.
Similarly, under Article 15 of the AD Agreement, the situation of the developing countries
must be taken into account when introducing a measur e that could disrupt the normal flow of trade.
Regardless of whether specific actions such as offering constructive remedies are mandatory
or not, the fact is that there does exist an obligation to explore the "possibilities" of using these
remedies in the case of the developing countries, stipulated in Article 15 of the AD Agreement.  In its
report in the case European Communities – Anti-dumping Duties on Imports of Cotton-Type BedWT/DS217/R
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Linen from India , the Panel stated:  "We recall that Article 15 does not require that 'constructive
remedies' must be explored, but rather that the 'possi bilities' of such remedies must be explored, which
further suggests that the exploration may conclude that no possibilities exist, or that no constructive
remedies are possible, in the particular circumstances of a given case.  Taken in its context, however,and in the light of the object and purpose of Article 15, we do consider that the 'exploration' of
possibilities must actively be undertaken by the developed country authorities with a willingness to
reach a positive outcome."
3
Argentina believes that the introduction of incentives such as those resulting from the Byrd
Amendment would be inconsistent with this prov ision of Article 15 of the AD Agreement, which
requires, at least, that the implications of imposing measures that could affect the developingcountries be considered.  Through the Byrd Amendment the United States, as a developed country,
has created an instrument which is inconsistent with the requirements of Article 15 of the
AD Agreement, interpreted in the above-mentioned Panel Report as follows:  "the 'exploration' of
possibilities must be actively undertaken by the developed country authorities with a willingness to
reach a positive outcome."  The Byrd Amendment not only is not conducive to, it is in fact adisincentive to, any active effort to explore possibilities;  and worse still, it makes the idea of
considering a hypothetical price undertaking less attractive in view of an "almost certain"
reimbursement of qualified expenditures as the result of the petition for the initiation of an
investigation.
Consideration of qualified expenditures to be reimbursed further aggravates the situation from
the point of view of the developing countries, since the reimbursement covers a wide range of
expenditure categories:
4  (1) manufacturing facilities;  (2) equipment;  (3) research and development;
(4) personnel training; (5) acquisition of technology; (6) health care benefits to employees paid for by
the employer; (7) pension benefits to employees paid for by the employer; (8) environmentalequipment, training or technologies; (9) acquisition of raw materials and other imputs; (10) working
capital or other funds needed to maintain production.  Obviously there is a requirement that these
expenditures should be related to the production of the actual product at issue.  However, the
inclusion of some of these categories, for example research and development expenditures, could be
understood, from the point of view of the developing countries, as a disguised subsidy.  Likewise, the
possibility of including in the claim for expenditures items (6) and (7) relating to health care benefits
and pension benefits to employees paid by the employer would appear to be excessive as regards thedetermination of dumping under the AD Agreement.  If the object pursued is to avoid cases in which
the product cost does not provide for adequate protection of the rights of the worker and production is
ultimately facilitated without respect for social and/or welfare legislation, the Byrd Amendment, by
reimbursing expenditures, is not the instrument to modify a circumstance that is not expressly
provided for in multilateral regulations.
If the Byrd Amendment as such were declared consistent with WTO obligations, the
developing countries would require greater flexibil ity under other articles of  the GATT – for instance
Article XVIII – so that a Byrd Amendment type mechanism could be applied more loosely, according
to the particular difficulties faced by the developing countries in achieving competitive status onforeign markets.
                                                     
3 WT/DS141/R, 30 October 2000, paragraph 6.233.
4 Federal Register/Vol.66 N184/Friday, 21 September 2001/Rules and regulations, p. 48552, Subpart F-
Continued Dumping and Subsidy Offset #159.61.  General (c) Qualifying expenditures.WT/DS217/R
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III. CONCLUSION
In the light of the above considerations, Argentina repeats what it requested in its first written
submission, i.e. that the Panel find that the Byrd Amendment is inconsistent with Articles 5.4 of theAD Agreement and 11.4 of the SCM Agreement as well as Articles 8.3 and 18.3 of the
SCM Agreement, and is therefore also inconsistent with Article XVI.4 of the WTO Agreement.WT/DS217/R
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ANNEX A-3
THIRD PARTY SUBMISSION OF HONG KONG, CHINA
(17 January 2002)
I. INTRODUCTION
1. The dispute at issue concerns the Continued Dumping and Subsidy Offset Act of 2000  (also
known as the " CDSOA"  or "Byrd Amendment" ) which was enacted into law by the United States on
28 October 2000.  Hong Kong, China decided to participate in the current proceedings as a third party
in view of the systemic importance of the dispute.
2. Hong Kong, China does not question the right of WTO Members to enact domestic legislation
to protect legitimate trade interests, but such legislation must not detract from their obligations under
the WTO.  We believe that the CDSOA  constitutes a violation by the United States of their obligations
under the following WTO provisions:
- Article 18.1 of the Agreement on Implementation of Article VI of the General
Agreement on Tariffs and Trade (GATT) 1994 (hereafter referred to as the "ADA")
in conjunction with Article VI:2 of GATT 1994; and
- Article 32.1 of the Agreement on Subsidies and Countervailing Measures (hereafter
referred to as the "ASCM") in conjunction with Article VI:3 of GATT 1994.
We also submit that the CDSOA is inconsistent with the object and purpose of the ADA and the
ASCM, and violates Article 5 of ASCM.
II. THE LEGISLATION AT ISSUE
3. The CDSOA  amends the Tariff Act of 1930, which is the principal statute governing the
United States anti-dumping and countervailing proc eedings, by adding a new Section 754 entitled
Continued Dumping and Subsidy Offset .
4. Section 754(a) provides that:
"Duties assessed pursuant to a countervailing duty order, an anti-dumping duty order,
or a finding under the Anti-dumping Act of 1921 shall be distributed on an annual
basis under this section to the affected domestic producers for qualifyingexpenditures.  Such distribution shall be known as the continued dumping and
subsidy offset."
5. The term "affected domestic producers" is defined in Section 754(b)(1) as including:
"Any manufacturer, producer, farmer, rancher, or worker representative (including
associations of such persons) thatWT/DS217/R
WT/DS234/R
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(A) was a petitioner or interested party in support of the petition with respect to
which an anti-dumping duty order, a finding under the Anti-dumping Act of 1921, or
a countervailing duty order has been entered, and
(B) remains in operation.Companies, business, or persons that have ceased the production of the product
covered by the order or finding or who have been acquired by a company or business
that is related to a company that opposed the investigation shall not be an affected
domestic producer."
6. As for the term "qualifying expenses", it is defined in Section 754 (b)(4) as follows:
"Expenditure incurred after the issuance of the anti-dumping duty finding or order or
countervailing duty order in any of the following categories -
(A) Manufacturing facilities.
(B) Equipment.
(C) Research and development.
(D) Personnel training.(E) Acquisition of technology.
(F) Health care benefits to employees paid by the employer.
(G) Pension benefits to employees paid for by the employer.
(H) Environmental equipment, training or technology.
(I) Acquisition of raw materials and other inputs.(J) Working capital or other funds needed to maintain production."
III. THE ARGUMENTS
A. MANDATORY LEGISLATION
7. According to established GATT and WTO jurisprudence, legislation that mandates action that
is inconsistent with WTO rules and leaves no discretion to the executive branch of government can be
challenged as such.  As summed up in the United States - Tobacco
1 case,
" … panels had consistently ruled that legislation which mandated action
inconsistent with the General Agreement could be challenged as such , whereas
legislation which merely gave the discretion to the executive authority of acontracting party to act inconsistently with the General Agreement could not be
challenged as such ... "   (emphasis added)
                                                     
1 Panel report adopted on 4 October 1994, BISD 41S/13.WT/DS217/R
WT/DS234/R
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The Appellate Body has embraced this rationale.   See United States - 1916 Anti-dumping Act ,
WT/DS136/AB/R, WT/DS162/AB/R, AB -2000-5, AB-2000-6, paragraphs 88-89.
8. That the CDSOA  is mandatory legislation is demonstrated by the repeated use of the word
"shall" in its provisions.  For example, the CDSOA  provides that,
"duties assessed pursuant to a countervai ling duty order, and anti-dumping duty order
… shall  be distributed on an annual basis … to the effected domestic producers …"
(emphasis added)
"[t]he Commissioner shall  establish … a special account with respect to each such
order or finding." (emphasis added)
"[t]he Commissioner shall  distribute all funds (including all interest earned on the
funds) from assessed duties received in the preceding fiscal year to affected domestic
producers …" (emphasis added)
The above passages demonstrate that the CDSOA  is mandatory legislation that leaves no discretion to
the executive branch of the United States governme nt regarding the distribution of the assessed anti-
dumping and countervailing duties to affected domestic producers.  Hence, the CDSOA  as such can be
subject to WTO dispute settlement procedures.
B. ARTICLE 18.1 OF THE ADA AND ARTICLE32.1 OF THE ASCM IN CONJUNCTION
WITH ARTICLE VI OF GATT 1994
9. By mandating specific action against dumping and subsidization that is not in accordance
with Article VI of GATT 1994, as interpreted by the ADA and the ASCM, the CDSOA  is inconsistent
with Article 18.1 of the ADA and Article 32.1 of the ASCM in conjunction with Article VI of
GATT 1994.
10. The relevant provisions are quoted below.
Article 18.1 of the ADA provides that,"[n]o specific action against dumping of exports from another Member can be taken
except in accordance with the provisions of GATT 1994, as interpreted by thisAgreement."
Article 32.1 of the ASCM provides that,
"[n]o specific action against a subsidy of another Member can be taken except in
accordance with the provisions of GATT 1994, as interpreted by this Agreement."
Specific action against dumping and subsidization under Article 18.1 of the ADA and Article 32.1 of
the ASCM
11. In the United  States Anti-dumping Act of 1916 case, the Appellate Body stated that,
"[i]n our view, the ordinary meaning of the phrase 'specific action against dumping' of
exports within the meaning of Article 18.1 is action that is taken in response to
situations presenting the constituent elements of 'dumping' .  'Specific action againstWT/DS217/R
WT/DS234/R
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dumping' of exports, must, at a minimum, encompass action that may be taken only
when the constituent elements  of 'dumping' are present. " 2  (emphasis added)
12. By the same logic, the phrase "specific action against a subsidy" in Article 32.1 of the ASCM
should also be construed to encompass, at a minimum, action that may be taken only when the
constituent elements of subsidization are present.
13. Section 1002 of the CDSOA  illustrates that the Act is taken in response to situations
presenting the constituent elements of dumping and subsidization:
"Congress makes the following findings:
(1) Consistent with the rights of the United States under the World Trade
Organization, injurious dumping  is to be condemned and actionable  subsidies  which
cause injury to domestic industries must be effectively neutralised.
(2) United States unfair trade laws have as their purpose the restoration of
conditions of fair trade so that jobs and investment that should be in the United States
are not lost through the false market signals.
(3) The continued dumping  or subsidisation  of imported products after the
issuance of antidumping orders or findings or countervailing orders can frustrate the
remedial purpose of the laws by preventing market prices from returning to fair
levels.
(4) Where dumping  or subsidisation  continues, domestic producers will be
reluctant to reinvest or rehire and may be unavailable to maintain pension and health
care benefits that conditions of fair trade would permit. Similarly, small business andAmerican farmers and ranchers may be unable to pay down accumulated debt to
obtain working capital or to otherwise remain viable…" (emphasis added)
14. In brief, the Act is to remedy the "continued dumping or subsidization of imported products
after the issuance of antidumping orders or find ings or countervailing duty orders" by transferring
anti-dumping and countervailing duties to the "affected domestic producers".   Therefore, the offsetpayments mandated under the CDSOA are clearly in response to situations presenting the constituent
elements of dumping and subsidization.
15. The terms of the CDSOA  demonstrate that the offset payments are possible only when the
constituent elements of dumping and subsidization are present.  As seen in paragraph 5 above, offsetpayments are only and exclusively available to those producers "affected" by an instance of anti-
dumping or subsidization which has been subject to an anti-dumping duty order, a finding under the
Anti-dumping Act of 1921 or a countervailing dut y order.  Unless there is an anti-dumping
order/finding or a countervailing duty order, the United States authorities cannot assess any anti-
dumping or countervailing duties and as a result, no offset can be paid.  In other words, the constituent
elements of dumping and subsidization (leading to an anti-dumping order/finding or a countervailing
duty order) are prerequisites to offset payments.
16. The above also means that the CDSOA, being a specific action "in response to" dumping or
subsidy, is no different from an action “against”  dumping or a subsidy.  Indeed the very existence of
the CDSOA payment hinges upon the existence of the constituent elements of dumping and
subsidization.  The distribution of the CDSOA pa yment is again based upon the existence of the
                                                     
2 United States – Anti-dumping Act of 1916, AB-2000-5 and 6 at paragraph 122.WT/DS217/R
WT/DS234/R
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constituent elements of dumping and subsidization – the payment will only be distributed to producers
affected by an instance of anti-dumping or subsid ization.  In terms of the effect, the CDSOA provides
a subsidy to the affected domestic industries and places them in an advantageous position comparing
with the alleged dumped or subsidized imports in the cases concerned, which are by definitioncompeting in the same market.  The CDSOA therefore upsets the balance of competitive conditions as
established under the ADA and ASCM in the direc tion of hampering the competitiveness of the
imports concerned.  This upset of balance against the competitiveness of the imports is particularly
serious if the duties imposed and distributed are above what would be adequate to remove the injuries
to the domestic industries.
17. With the above analysis, we submit that the mandated distribution of offsets under CDSOA
constitutes specific action against dumping and subsidization under Article 18.1 of the ADA and
Article 32.1 of the ASCM.
Specific action against dumping and subsidization not authorized under Article VI of GATT 1994
18. The Appellate Body's ruling in the United States - 1916 Anti-dumping Act  is instructive:
"Article VI, and in particular, Article VI:2, read in conjunction with the Anti-
dumping Agreement, limit the permissible responses to dumping to definitive anti-
dumping duties, provisional measures and price undertakings."3
19. The Appellate Body unequivocally restricted pe rmissible responses to dumping to definitive
anti-dumping duties, provisional measures or price undertakings.  Therefore, legislation that mandatesspecific actions against dumping other than these actions constitutes a breach of Article VI of
GATT 1994. The distribution of offsets mandated by the CDSOA does not fall under any of the above
three permissible responses.  In line with the Appellate Body's ruling, the CDSOA , by mandating the
distribution of offsets to domestic producers, is demonstrably inconsistent with Article VI:2 of
GATT 1994.  We believe that the legal reasoning of the Appellate Body applies equally to similar
provisions regarding measures that can be taken in the context of subsidization under the ASCM and
Article VI:3 of GATT 1994.  By way of the analysis  in foregoing paragraphs, we come to a similar
conclusion, i.e. the CDSOA  is a specific action against a subsidy that is not permitted by Article VI:3
of the GATT 1994 as interpreted by the ASCM.
C. OBJECT AND PURPOSE OF THE ADA AND THE ASCM
20. We also submit that the CDSOA  is inconsistent with the object and purpose of WTO anti-
dumping and countervailing laws.
21. First, it is useful to recall that the aim of anti-dumping and countervailing duties is to restore a
level playing field by removing the injury to the relevant domestic industry.   Through the impositionof duties, the playing field (which is allegedly tilted against the domestic producers as a result of
dumping and subsidization) is leveled.  By distri buting anti-dumping and countervailing duties to the
domestic producers, the CDSOA  provides them with an additional (and WTO-inconsistent) layer of
protection.  The level playing field (restored as a result of the imposition of duties) will ironically be
tilted again (but this time against the exporters) by having the duties transferred to the domesticproducers which have already been given adequate protection through the imposition of anti-dumping
and countervailing duties.
                                                     
3 United States – Anti-dumping Act of 1916 , adopted on 26 September 2000, AB-2000-5 and 6 at
paragraph 137WT/DS217/R
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22. Apart from destroying the level playing field, it is also submitted that the CDSOA  runs
counter to the principles of restraint  and proportionality  as evidenced in the following provisions.
Article 11.1 of the ADA provides that,
"An anti-dumping duty shall remain in force only as long as  and to the extent
necessary  to counteract dumping which is causing injury."   (emphasis added)
Article 9.1 of the ADA states that,
"It is desirable that … the (anti-dumping) duty be less than the margin  if such lesser
duty would be adequate  to remove the injury to the domestic industry."  (emphasis
added)
Article 21.1 of the ASCM provides that,"A countervailing duty shall remain in force only  as long as and to the extent
necessary  to counteract subsidization which is causing injury." (emphasis added)
Article 19.2 of the ASCM states that,
"It is desirable ... that the (countervailing) duty should be less than the total amount
of the subsidy  if such lesser duty would be adequate  to remove the injury to the
domestic industry ..."  (emphasis added)
23. The above provisions demonstrate that care must be taken to ensure that the amount of duties
imposed should not be more than what is necessary to remedy the injury caused by dumping and
subsidization.  With the imposition of anti-dumping and countervailing duties, any such injury has
already been removed.  Disregarding the principles of restraint and proportionality, the CDSOA goes
beyond what is necessary to be done by according additional protection to the domestic producers.
D. ARTICLE 5 OF THE ASCMCDSOA payments are subsidies in the WTO context24. For a subsidy to exist within the meaning of the ASCM, there has to be (i) a financial
contribution by a government or any public body within  the territory of a Member which (ii) confers a
benefit and (iii) is specific.  We submit that this is indeed the case with respect to the CDSOA .
25. We shall first establish that the offsets distributed under the CDSOA  are subsidies within the
meaning of Article 1 of the ASCM.  As quoted in paragraph 4 above, Section 754(a) of the CDSOA
provides for distribution of assessed antidumping and countervailing duties to the affected domestic
producers in the United States.  By distributing the duties collected, which constitute an entry to the
US budget, to eligible domestic producers, the United States makes a financial contribution in the
form of a direct transfer of funds referred to in Article 1.1(a)(1)(i) of the ASCM.
CDSOA payments confer a benefit on the recipients
26. We now tackle the question of whether, in a case of a CDSOA  payment against the
background of imposition of duties to counteract a subsidy or dumping, the whole amount paid is a
benefit in the sense of Article 1.1(b) of the ASCM.  The Appellate Body report on Canada –
Measures Affecting the Export of Civilian Aircraft provides some useful guidance on what constitutes
a benefit under Article 1.1(b) of the ASCM.  In th at case, the Appellate Body supported the Panel'sWT/DS217/R
WT/DS234/R
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ruling that the ordinary meaning of "benefit" clearl y encompasses some form of advantage.  In order
to determine whether a financial contribution confers a "benefit", i.e. an advantage, it is necessary to
determine whether the financial contribution places the recipient in a more advantageous position than
would have been the case but for the financial contribution.  In other words, a "benefit" to therecipient exists when the financial contribution makes the recipient "better off" than it would
otherwise have been, absent that contribution.4  Given that a CDSOA  payment would inevitably place
the recipients in a more competitive and advantageous position than would have been the case but for
the transfer, we submit that such a payment confers a benefit referred to in Article 1.1(b) of the
ASCM.
CDSOA payments are specific27. For the CDSOA  scheme to be an actionable subsidy, we must further show that the subsidy
paid is specific within the meaning of Article 2.1 of the ASCM. Pursuant to Article 2.1(a), a subsidy
is specific if the granting authority or legislation li mits access to the subsidy to "certain enterprises".
Pursuant to Article 2.1(b), if the granting authority or legislation establishes objective criteria or
conditions governing the eligibility for and amount of a subsidy, the subsidy is not specific.  As
explained in footnote 2 of the ASCM, objective criteria or conditions are neutral, do not favor certainenterprises over others, and are economic in nature and horizontal in application.  Article 2.1(c)
describes other factors that may be considered, including the use of the subsidy for a limited number
of enterprises, predominant use by certain enterprises and disproportionately large subsidy amounts
for certain enterprises.
28. The CDSOA  meets the criteria for specificity.  It provides specific subsidies as defined under
Article 2.1(a) because it explicitly limits access to the subsidy to certain enterprises, that is, the group
of manufacturers, producers, farmers, ranchers, or worker representatives that were petitioners in
support of an anti-dumping duty order or finding or a countervailing duty order.  Those in the same
industry, even if they are under the same economic condition, but have chosen, for whatever reasons,
not to support such an anti-dumping duty orde r or countervailing duty order are not similarly
subsidized.  The subsidy is therefore specific and se lective in application as it only applies to a certain
group of enterprises within the industries concerned.  Nor is Article 2.1(b) a sufficient defense for the
United States since the criteria governing eligibility for and the amount of the subsidy are not
objective in the sense of footnote 2 of the ASCM.  As argued above, the CDSOA favors enterprisesthat support an antidumping or countervailing duty action over enterprises that choose not to,
regardless of the fact that these enterprises may be under the same economic condition and in same
industry.  The criteria are therefore political rather than economic in nature, nor are they horizontal in
application, as required under footnote 2 of Article 2.1(b).
29. In practice, eligibility under the CDSOA also meets the factors indicating specificity in
Article 2.1(c) of the ASCM.  There is  evidence that it is predominantly used by certain industries andthat disproportionately large amounts are granted to certain enterprises  (e.g. more than one-third of
the 350-odd antidumping and countervailing duty orders are for iron and steel goods; one company
will receive US$31,000,000 or more than 15% of the US$200,000,000 payable for fiscal year 2001
5).
To conclude, the CDSOA payments are specific subsidies as defined in Article 2.1 of the ASCM.
                                                     
4 See Appellate Body report on Canada – Measures Affecting the Export of Civilian Aircraft (ref:
WT/DS70/AB/R of 2 August 1999) paragraphs 149 – 161
5  See Distribution of Continued Dumping and Subsidy Offset to Affected Domestic Producers, Vol. 66
Federal Register 40782 (3 August 2001) and The eBearing Times (7 December 2001).WT/DS217/R
WT/DS234/R
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Nullification or impairment of benefits to other WTO Members
30. According to Article 5 of the ASCM, no Member should cause, through the use of any
subsidy referred to in paragraphs 1 and 2 of Article 1 of the ASCM, adverse effects to the interests ofother Members.  Adverse effects, in the sense of Arti cle 5, can take the form of either (i) injury to the
domestic industry of another Member, or (ii) nullificat ion or impairment of benefits accruing to other
Members under GATT 1994, or (iii) serious prejudice to the interests of another Member.  We submit
that the CDSOA  causes adverse effects in the form of nullification or impairment of benefits as set
forth in Article 5.
31. GATT/WTO case law6 has clarified that three conditions must be met for a complaint on
nullification and impairment to succeed:
(i) a concession in the form of a tariff binding must have been made by a Member;
(ii) a subsequent action that was not reasonably anticipated must have been taken by the
Member that has bound its tariff;7 and
(iii) the subsequent action must have nullified or impaired benefits accruing to other WTO
Members in the sense that it has reduced the value of the concession.
All three conditions have been met in the case of the CDSOA .  On (i), as a result of successive rounds
of multilateral trade negotiations, the United States have bound almost all their tariff lines.  On (ii),
the CDSOA  was enacted subsequent to the entry into force of the Uruguay Round agreements, and
could not have been reasonably anticipated when the Uruguay Round was concl uded.  It should not be
assumed that Members could “reasonably anticipate” the CDSOA  before the tariff concessions entered
into force merely by the fact that similar legislative proposals were being discussed during the
Uruguay Round.  Legislative proposals have to be distinguished from legislation in effect.  If the
effect of possible legislative proposals (instead of legislation) has to be taken into account,
negotiations will be subject to a very uncertain envi ronment.   The fact that the present dispute has
been the object of a complaint by no less than eleven WTO Members also supports our argument that
the CDSOA  is not reasonably anticipated.  On (iii), payments made under the CDSOA , operating as
specific subsidies, enable the United States domestic producers to retain a larger market share in the
United States market than would have been the case absent the payments, thereby upsetting the
balance of competitive conditions established through negotiation of the concession (i.e. tariffbinding).  The resultant displacement of foreign products from the United States markets amounts to a
reduction in value of the concession made by the United States, thereby nullifying the benefits which
should otherwise be accruing to other WTO Members.  The above analysis demonstrates that the
CDSOA  can nullify or impair benefits which should otherwise be accruing to other WTO Members,
and hence is contrary to Article 5 of the ASCM.
                                                     
6 See Panel Report on Japan –Measures Affect ing Consumer Photographic Film & Paper
(ref: WT/DS44R of 22 April 1998) paragraph 10.41.
7 Paragraphs 10.79 & 10.80 of WT/DS44R provide a useful device that helps divide the burden of
proof with respect to the 'reasonable expectations' requirement.  The panel’s understanding in this respect is thatif an alleged measure pre-dates a concession, the affected Members carry the burden of proof to demonstratethat they could not anticipate the effects of the measure.  Conversely, if the measure occurs after negotiations of
the concession, the defending Member has the burden of  proof to show that the measure should have been
reasonably anticipated by the affected  Members.  The CDSOA came into effect after conclusion of the Uruguay
Round tariffs negotiations.  The burden of proof should therefore rest with the United States.WT/DS217/R
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IV. CONCLUSION
32. We conclude from the above analysis that CDSOA  is inconsistent with the following WTO
provisions :
- Article 18.1 of the ADA in conjunction with Article VI:2 of GATT 1994;- Article 32.1 of the ASCM in conjunction with Article VI:3 of GATT 1994;- the object and purpose of the ADA and the ASCM; and
- Article 5 of the ASCM.
33. We would like to point out that Article VI of GATT 1994, the ADA and the ASCM provide
for trade remedy measures which represent exceptions to the GATT/WTO guiding principles of trade
liberalization.  As such, these measures must be used only under the specific conditions laid down in
the aforesaid Agreements.  We are seriously concerned that trade remedy measures are too often used
as tools to protect domestic industries from import competition.  In this respect, we consider it
imperative that the Panel, through its rulings, should confirm the principle of fairness on which the
Agreements are based so that there can be a guarantee that the multilaterally agreed principles and
rules will be fully respected and, in particular, that the disciplines of the WTO Agreements will bestrictly observed.  We respectfully request the Panel to carefully consider our comments and to
recommend that the US bring the CDSOA  into compliance with their WTO obligations.WT/DS217/R
WT/DS234/R
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ANNEX A-4
THIRD PARTY ORAL STATEMENT
OF HONG KONG, CHINA
(6 February 2002)
1. Hong Kong, China participates in this dispute as a third party in view of its systemic
importance.  While a WTO Member may distribute anti-dumping or countervailing duties under its
domestic legislation, such measure must be consistent with its obligations under the WTO.  Like the
complaining parties, we believe that the Continued Dumping and Subsidy Offset Act (CDSOA)
constitutes a violation by the United States (US) of their obligations under:
- Article 18.1 of the Agreement on Implementation of Article VI of GATT 1994
(ADA) in conjunction with Article VI:2 of GATT 1994; and
- Article 32.1 of the Agreement on Subsidies and Countervailing Measures (ASCM) in
conjunction with Article VI:3 of GATT 1994.
2. We also submit that the CDSOA  is inconsistent with the object and purpose of the ADA and
the ASCM and violates Article 5 of the ASCM.
3. First, we submit that the mandated distribution of offsets under the CDSOA  constitutes
specific action against dumping and subsidiza tion under Article 18.1 of the ADA and Article 32.1 of
the ASCM, and such action is not authorized under Article VI of GATT 1994.
4. As stated in the ruling of the Appellate Body in the United States Anti-dumping Act of 1916
case, "the ordinary meaning of the phrase 'specific action against dumping' of exports within the
meaning of Article 18.1 is action that is taken in response to situations presenting the constituent
elements of 'dumping' .  'Specific action against dumping' of exports, must, at a minimum, encompass
action that may be taken only when the constituent elements of 'dumping' are present ".  By the
same logic, the phrase “specific action against a subsidy” in Article 32.1 of the ASCM should be
similarly construed.  It is clear from the provisions of the CDSOA , that the Act is to remedy the
"continued dumping or subsidization of imported products after the issuance of antidumping orders or
findings or countervailing duty orders".  The offsets distributed under the CDSOA are by definition in
response to situations presenting the constituent elements of dumping and subsidization.
5. The CDSOA, being a specific action “in response to”  dumping or subsidy, is no different
from an action “against”  dumping or a subsidy.  In terms of effect,  the CDSOA  provides a subsidy to
the affected domestic industries and places them in an advantageous position comparing with the
alleged dumped or subsidized imports.  Such action was not anticipated during the negotiations of the
WTO Agreements.
6. The distribution of offsets mandated by the CDSOA  does not fall under any of the three
permissible responses to dumping, namely, dumping to definitive anti-dumping duties, provisional
measures or price undertakings, as provided for in the ruling of the Appellate Body in the
United States Anti-dumping Act of 1916 case.  In line with the Appellate Body's ruling, the CDSOA  isWT/DS217/R
WT/DS234/R
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inconsistent with Article VI:2 of GATT 1994.  And, by applying the Appellate Body’s legal reasoning
in the context of subsidization under the ASCM and Article VI:3 of the GATT 1994, we come to a
similar conclusion that the CDSOA  is a specific action against subsidy that is not permitted by
Article VI:3 of the GATT 1994 as interpreted by the ASCM.
7. We also submit that the CDSOA  is inconsistent with the object and purpose  of the ADA and
ASCM.  We all note that the aim of anti-dumping and countervailing duties is to restore a level
playing field by removing the injury to the relevant domestic industry.  By distributing anti-dumping
and countervailing duties to the domestic producers, the CDSOA  provides them with an additional and
WTO-inconsistent layer of protection and therefore destroys the level playing field.
8. The CDSOA  also runs counter to the principles of restraint  and proportionality  as enshrined
in Articles 11.1 and 9.1 of the ADA as well as Articles 21.1 and 19.2 of the ASCM.  Disregarding the
principles of restraint and proportionality, the CDSOA goes beyond what is necessary to be done by
according additional protection to the domestic producers.
9. Finally, we submit that the CDSOA  violates Article 5 of the ASCM.  A CDSOA  payment
inevitably places the recipients in a more advantageous position than would have been the case but for
the transfer.  Following the interpretative guidance provided by the Appellate Body in the Canada-
Measures Affecting the Export of Civilian Aircraft  case, we submit that such a payment confers a
benefit referred to in Article 1.1(b) of the ASCM.
10. We submit that the CDSOA  meets the criteria of a “specific” subsidy under Article 2.1(a) of
the ASCM. The offsets to be distributed are explicitly limited to domestic producers who supported
an anti-dumping duty order or finding or a countervai ling duty order.  We also reject Article 2.1(b) as
a defence for the US.  The CDSOA  clearly favors enterprises that support an antidumping or
countervailing duty action over enterprises that choose not to.  Its eligibility criteria are political rather
than economic in nature, as required by footnote 2 of Article 2.1(b).  The CDSOA  predominantly
benefits certain industries and that disproportionately large amounts are granted to certain enterprises,
thereby meeting the de facto 'specificity' factors in Article 2.1(c).
11. The CDSOA  and the offsets so distributed cause nullification or impairment of benefits to
WTO Members.  According to GATT/WTO jurisprudence, the CDSAO meets the three conditions fornullification or impairment.  The US has bound almost all their tariff lines as a result of successive
rounds of multilateral trade negotiations.  The CDSOA  was enacted subsequent to such tariff binding,
and could not have been reasonably anticipated when the Uruguay Round was concluded.  Finally,
CDSOA payments upset the balance of competitive conditions established through negotiation of the
tariff concession made by the US, thereby nullifying the benefits which should otherwise be accruingto other WTO Members.  Such nullification takes place whenever an offset is distributed to a
domestic producer when the above conditions are met.
12. We conclude that the CDSOA  constitutes a violation by the US of their obligations under the
relevant WTO provisions.  Given the large number of anti-dumping and countervailing duty users, itis of paramount importance that such a WTO-inconsistent measure should be withdrawn
expeditiously.  Otherwise, there is a danger that other Members may introduce similar legislation,
which would cause further upsetting of the balance of rights and obligations provided under the ADA,
the ASCM and other WTO Agreements.
13. Thank you.WT/DS217/R
WT/DS234/R
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ANNEX A-5
THIRD PARTY SUBMISSION OF ISRAEL
(17 January 2002)
I. INTRODUCTION
Israel makes this third party submission to provide the Panel with its view that  the Continued
Dumping and Subsidy Offset Act of 2000 (the Act) is in violation of certain provisions for the
General Agreement on Tariffs and Trade 1994 (GATT 1994),  Agreement on Implementation of
Article VI of the General Agreement on Tariffs and Trade 1994 (AD Agreement) , and the Subsidies
and Countervailing Measures Agreement (SCM Agreement). The Act is a mandatory act that
obligates U.S. Authorities to distribute the proceeds of duties assessed pursuant to anti dumping and
countervailing duty orders among those domestic producers that applied for and supported the
requests for the investigation which led to the imposition and assessment of such duties.
Without prejudice to other issues Israel may wish to raise in the third party meeting, Israel
will address the following three issues in this written submission:
1. The Act is inconsistent with  Article VI of GATT 1994, Article 18.1 of the AD
Agreement and Article 32.1 of the SCM Agreement because it constitutes a “specificaction” against imports not prescribed by those provisions.
2. The Act is inconsistent with Articles 5.4 of the AD Agreement  and Article 11.4 of
the SCM because it distorts and undermines the standing threshold, by providing a
financial inducement to domestic producers for  making applications for theimposition of anti dumping or countervailing measures or for supporting such
applications.
3. The Act is inconsistent with Article 8 of the AD Agreement and Article 18 of the
SCM Agreement because it precludes the US Government from performing anobjective evaluation whether to accept an undertaking.
II. ARGUMENTS
1. The Act is inconsistent with provisions of GATT 1994, the AD Agreement and the SCM
Agreement because it constitutes an impermissible “specific action” against imports.
The Appellate Body in the United States-Antidumping Act of 1916 stated that Article 18.1 of
the AD Agreement prohibits a Member from taking specific action against dumping of exports from
another Member unless that action is in accordance with Article VI:2 of the GATT. The Appellate
Body stated that paragraph VI:2 limits the permissible responses to dumping to definitive anti
dumping duties, provisional measures and price undertakings.
Israel is of the opinion that the Act mandates specific action against dumping that is not
covered under Article VI and is therefore in violation of Article 18.1 of the AD Agreement.  The Act
authorizes the dispersement of the assessed anti dumping duties only if and when the United StatesWT/DS217/R
WT/DS234/R
Page A-25
determines that the elements of dumping are present and accordingly levies an anti dumping duty on
the importation of the product concerned. The Act therefore provides for specific action against
dumping, as that phrase has been interpreted  by the Appellate Body, which is not a provisional
measure in the form of duties or securities, definitive anti dumping duty or a price undertaking and assuch is in violation of Article 18.1 of the AD Agreement.
Article 32.1 of the SCM Agreement can be viewed as the  parallel to Article 18.1 of the AD
Agreement and therefore the same reasoning applying to that Article also applies to Article 32.1 of the
SCM Agreement. As such the Act is a violation of 32.1 of the SCM Agreement.
2. The Act is inconsistent with Articles 5.4 of the AD Agreement  and Article 11.4 of the
SCM because it distorts and undermines the standing threshold by providing a financial
inducement to domestic producers for  making applications for the imposition of anti
dumping or countervailing measures or for supporting such applications.
Under Article X:3 of GATT 1994 there is a requirement that Members “administer in a
uniform, impartial and reasonable manner all its laws, regulations decisions and rulings” which is
applicable to antidumping and subsidy investigations. The principle of “good faith” has been
interpreted by the Appellate Body in United States-Anti Dumping Measures on Certain Hot Rolled
Flat Rolled Carbon Quality Steel Products from  Japan WT/DS184/AB/R/ paragr. 101 as being
incorporated in Article X:3 and “informs the provisions of the Anti Dumping Agreement, as well asother covered agreements.” Thus the rules of objectivity, impartiality and good faith apply to the
determinations of the Authority throughout the anti dumping investigation. Both Article 5.4 of the AD
Agreement and 11.4 of the SCM Agreement require the Authorities to make determinations as regards
the level of support for the application for investigations under the AD and SCM Agreements.  The
question to be determined at this stage is whether there is sufficient industry support for theapplication. The prospect of a monetary  transfer to affected companies  induces such companies to
bring applications and to express support for petitio ns that otherwise would  be uninterested in the
initiation of an investigation. The Authorities have no way of distinguishing support for the
application for the imposition of duties as opposed to the desire not to forego the possible financial
transfer as a result of the imposition of such duties. This undermines the requirement of Articles 5.4 of
the AD Agreement and 11.4 of the SCM Agreement and renders an   “objective” determination to be
carried out by the Authorities impossible.
3.  The Act is inconsistent with Article 8 of the AD Agreement and Article 18 of the SCM
Agreement because it precludes the US Government from performing an objective
evaluation whether to accept an undertaking.
The Act  forms a  clear financial  incentive for producers to  support the imposition of duties
rather than support  the alternative remedy of  an undertaking since only if a duty is imposed will they
receive the transfer of duties collected pursuant to the Act. Since petitioners in the United States  have
an effective veto over the decision by the Authorities to accept an undertaking as provided under
Article 8 of the AD Agreement and Article 18 of the SCM Agreement, the Authorities will not be freeto accept an undertaking. Therefore, the Act  is incompatible with the obligation of the Authorities to
carry out  an “objective” and “fair” examination to  determine  whether to accept an undertaking if
“appropriate”  under Article 8.3 of the AD Agreement and 18.3 of the SCM Agreement.WT/DS217/R
WT/DS234/R
Page A-26
III. CONCLUSION
For the reasons stated above, Israel respectfully requests that the Panel find the Continued
Dumping and Subsidy Offset Act of 2000 to be inconsistent with the obligations of the United Statesunder Article VI of  GATT 1994, Articles 5.4, 8 a nd 18.1 of the AD Agreement and Articles 11.4, 18
and 32.1 of the SCM Agreement.WT/DS217/R
WT/DS234/R
Page A-27
ANNEX A-6
THIRD PARTY SUBMISSION OF NORWAY
(17 January 2002)
Introduction
1. The case at hand concerns whether the US Continued Dumping and Subsidy Offset Act of
2000 (CDSOA), also known as the “Byrd Amendment”, is consistent with the obligations of the
United States under the WTO agreement and annexed agreements.
2. Norway reserved its third party rights in the case during the Dispute Settlement Body meeting
on 23 August 2001 (WTO/217/5). Norway’s participation reflects both systemic and substantive trade
interests.
3. In deciding the case, Norway submits that the Panel should base its arguments on the
following:
I. The Byrd Amendment constitutes mandatory, non-discretionary legislation that is
actionable under WTO law/rules
4. It is established in GATT and WTO jurisprudence that mandatory, non-discretionary
legislation, which is inconsistent with the WTO rules, can be challenged as such, independently from
the application of such legislation.  The Byrd Amendment is a mandatory, non-discretionary
legislation, requiring the US authorities to distribute, on an annual basis, the duties assessed pursuant
to a countervailing duty order, an anti-dumping order or a finding under the Anti-Dumping Act of
1921 to the “affected domestic producers” for certain “qualifying expenses” incurred by them after
the issuance of such order or finding.
5. Under the mandatory Byrd Amendment no discre tion is accorded to the US authorities with
regard to their distribution of offsets. Against this background Norway agrees with Japan and Chilethat it falls within the authority and mandate of the Panel to review the consistency of the Byrd
Amendment as such with the WTO agreements referred  to in the requests for the establishment of the
Panel.
II. The Byrd Amendment is inconsistent wi th Article 18.1 of the Anti-Dumping Agreement
and with Article 32.1 of the SCM Agreement because the offset payments it mandates
constitute specific action against dumping and subsidisation which is not in accordance
with the provisions of the GATT, as interpreted by the Anti-Dumping Agreement and
the SCM Agreement. 
6. Article 18.1 of the Anti-Dumping Agreement provides that:
“No specific action against dumping of exports from another Member can be taken
except in accordance with the provisions of GATT 1994, as interpreted by this
Agreement”.WT/DS217/R
WT/DS234/R
Page A-28
7. In the case United States - Anti-dumping Act of 1916, the Appellate Body analysed how to
determine if the measure at issue was a  “specific action against dumping” and if so, whether it was
one of the permissible actions that are in accordance with GATT 1994 (Article VI) as interpreted by
the Anti-Dumping Agreement. The following interpre tation was given with regard to the concept
“specific action”:
“In our view, the ordinary meaning of the phrase “specific action against dumping” of
exports within the meaning of Article 18.1 is action taken in response to situations
presenting the constituent elements of “dumping”. “Specific action against dumping”
must at a minimum encompass action that may be taken only when the constituent
elements of dumping are present […]”.1
8. Article 32.1 of the SCM Agreement contains parallel language to Article 18.1 of the Anti-
Dumping Agreement, and the phrase “specific action against a subsidy” must be understood similarly
to encompass, at a minimum, action that may be taken only when the constituent elements of a
subsidy are present.
9.  Reference is made to the reasoning by the European Communities, India , Indonesia and
Thailand in this respect demonstrating that, as su ch, the Byrd Amendment mandates a specific action
against dumping and subsidisation.  In the above mentioned case the Appellate Body found that, in
general, specific action could take a wide variety of forms. However, based on its interpretation of
Article VI:2 of GATT 1994, in conjunction with th e Anti-Dumping Agreement, it concluded that  in
response to injurious dumping a Member’s actions were limited to definitive anti-dumping duties,
provisional  measures and/or price undertakings.2
10. A Member’s actions  with respect to subsidies are spelled out in Articles VI and XVI of the
GATT 1994, as interpreted by the SCM Agreement and similarly limited to one of the  followingthree types of action against subsidisation: “countervailing measures” imposed in accordance with
Part V of the SCM Agreement, “countermeasures” against a “prohibited subsidy” imposed in
accordance with Part II of the SCM Agreement, or « countermeasures » against subsidies that cause
« adverse effects » to the interests of the Member concerned, according to Articles 4 and 7 of the
SCM Agreement.
11. The “specific measures” available to (WTO) Members to meet dumping or subsidisation are
thus limited to the abovementioned measures. If  a Member would like to see new measures added to
this exhaustive list, or change the said measures, such proposals for amendments of the WTO
provisions will have to be negotiated within the WTO.  There is no option for adopting unilateral
measures like the US offset at issue.
12. In support of this, the United States itself has argued that limits exist with respect to the
actions a Member state may take in response to unfair trade practices. In  United States - Anti-
Dumping Duties of Salmon from Norway, the United States argued before the panel as follows:
“Regarding the negotiating history of the General Agreement; the United States also
observed that injurious dumping had been viewed with such concern during the
original GATT negotiations that proposals had been considered to permit tougher
                                                     
1 Report of the Appellate Body, United States - Anti-Dumping Act of 1916, WT/DS136/AB/R at
para. 122.
2 United States - 1916 Act, Appellate Body Report WT/DS136/AB/R, para. 137.WT/DS217/R
WT/DS234/R
Page A-29
countermeasures than merely offsetting duties. However, in the end Article VI
remedy had been limited to such duties »3
13.  Finally, reference should be made to the legislative history of the Byrd Amendment, whichclearly demonstrates that the Byrd Amendment was aimed at creating an additional specific measureas a response to foreign dumping and subsidisation - by hitting twice at foreign exporters  and thereby
providing double protection to the US domestic industry.
14. Both the substance of the bill and the manner in which it was  adopted caused significant
concern within the US Congress and Administration. The legislation which constitutes a trade
measure was, due to lack of support, attached to  the FY 2001 Agricultural Appropriations bill and
adopted as part of this. In the October 2000 Statement of Administration policy, the USAdministration stated that “there are significant concerns regarding  administrative feasibility and
consistency with our trade objectives, including th e potential for trading partners to adopt similar
mechanisms.” President Clinton asked Congress to override the Byrd Amendment, taking the position
that the offsets would provide select industries with a subsidy beyond the protection level needed to
counteract foreign subsidies.
III. The Byrd Amendment prevents the United States from making decisions in accordance
with Article 5.4 of the Anti-dumping Agreement and Article 11.4 of the SCM
Agreement, on whether the application for an initiation of an anti-dumping or anti-
subsidy investigation has been made « by or on behalf of the domestic industry »:
15. The Anti-Dumping Agreement and the SCM Agreement stipulate that, except in  “special
circumstances”, the authorities of the importing Member shall not initiate an anti-dumping or anti-
subsidy investigation unless they have received a written application made “by or on behalf of the
domestic industry”.
16. Article 5.4 of the Anti-Dumping Agreement and Article 11.4 of the SCM Agreement set out
the requisite support required in order for the domestic authorities to initiate a dumping or
countervailing duty investigation. These provisions require that such investigations cannot be initiated
“unless the authorities have determined, on the basis of an examination of the degree of support...that
the application has been made by the domestic industry”.
17. The Byrd Amendment, by mandating offset payments to « the affected domestic producers »
provides a strong  financial incentive to domestic producers to file applications for the imposition of
anti-dumping or countervailing measures, or to support such applications made by other domestic
producers.  This implies encouragement to initiate investigations by the US authorities in cases not
necessarily based on a « genuine » interest among the industry concerned.  The Byrd Amendment thuscreates a powerful incentive for companies to bring or support petitions without merit. In short by
offering a « cash reward » the Byrd Amendment encourages abuse of the US AD and CVD
legislation.
18. The Byrd Amendment provides that the offset is only to be paid the “affected domestic
producers”, a category that is defined as including the petitioners and those interested parties who
support the petition. Accordingly, producers that oppose or do not support the petition, are not eligible
for offsets and risk being put at a financial disadvantage vis-à-vis domestic competitors who support
the application.
                                                     
3 Imposition of Anti-Dumping Duties on Imports of Fresh and Chilled Atlantic Salmon from Norway,
ADP/87.  Report of the Panel adopted on 27 April 1992, BISD 41S/229, para. 75.WT/DS217/R
WT/DS234/R
Page A-30
19. A domestic producer cannot be considered to have made an “application”, or to “support” it,
within the meaning of Article 5.4 of the Anti-Dumping Agreement and Article 11.4 of the SCM
Agreement, if he does so in order to qualify for the offset payments provided under the Byrd
Amendment.
20. Thus, the Byrd Amendment has the effect of stimulating the filing of applications and making
it easier for the applicants to obtain the support of other domestic producers, so as to meet the
quantitative thresholds laid down in Article 5.4 of the Anti-Dumping Agreement and in Article 11.4
of the SCM Agreement.4
21. Members must observe the general principle of good faith when performing their treatyobligations.  The Appellate Body has noted that in order to be “objective” an examination must
conform to “the dictates of the basic princi ples of good faith and fundamental fairness”.
5
22. The Byrd Amendment operates in a way which prevents the US authorities from conducting
an objective examination of whether an application is made « by or on behalf of the domesticindustry » as required by Article 5.4 of the Anti-Dumping Agreement and Article 11.4 of the SCM
Agreement.
23. These provisions express two key obligations, bot h of which are affected by the design of the
Act.  First, Articles 5.4 of the Anti-Dumping Agreement and 11.4 of the SCM Agreement require apositive determination by the authorities, carried out on the basis of an examination of the degree of
support or opposition to the application.  Second, the examination must show that the application has
been made “by or on behalf of the domestic industry”.  An application is considered to have been
made “by or on behalf of the domestic industry”, only where the examination shows that an
application passes both of the following positive and negative tests.  A positive test requires that amajority of those in the industry expressing views, supports an application.  A negative test bars
initiation of any application that fails to gain the positive support of producers representing at least
25 per cent of domestic production.
24. The Uruguay Round negotiating history of the said provisions confirms this interpretation.
The present text of these articles was shaped by the widespread reaction against the pre-WTO practice
of the US authorities, simply to rely on an applicant’s assertion that it represented the domesticindustry, unless the majority of the industry actively opposed the petition. Many delegations sought to
require investigating authorities to examine the support for an application before initiation to ensure
that the application was properly filed “by or on behalf of” the domestic industry.  The investigating
                                                     
4 These effects of the Byrd Amendment  were anticipated by some US legislators.  For example,
Representative Kolbe cautioned that:
The lure of a potential monetary windfall could spur litigation under our AD/CVD laws.  In order to be
eligible for the potential windfall, US industry would be encouraged to join in the filing of AD/CVDpetitions.  Otherwise, they would not be eligible for any payments which might be made under this new
provision.
Similarly, Senator Nickles warned that:
[the Byrd Amendment] says if you have a dumping complaint, and if you happen to win, the
benefits go back directly to that company, directly  to the company involved.  So there is a reward and
incentive that if you file a dumping complaint and win, you will receive benefits.  This encourages
lawsuits on dumping becaus e you can win the "lottery".
5  Report of the Appellate Body, United States - Hot Rolled Steel from Japan,  WT/DS184/AB/R,
para. 193.WT/DS217/R
WT/DS234/R
Page A-31
authorities should be required to verify the standing of petitioners.  The Nordic countries expressed
their view, i.e.
“that the investigating authority is obliged to verify that the petitioners satisfy the
‘major proportion requirement’ … before initiating an investigation.  As it seems that
the [Anti-dumping] Code is not sufficiently clear on this point, it should be clarified
in order to prevent unfounded investigations.”6
25. The Byrd Amendment, by making possible, and even encouraging, the initiation ofinvestigations in cases where the domestic industry has no genuine interest in the adoption of such
measures, also leads to unnecessary burdens for foreign exporters because of such unfounded
examinations. If maintained, the Byrd Amendment would thereby alter, in favour of the US thebalance of Members rights and obligations under the Anti-Dumping Agreement and the SCM
Agreement.
26. For the above reasons, Norway submits that the Byrd Amendment is inconsistent with
Article 5.4 of the Anti-Dumping Agreement a nd with Article 11.4 of the SCM Agreement.
IV. The Byrd Amendment is inconsistent with  the undertakings provisions of Articles 8.1
and 8.3 of the Anti-Dumping Agreement and Articles 18.1 and 18.3 of the SCM
Agreement, by making it more difficult to get acceptance for undertakings by USauthorities
27. Articles 8.1 of the Anti-Dumping Agreement and Article 18.1 of the SCM Agreement provide
for an alternative to the imposition of anti-dumping and countervailing duties. Every Member State is
required to consider proposed undertakings in good faith  as an alternative to the imposition of duties.In support of this the provisions of Articles 8.3 of the Anti-Dumping Agreement and 18.3 of the SCM
Agreement, require authorities to have a proper reason for rejecting an offered undertaking.
28. Under US law, the petitioners play an active and privileged role in the procedure leading to
the decision whether to accept an undertaking.  Furthermore, the US authorities have stated that the
petitioner’s opposition is something to which they accord “considerable weight” when assessing
whether to accept an undertaking.
29. Under the Byrd Amendment, the US authorities provide a financial incentive to the
petitioners for opposing the acceptance of undertakings. The US authorities then rely upon such
opposition in order to decide whether to accept an undertaking.
30. Following the adoption of the Byrd Amendment, the petitioners are likely to object
systematically to any undertakings offered by the exporters, not because they consider them less
effective than the imposition of duties, but rather because they have a vested financial interest in the
imposition of duties.
31. Against this background, the Norwegian Government supports the conclusion of the
European Communities and others that the Byrd Amendment is incompatible with the obligation of
the US authorities to conduct an objective examination of whether the acceptance of an undertaking
would be “appropriate”; and it undermines the object and purpose of those two provisions, which is to
provide an alternative remedy to the imposition of  dut ies.  As such it is inconsistent with Articles 8.1
and 8.3 of the Anti-Dumping Agreement and with Articles 18.1 and 18.3 of the SCM Agreement.
                                                     
6  “Amendments to the Anti-Dumping Code,” Subm ission by the Nordic Countries, Section V(a),
MTN.GNG/NG8/W/64 (22 December 1989)WT/DS217/R
WT/DS234/R
Page A-32
V. The offsets under Byrd Amendment constitute subsidies which nullify or impair benefits
accruing to other WTO Members under the WTO rules.
32. It is clear that the offsets to be distributed under the Byrd Amendment constitute a subsidy as
defined in Article 1 of the SCM Agreement, which is  ”specific” within the meaning of Article 2 of the
SCM Agreement, and thus actionable under Article 5 of the same agreement once the conditions of
Article 5 are fulfilled.  In this respect Norway associates itself with the first written submission of
Mexico.
33. Norway, furthermore, supports the arguments made by Mexico that the wording ”through the
use of” [a subsidy] in Article 5 of the SCM Agreement must encompass all subsidies that are ”granted
or maintained”, meaning that a WTO Member under su ch conditions is entitled to invoke the remedy
mechanism in Article 7 of the SCM Agreement to a violation of Article 5 of the same Agreement.
34. The question under Article 5 is whether such subsidy (the offsets to be distributed under the
Byrd Amendment) causes ”adverse effects to the interests of other Members” in any of the three ways
listed in Article 5, letters (a) through (c).  Bearing in mind that the present case is a ”legislative
complaint”, and not directed at a concrete subsidization, Norway, like Mexico, believes that the
subsidization should be evaluated against the criteria of Article 5 (b).
35. Article 5 (b) of the SCM Agreement refers to nullification or impairment of benefits accruing
directly or indirectly to Members under GATT 1994, in particular benefits of concessions bound
under Article II of GATT 1994.  The relevant provisions of GATT 1994 include the violation and the
non-violation nullification or impair ment provisions of Article XXIII.
36. Norway, like Mexico, believes that  it is highly likely that the majority of the products
affected by the Byrd Amendment will be products subject to customs duties bound by the US WTO
tariff concessions.  Consequently nullification or impairment of tariff concessions caused by this
subsidy, can be presumed.  Additionally other GAT T obligations, as listed by Mexico, may also be
violated.
37. It may be argued that the nullification or impairment of tariff concessions caused by this
subsidy is not a concrete violation of Article II of the GATT 1994, but must be evaluated as a ”non-
violation nullification or impairment” and thus su bject to GATT Article XIII(1)(b) and jurisprudence
related to this provision.  However, to the extent that Article 5(b) of the SCM Agreement incorporates
non-violation nullification or impairment under Articl e XXIII of  the GATT 1994, it  transforms such
non-violation nullification or impairment caused ”thr ough the use of any subsidy” into a  violation of
Article 5(1)(b) of the SCM Agreement. Consequently there is no need to enter into a discussion of
non-violation nullification or impairment base d on GATT Article XXIII(1)(b) or DSU Article 26.
38. The nullification or impairment caused by the subsidies in question is systematic and direct.
The subsidies under the Byrd Amendment must be distributed to producers of like products whocompete directly with foreign exports of such products, giving these national producers an added
competitive advantage to the detriment of foreign exporters.  To the foreign exporters this subsidy
will function in a similar way as an extra tariff, aggravating the relative competitiveness of their
products over and beyond what could be expected from the tariff concession and possible anti-
dumping and countervailing duties.
39. Accordingly, based on the facts of this case, the granting or maintaining of subsidies by the
US Government under the Byrd Amendment causes nullification and impairment through the use of
subsidies in violation of Article 5(b) of the SCM Agreement.WT/DS217/R
WT/DS234/R
Page A-33
VI. For the above reasons, the offset paymen ts under the Byrd Amendment result in an
“unreasonable” and “partial” administration of the US laws and regulations on the
initiation of anti-dumping and countervailing duty investigations and the acceptance of
undertakings, which is inconsistent with Article X:3(a) of the GATT
40. Article X:3(a) of the GATT states that each contracting party shall administer in a uniform,
impartial and reasonable manner all its laws, regulations, decisions and rulings of the kind described
in paragraph 1 of this Article.
41. The Byrd Amendment leads to an « unreasonable » administration of the US laws and
regulations concerning the initiation of investigations of alleged dumping or subsidies, because itprovides a strong financial incentive to file or support applications which will increase the number of
investigations initiated by the US authoritie s. The offset payments result in the «partial»
administration of the US laws and regulations concerning the initiation of investigations because they
increase artificially the level of support for the applications. This favours certain parties (those
domestic producers who support the adoption of measures) at the expense of other interested parties(including the foreign exporters, but also th e domestic producers who oppose the initiation).
42. The Byrd Amendment also leads to an «unreasonable» administration of the US laws and
regulations concerning undertakings as alternative to anti-dumping or countervailing duties. In order
to receive the offset payments, the petitioners will oppose systematically any undertakings offered bythe foreign exporters, regardless of whether such undertakings provide an appropriate remedy against
the injuries caused by dumping or subsidisation. Together with the US policy of according
«considerable» weight to the petitioners’ opposition, this will render more difficult, if not impossible,
the acceptance of undertakings. Thus, foreign exporters will be deprived of an alternative, more
beneficial, remedy for no other reason than the interest of the domestic producer in securing awindfall financial gain.
43. The offset payments also lead to a «partial» administration of the US laws and regulations
concerning undertakings because, as a result, the exporters’ interest in obtaining an alternative remedy
in lieu of the imposition of duties is subordinated to the pecuniary interest of the domestic producers.
44.  Against this background, the United States acts inconsistently with Article X:3(a) of
GATT 1994 because the Byrd Amendment prevents the administration of US anti-dumping and
countervailing duty law in a reasonable, impartial and uniform manner.
VII. By enacting the Byrd Amendment, the United  States is in breach of the obligation of all
Members to ensure that its laws, regulati ons and administrative procedures are in
conformity with the provisions of the General Agreement on Tariffs and Trade 1994
(the “GATT”), the Agreement on Implementa tion of Article VI of GATT 1994 (the
“Anti-Dumping Agreement”) the Agreement on Subsidies and Countervailing Measures
(the “SCM Agreement”), and the Marrakes h Agreement establishing the World Trade
Organization (the “WTO Agreement”) :
45. Article 18.4 of the Anti-Dumping Agreement and Article 32.5 of the SCM Agreement (both
with identical wording) provide that Each Memb er shall  ensure the conformity of its laws,
regulations and administrative procedures with the provisions of this Agreement.
46. Thus, by being inconsistent with Articles 18.1, 5.4, 8.1 and 8.3 of the Anti-Dumping
Agreement and with Articles 32.1, 11.4, 18.1  and 18.3 of the SCM Agreement, the Byrd Amendment
is also inconsistent with Article 18.4 of the Anti-Dumping Agreement and with Article 32.5 of the
SCM Agreement, respectively.WT/DS217/R
WT/DS234/R
Page A-34
47. Similarly, Article XVI:4 of the WTO Agreement states that Each Member shall ensure the
conformity of its laws, regulations and administrative procedures with its obligations as provided in
the annexed Agreements.
48. The United States, as a result of its violation of the Anti-Dumping Agreement, the SCM
Agreement and the GATT, is also violating its general obligation under Article XVI of the Agreement
Establishing the WTO (“the WTO Agreement”), Article 18.4 of the Anti-Dumping Agreement and
Article 32.5 of the SCM Agreement to ensure the conformity of its laws, regulations and
administrative procedures with its obligations under the covered agreements.
VIII. Conclusion
For the reasons stated in this submission, Norway respectfully requests the Panel to find that
the Continued Dumping and Subsidy Offset Act of 2000, also known as the Byrd Amendment, is
inconsistent with the obligations of the United States under
- Article 18.1 of the Anti-Dumping Agreement and Article 32.1 of the SCM
Agreement;
- Article 5.4 of the Anti-Dumping Agreement and Article 11.4 of the SCM
Agreement;
       -  Articles 8.1 and 8.3 of the Anti-Dumping Agreement and Articles 18.1 and 18.3 of
the SCM Agreement;
-  Article 5(b) of the SCM Agreement
 -  Article X:3(a) of the GATT;
- Article 18.4 of the Anti-Dumping Agreement and Article 32.5 of the SCM
Agreement;  and
- Article XVI:4 of the WTO Agreement.Finally, Norway respectfully requests the Panel to recommend that the United States bring the
Act into conformity with the corresponding covered agreements.  Furthermore, and pursuant to
Articles 3.7 and 19.1, second sentence, of the DSU, Norway requests that the Panel suggest the
withdrawal of the inconsistent Act as the only pos sible way for the United States to implement the
recommendations.  It is the main features and the basic rationale of the Byrd Amendment that violate
the cited provisions.  Therefore, as stated by Japan and Chile, only by actually repealing the Byrd
Amendment could the United States bring it into c onformity with the covered agreements and comply
with the recommendations.WT/DS217/R
WT/DS234/R
Page A-35
ANNEX A-7
THIRD PARTY ORAL STATEMENT OF NORWAY
(6 February 2002)
Chairman, Members of the Panel,
I would like to thank you for this opportunity to present the Norwegian views in the case at
hand. With reference to our written third party submission dated 17 January 2002, I will focus on the
following:
I.  First:  Norway submits that the Byrd Amendment constitutes mandatory, non-
discretionary legislation that is actionable under the WTO rules
1.  As pointed out in our submission, no discretion is accorded under the Byrd Amendment to the
US authorities with regard to their distribution of offsets. Norway thus agrees with Japan and Chile
that it falls within the authority and mandate of the Panel to review the consistency of the Byrd
Amendment as such with the WTO agreements referred  to in the requests for the establishment of the
Panel.
II.  Second:  Norway submits that the Byrd Amendment is inconsistent with Article 18.1 of
the Anti-Dumping Agreement and with Article 32.1 of the SCM Agreement because the
offset payments it mandates, constitute specific action against dumping and
subsidisation which is not in accordance with the provisions of the GATT (as interpreted
by the Anti-Dumping Agreement and the SCM Agreement).
2.  Reference is made to the reasoning by the European Communities, India, Indonesia and
Thailand  demonstrating that, as such, the Byrd Amendment mandates a specific action against
dumping and subsidisation.
3.  In the case the United States – Anti-dumping Act of 1916  the Appellate Body concluded that
in response to injurious dumping a Member’s actions were limited to definitive anti-dumping duties,
provisional  measures and/or price undertakings.1
4.  A Member’s actions  with respect to subsidie s as spelled out in Articles VI and XVI of the
GATT 1994, are similarly limited to(1) “countervailing measures” imposed in accordance with Part V
of the SCM Agreement,  (2) “countermeasures” agai nst a “prohibited subsidy” imposed in accordance
with Part II of the SCM Agreement, or (3) «count ermeasures» against subsidies that cause «adverse
effects» to the interests of the Member concerned, according to Articles 4 and 7 of the SCM
Agreement.
5.  The “specific measures” available to Members to meet dumping or subsidisation are thus
limited to the abovementioned measures. If  a Member would like to see new measures added, or
change the said measures, such proposals for amendments of the WTO provisions will have to be
negotiated within the WTO.
                                                     
1 United States - 1916 Act, Appellate Body Report WT/DS136/AB/R, para. 137.WT/DS217/R
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6.  In support of this, the United States itself has argued that limits exist with respect to the
actions a Member may take in response to unfair trade practices. And I quote form the report of the
panel in the case the United States - Anti-Dumping Duties of Salmon from Norway:
“Regarding the negotiating history of the General Agreement; the United States also
observed that injurious dumping had been viewed with such concern during the
original GATT negotiations that proposals had been considered to permit tougher
countermeasures than merely offsetting duties. However, in the end Article VI
remedy had been limited to such duties»2
7.  Reference should  also be  made to the legislative history of the Byrd Amendment, which
clearly demonstrates that the Byrd Amendment was aimed at creating an additional specific measureas a response to foreign dumping and subsidisation - by hitting twice at foreign exporters and thereby
providing double protection to the US domestic industry.
8.  In this respect, reference is made to paragraph 14 of Norway's written submission as well as
to parallel descriptions in the submissions of Canada, Japan, Mexico, the European Communities andothers.
III. Third:  Norway submits that the Byrd Amendment prevents the United States from
making decisions in accordance with Articl e 5.4 of the Anti-Dumping Agreement and
Article 11.4 of the SCM Agreement, on wheth er the application for an initiation of an
anti-dumping or anti-subsidy investigation has been made «by or on behalf of the
domestic industry»:
9.  The Anti-Dumping Agreement as well as the SCM Agreement stipulate that, except in
“special circumstances”, the authorities of the importing Member shall not initiate an anti-dumping orcountervailing duty investigation unless they have received a written application made “by or on
behalf of the domestic industry”.
10.  According to the abovementioned articles such investigations cannot be initiated “unless the
authorities have determined, on the basis of an examination of the degree of support... that the
application has been made by the domestic industry”.
11.  The Byrd Amendment, by mandating offset payments to «the affected domestic producers»
provides a strong  financial incentive to domestic producers to file applications for the imposition of
anti-dumping or countervailing measures, or to support such applications made by other domestic
producers.  The Byrd Amendment thus creates a powerful incentive for companies to bring or support
petitions without merit.
12.  Producers that oppose or do not support the petition, are not eligible for offsets and risk being
put at a financial disadvantage vis-à-vis domestic competitors supporting the application.
13.  A domestic producer cannot be considered to have made an “application”, or to “support” it,
within the meaning of Article 5.4 of the Anti-Dumping Agreement or Article 11.4 of the SCM
Agreement, if he does so in order to qualify for the offset payments provided under the Byrd
Amendment.
                                                     
2 Imposition of Anti-Dumping Duties on Imports of Fresh and Chilled Atlantic Salmon from Norway,
ADP/87.  Report of the Panel adopted on 27 April 1992, BISD 41S/229, para. 75.WT/DS217/R
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14.  The Byrd Amendment prevents the US authorities from conducting an objective examination
of whether an application is made «by or on behalf of the domestic industry» as required by
Article 5.4 of the Anti-Dumping Agreemen t and Article 11.4 of the SCM Agreement.
15.  During the Uruguay Round negotiating history of the said provisions many delegations,
including the Nordic countries, expressed their view:
«that the investigating authority is obliged to verify that the petitioners satisfy the
‘major proportion requirement’ … before initiating an investigation...... in order to
prevent unfounded investigations.»3
16.  The Byrd Amendment, by making possible, and even encouraging, the initiation of
investigations in cases where the domestic industry has no genuine interest in the adoption of such
measures, also leads to unnecessary burdens for foreign exporters because of such unfounded
examinations. If maintained, the Byrd Amendment would thereby alter, in favour of the US, the
balance of Members rights and obligations under the Anti-Dumping Agreement and the SCM
Agreement.
IV. Fourth: It is Norway’s view that the Byrd Amendment is inconsistent with the
undertakings provisions of Articles 8.1 and 8.3 of the Anti-Dumping Agreement and
Articles 18.1 and 18.3 of the SCM Agreement, by making it more difficult to get the US
authorities to accept undertakings
17.  As pointed out by Norway and other Members, under US law, the petitioners play an active
and privileged role in the procedure leading up to the decision whether to accept an undertaking.
Furthermore, the US authorities have stated that the petitioner’s opposition is something to which they
accord “considerable weight” when assessing whether to accept an undertaking.
18.  Under the Byrd Amendment, the US auth orities provide a financial incentive to the
petitioners for opposing the acceptance of undertakings. The US authorities then rely upon such
opposition in order to decide whether to accept an undertaking.
19.  Following the adoption of the Byrd Amendment, the petitioners are likely to object
systematically to any undertakings offered by the exporters, not because they consider them lesseffective than the imposition of duties, but rather because they have a vested financial interest in the
imposition of duties.
20.  Against this background, the Norwegian Government supports the conclusion of the
European Communities and others that the Byrd Amendment is incompatible with the obligation ofthe US authorities to conduct an objective examination of whether the acceptance of an undertaking
would be “appropriate”. And it undermines the object and purpose of Article 8.1 of the Anti-dumping
Agreement and Article 18.1 of the SCM Agreement, which is to provide an alternative remedy to the
imposition of  duties.
V. Fifth: Norway submits is that the offsets under the Byrd Amendment constitute
subsidies which nullify or impair benefits accruing to other WTO Members under the
WTO rules.
21.  Norway supports the arguments made by Mexico that the offsets to be distributed under the
Byrd Amendment constitute a subsidy as defined in Article 1 of the SCM Agreement, which is
                                                     
3 “Amendments to the Anti-dumping Code”, submission by the Nordic Countries; Section V (a),
MTN.GNG/NG8/W/64 (22 December 1989)WT/DS217/R
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”specific” within the meaning of Article 2 and thus actionable under Article 5 of the same agreement;
once the conditions of Article 5 are fulfilled.
22.  Furthermore, the wording ”through the use of” [a subsidy] in Article 5 of the SCM
Agreement must encompass all subsidies that are ”granted or maintained”, meaning that a WTO
Member under such conditions is entitled to invoke the remedy mechanism in Article 7 of the SCM
Agreement to a violation of Article 5 of the same Agreement.
23.  The question under Article 5 is whether such subsidy  causes ”adverse effects to the interests
of other Members” in any of the three ways listed in Article 5, letters (a) through (c).  Bearing in mind
that the present case is a ”legislative complaint”, and not directed at a concrete subsidization, Norway,believes that the subsidization should be evaluated against the criteria of Article 5 (b).
24.  This provision refers to nullification or impairment of benefits accruing, directly or indirectly,
to Members under GATT 1994, in particular benefits of concessions bound under Article II of GATT
1994.  The relevant provisions of GATT 1994 includ e the violation and the non-violation nullification
or impairment provisions of Article XXIII.
25.  Norway, like Mexico, believes that it is highly likely that the majority of the products affected
by the Byrd Amendment will be products subject to customs duties bound by the US WTO tariff
concessions.  Consequently nullification or impairment of tariff concessions caused by this subsidy,can be presumed.
26.  The nullification or impairment caused by the subsidies in question is systematic and direct.
The subsidies under the Byrd Amendment must be distributed to producers of like products who
compete directly with foreign exports of such products, giving these national producers an addedcompetitive advantage to the detriment of foreign exporters.  This subsidy will function in a similar
way as an extra tariff, aggravating the relative competitiveness of their products over and beyond
what could be expected from the tariff conce ssion and possible anti-dumping and countervailing
duties.
VI. For the above reasons, Norway also maintains that the offset payments under the Byrd
Amendment result in an “unreasonable” and “partial” administration of the US lawsand regulations on the initiation of anti-dumping and countervailing duty investigations
and the acceptance of undertakings, which is inconsistent with Article X:3(a) of the
GATT
27.  At this point I refer to our written submission para 40 through 44 supporting what has been
stated by the European Communities and other Members in this respect.
VII. Finally, Norway submits that by enacting the Byrd Amendment, the United States is in
breach of the obligation of all Members to ensure that its laws, regulations and
administrative procedures are in conformity with the provisions of  the “GATT”, the“Anti-Dumping Agreement”, the Agreement on Subsidies and Countervailing Measures,
and the “WTO Agreement”:
28.  In this respect, I refer to Norway’s written submission para 45 through 48.WT/DS217/R
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29.  In concluding, Norway maintains its position as stated in its written submission, and
respectfully requests the panel to take this into consideration and to recommend that the United States
brings its legislation into conformity with the WTO rules.
Thank you so much for your attention and for your patience.
__________