RESTRICTED
WORLD TRADE G/ADP/AHG/W/10
17September 1997
ORGANIZATION(97-3711)
Original: English Committee onAnti-Dumping Practices
AdHoc Group onImplementation
TIMELINE, CONFIDENTIAL INFORMATION, AND LESSER
DUTY RULE (PARAGRAPH 3OFWTO/AIR/643)
Information Provided byNew Zealand
Thefollowing communication, dated 8September 1997, hasbeen received from thePermanent
Mission ofNew Zealand.
_______________
(A) Atimeline ofwhen various events occur inNew Zealand ’sinvestigative process
Asrequested inDocument WTO/AIR/643 of16July1997 attached isacopy ofthetimeline
ofwhenvariouseventsoccurintheNewZealandinvestigativeprocess.Thetimelinecoverstheelements
ofapplication, initiation, preliminary determination, written submissions from parties, disclosure of
essential facts, final determinations andpublic notices ofdeterminations.G/ADP/AHG/W/10
Page 2
TIMELINE FOR NEW ZEALAND ANTI-DUMPING INVESTIGATIONS
G/ADP/AHG/W/10
Page 3
(B) Adescription ofinformation New Zealand believes isconfidential bynature
Information isconsidered tobeconfidential ifitsdisclosure would belikely:
- Tobeofsignificant competitive advantage toacompetitor, e.g. production costs,
distribution costs, business sales statistics, research/invention data, technical designs
etc.
- Tohave asignificant adverse effect upon theparty who submitted theinformation,
ortheparty from whom theinformation wasacquired bytheparty whosubmitted the
information, e.g.customer andsupplier lists.
- Tohave asignificant adverse effect upon anyparty towhom theinformation relates,
e.g.statistical/market share information.
- Toprejudice thecommercial position ofaperson who supplied orwho isthesubject
oftheinformation, e.g.thenames oftheindividual companies requesting theinitiation
ofaninvestigation, who may besubject tocommercial retaliation bycustomers who
arealsoimporters.
- Toprejudice thesecurity ordefence ofNew Zealand ortheinternational relations of
theGovernment ofNew Zealand.
- Toprejudice theentrusting ofinformation totheGovernment ofNew Zealand.
- Toprejudice thesupply ofsimilar information orinformation from thesame source.
- Todisclose atrade secret.
- Toeffect themaintenance oflegal privilege.
(C) Adescription ofhow thelesser duty ruleisapplied byNew Zealand
New Zealand submits thefollowing description ofhowthelesser duty ruleisapplied inpractice
byitsinvestigating authorities.
Basis forLesser Duty
TheNew Zealand approach totheapplication ofthelesser duty ruleisdefined bysection 14(5)
oftheDumping andCountervailing Duties Act1988, which provides:
Inexercising thediscretion under subsection(4) ofthissection, theMinister
shall have regard tothedesirability ofensuring thattheamount ofanti-dumping or
countervailing duty inrespect ofthose goods isnotgreater thanisnecessary toprevent
thematerial injury orarecurrence ofthematerial injury ortoremove thethreat of
material injury toanindustry orthematerial retardation totheestablishment ofan
industry, asthecase may require.
Thepurpose ofalesser duty, andhence anon-injurious price, istodetermine whether aduty
lessthan themargin ofdumping issufficient toremove thematerial injury orprevent therecurrence
ofmaterial injury caused bythedumping. Thisrequires anassessment oftheextent ofinjury attributable
tothedumping. Inthiscontext, itshould benoted thattheNew Zealand authorities consider thatinjuryG/ADP/AHG/W/10
Page 4
ismaterial ifitismore thanimmaterial andiftheindustry isworse off,i.e.if,asaresult ofthedumping
andthevolume andprice effects attributable tothedumping, there areadverse economic consequences
fortheindustry, interms ofanactual orpotential decline, orother adverse effects, intheinjury factors
andindices identified inArticle 3oftheAgreement.
Removal ofInjury
Indetermining whether ornotthelesser dutyruleshould beapplied, thefirststepistoascertain
thesituation which would apply intheabsence ofthedumping ofthegoods andtheinjury attributable
tothedumping.
Themain impact ofdumping isindicated through price effects andtheconsequent impact on
sales andprofits. Accordingly, initial indications oftheextent ofinjury attributable todumping can
beestablished through (a)themargin ofprice undercutting, or(b)thelevel atwhich theindustry ’s
prices arenon-injurious.
Ifthemargin ofprice undercutting exceeds thelevel ofundercutting thatwould bepresent
ifthegoods were notdumped, then thisprovides prima facie evidence thatalesser duty would not
beappropriate. However, ifthemargin ofprice undercutting islessthanthemargin ofdumping, then
further consideration must begiven totheapplication ofthelesser duty rule.
Thesecond approach istoestablish anon-injurious price, being theprice thatwould apply
intheabsence oftheinjurious dumping. Ideally, such aprice should bebased onmarket considerations,
such astheprices which prevailed before dumping affected themarket. Where such anapproach may
notbeappropriate thenalternative approaches could beused, such asconstructing aprice onthebasis
ofcurrent costs andpre-dumping profit rates, orthecurrent profit rates obtained byindustries producing
goods inthesame general category.
Thelevel ofprofitability isgenerally used asanormative indicator ofinjury, since thatis
considered themost useful indicator ofthehealth ofanindustry, andisthefactor which combines
theeconomic impact ofprice andvolume effects ofthedumped orsubsidised imports, andtheindustry ’s
reaction tothem.
Establishing theLevel ofDuty
Having established thenon-injurious market price, theequivalent dutiable value forthegoods
isestablished. This willnormally involve deducting from thenon-injurious market price those cost
elements between thedutiable value (usually FOB) andthemarket level. Therelevant market level
istaken asthefirst point ofcompetition intheNew Zealand market, i.e.ex-factory fordomestic
producers, andex-importer ’sstore forimported goods, which issimilar tothatnormally used forthe
price undercutting comparison. Thecostelements intheformula tocalculate thedutiable value will
normally include freight costs, importation costs andfees, including transport from wharf toimporter ’s
store, normal duty, anyother costs associated with importation butnotwith distribution, andamargin
fortheimporter.
Theapproach used does notseek tomake judgements about what different businesses regard
asanappropriate level ofprofit oranyprice orprofit “entitlement ”beyond thefactually determined
price orprofit level achieved before theimpact ofdumping, oronanother reasonable andappropriate
basis.
Where prices orprofit levels applying before thedumping occurred areused, theywillnormally
beappropriate only when thepre-dumping situation isfairly recent. Inthecaseofareview, orwhereG/ADP/AHG/W/10
Page 5
there hasbeen asignificant period oftime between thepre-dumping situation andthetime ofthe
investigation orreview, analternative approach may berequired todetermine theappropriate level
ofanon-injurious price.
Application ofLesser Duty Rule
New Zealand hasapplied thelesser dutyruleinonly fourcases, three ofwhich involved closely
related products from thesame country. This reflects thefactthatinmost cases theeconomic position
oftheindustry willbeonly partly ameliorated bytheremoval ofthedumping.