WORLD TRADE  
ORGANIZATION  TN/RL/GEN/60 
12 July 2005 
 
 (05-3077) 
Negotiating Group on Rules Original:   English 
  
 
 
INFORMAL PAPER ON ANTI-DUMPING AND SUBSIDIES AGREEMENTS 
 
Paper from South Africa
 
 
 
 The following communication, dated 7 July 2005,  is being circulated at the request of the 
Delegation of South Africa.   The submitting delegation has requested that th is paper, which was submitted to the Rules 
Negotiating Group as an informal document (JOB(05)/ 148), also be circulated as a formal document. 
 
_______________ 
 
  This paper serves as an attempt by South Afri ca to locate itself in the general discussions in 
the rules negotiations.  Some of our views are held by other countries and have been circulated by 
way of position papers in rules meetings and some of  the views are our own. In circulating this paper 
we hope to better understand views expressed by othe r countries and in fact better understand our own 
understanding of some of the positions posed before the secretariat issues the draft text.  We hope this 
paper will generate some discussion between ourselves and other negotiating members to assist us as 
a collective in reaching common positions on these issues. 
  The friends of anti dumping have circulated sev eral papers on the question of material injury 
and as South Africa we would like to state that we be lieve this is an area in need of some reform.  
More specifically in terms of the wording proposed  on determination of mate rial injury.  We support 
this proposal by the friends of anti-dumping. 
 
FANS PROPOSAL
 
 
1. Overarching framework of determination of mat erial injury caused by dumped imports   
 Amend Article 3 in order to clarify that, where the authorities examine whether dumped 
imports cause material injury, 
 
• A determination of material injury shall be based upon determinations of (1) whether the 
domestic industry in the importing country is e xperiencing material injury, and (2) if the 
domestic industry is experiencing material injury, whether the dumped imports under 
investigation are causing material injury. 
 
2. Definition of material injury 
 Amend footnote 9 in order to clarify the definition of material injury, 
 TN/RL/GEN/60 
Page 2  
 
 • The term ‘material injury to a domestic industry’ means the state of the domestic industry as 
demonstrated by an important and measurable  deterioration in the operating performance of 
the domestic industry, based on an overall asse ssment of all relevant economic factors and 
indices having a bearing on the state of the domestic industry including those enumerated in Article 3.4. 
 
3. Causation 
 Amend the first sentence of Article 3.5 as follows: 
• It must be demonstrated that the dumped imports  in and of themselves are, through the effects 
of dumping, as set forth in paragraph 2 and 4,  causing injury within the meaning of this 
agreement. 
 The negligibility test
 
 
 Article 5.8 of the Anti-Dumping Agreement provi des that imports shall normally regarded to 
be negligible if the imports from a particular count ry constitute less than 3 per cent of total imports 
into the importing country.1 
  It is proposed that the provision be changed to re flect a market penetration test, rather that an 
imports as a percentage of total imports-test.  Th e European Union Basic Regulation provides that 
imports shall be regarded as negligible if imports  from a particular country represent less than 1 per 
cent of the European market for the like product.  
 
 The European Union approach is preferred as it creates more certainty in the market.  It is 
very difficult to control exports to the extent th at it should represent less than 3 per cent of total 
imports into a foreign market, as it cannot be antic ipated what other countries will export to that 
market.  South African exporters are often include d in anti-dumping investigations where its export 
volume to that country had remained stable, but exports to that country by other countries had 
decreased.  Exporters can, however, obtain information on the size of the market they are exporting to 
and can ensure that their exports do not exceed  the 1 per cent of the market threshold. 
  It is important that reference be clearly made to  the total size of the market, rather than only to 
the size of the market, as both the EU and the US ofte n considers the impact of imports on the “free” 
market only, i.e. sales to the “captured” market  (sales to related buyers) are excluded from the 
analysis.  However, when an exporter exports its pr oduct to a related (“captured market”) buyer, such 
export sales are not excluded from the analysis.  
Proposal
 
 
 It is proposed that the relevant sentence of  Article 5.8 be amended to read as follows: 
                                                      
 1 Art 5.8 reads as follows:  
 “An application under paragraph 1 shal l be rejected and an investigation shall be terminated promptly as 
soon as the authorities concerned are satisfied that there is not sufficient evidence of either dumping or of 
injury to justify proceeding with the case.  There shall be immediate termination in cases where the authorities determine that the margin of dumping is de minimis , or that the volume of dumped imports, 
actual or potential, or the injury, is negligible.  The margin of dumping shall be considered to be de minimis  
if this margin is less than 2 per cent, expressed as a percentage of the export price.  The volume of dumped 
imports shall normally be regarded as negligible if the volume of dumped imports from a particular country 
is found to account for less than 3 per cent of impor ts of the like product in the importing Member, unless 
countries which indivi dually account for less than 3 per cent of  the imports of the like product in the 
importing Member collectively account for more than 7 per cent of imports of the like product in the 
importing Member.”  TN/RL/GEN/60 
 Page 3 
 
 
 “The volume of dumped imports shall normally  be regarded as negligible if the 
volume of dumped imports from a particular country is found to account for less than 1 per cent of the total market
2 for the like product in the importing Member. 
 The same principle should apply to Artic le 15.3 of the Subsidies and Countervailing 
Measures Agreement. 
 
Cumulation  
 
 Article 5.8 of the Anti-Dumping Agreement provides that where imports from one country 
represents less than 3 per cent of total imports in to the importing country, such imports may be 
cumulated with imports from other countries each representing less than 3 per cent of total imports, 
provided the combined imports from those countries represent more than 7 per cent of total imports into the importing country.
3 
 
Proposal  
  It is proposed that no cumulation take place for countries that do not individually meet the 
1 per centmarket penetration criterion indicated supra.   The same amendment should be added to Ar ticle 15.3 of the Subsidies and Countervailing 
Measures Agreement. 
 
Lesser duty rule
 
  Article 9.1 of the Anti-Dumping Agreement pr ovides that it is desirable that any anti-
dumping duty be smaller than the margin of dumpi ng where such smaller duty will be sufficient to 
remove the injury caused by such dumping.
4 
  Article VI of the GATT 1994 does not condemn  dumping, but merely provides that action 
may be taken against dumping causing injury. Artic le 11.1 of the Anti-Dumping Agreement provides 
that an anti-dumping duty should only be imposed to the extent necessary to counteract injurious 
dumping.
5  The purpose of an anti-dumping duty, therefore, is to remove the injurious effect of 
dumping.  By imposing the full margin of dumping re gardless of the margin of injury, is against the 
spirit of the Anti-Dumping Agreement.  Proposal
 
 
 It is therefore proposed that the relevant part  of Article 9.1 be amended to read as follows: 
 
                                                      
2 It is understood that where the market is divided into two or more competitive markets under 
paragraph 1(ii) of Article 4, the “total market” will re late only to the total competitive market under review. 
3 See Art 5.8, quoted in note 1. 
 4 Article 9.1 reads as follows: 
 “The decision whether or not to impose an anti-dumping duty in cases where all requirements for the 
imposition have been fulfilled, and the decision whether the amount of the anti-dumping duty to be 
imposed shall be the full margin of dumping or less, are decisions to be made by the authorities of the 
importing Member.  It is desirable that the imposition be permissive in the territory of all Members, and that the duty be less than the margin if such lesser duty would be adequate to remove the injury to the 
domestic industry.” 
 
5 Article 11.1 reads as follows: 
 “An anti-dumping duty shall remain in force only as long as and to the extent  necessary to counteract 
dumping which is causing injury.” TN/RL/GEN/60 
Page 4  
 
 “It is desirable that the imposition be permissive in the territory of all Members. 
Where importers and exporters have c ooperated with the authorities in its 
investigation the duty shall be less than the margin if such lesser duty would be 
adequate to remove the injury to the domestic industry.” 
It is further proposed that the lesser duty ru le must be applied on a mandatory basis. 
 
 Further that the lesser duty rule be applicab le in the Subsidies and Countervailing Measures 
Agreement.  
SALES BELOW COST 
 
 Article 2.2.1 of the Anti-Dumping Agreemen t provides that where sales in the domestic 
market of the exporter were made at less than co st, such sales may be disregarded if such sales 
represent more than 20 per cent of the total sales under consideration. 
 
Proposal
 
 
 It is proposed that the figure of 20 per cent be increased to at least 30 per cent, as the 
disregard of these sales, which may still be made in the ordinary course of trade, has the effect of 
increasing the margin of dumping substantially. 
 
Treatment of developing countries  
 
 Article 15 of the Anti-Dumping Agreement pr ovides that developed countries should give 
special regard to developing countries in anti-dumping investigations.6 
 
Proposal 
 
 It is proposed that the provision be amended to contain the following Special and Differential 
treatment requirements 
 
(a) the use of facts available in the absence of  a detailed and full response by an exporter in a 
developing country; 
(b) the automatic increase in the de minimis  margin of dumping; 
(c) the automatic increase in the ne gligible volume of imports; 
(d) the automatic lapse of anti-dumping duties after 5 years. 
 
It is proposed that such special and differen tial treatment be included in the Subsidies and 
Countervailing Measures Agreement. 
 
Duration of provisional payments in countervailing investigations  
 
 Article 17.4 of the Subsidies and Count ervailing Measures Agreement provides that 
provisional payments shall remain in force for a period not exceeding 4 months.7  Article 7.4 of the 
                                                      
 6 Article 15 reads as follows: 
 “It is recognized that 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.” 
 
7 Article 17.4 reads as follows: 
 “The application of provisional m easures shall be limited to as shor t a period as possible, not exceeding 
four months.”  TN/RL/GEN/60 
 Page 5 
 
 
 Anti-Dumping Agreement provides that provisional pa yments may be imposed for a period of up to 
9 months under certain conditions.  
Proposal 
 
 It is proposed that the wording of Article 17.4 of the Subsidies and Countervailing Measures 
Agreement be brought in line with similar pr ovision in the Anti-Dumping Agreement and that 
Article 17.4 should therefore read as follows:  
“The application of provisional measures shall be limited to as short a period as 
possible, not exceeding four months or, on  decision of the authorities concerned, 
upon request by exporters representing a significant percentage of the trade involved, to a period not exceeding six months.  When authorities, in the course of an investigation, examine whether a duty lower than the margin of subsidy would be sufficient to remove injury, these periods ma y be six and nine months, respectively.” 
Deadline for new shipper reviews
 
 
 Article 9.5 of the Anti-Dumping Agreement provides for the expedited review of an anti-dumping duty in cases where an exporter not party to the original investigation subsequently wishes to export to the importing country.
8 
 
 Article 5.10 provides that anti-dumping investig ations shall normally be concluded in 12 
months, while no investigation shall take longe r than 18 months to complete. Additionally, 
Article 11.4 indicates that reviews shall normally be completed within 12 months from initiation. 
 
 Article 9.5 contains no time frame for the completion of a new shipper review, despite 
indicating that such a review shall be conducted on an accelerated basis.   
Proposal 
 
 It is proposed that the relevant portion of  the Article be amended to read as follows: 
 
“Such a review shall be initiated and carried  out on an accelerated basis, compared to 
normal duty assessment and review proceedings in the importing Member and shall be completed within no more than 12 months.”  
                                                     
 
 8 Article 9.5 reads as follows: 
 “If a product is subject to anti-dumping duties in an importing Member, the authorities shall promptly carry 
out a review for the purpose of determining individual margins of dumping for any exporters or producers 
in the exporting country in question who have not exported the product to the importing Member during the period of investigation, provided that these exporters or producers can show that they are not related to 
any of the exporters or producers in the exporting country who are subject to the anti-dumping duties on 
the product.  Such a review shall be initiated and car ried out on an accelerated basis, compared to normal 
duty assessment and review proceedings in the importing Member.  No anti-dumping duties shall be levied 
on imports from such exporters or producers while the review is being carried out.  The authorities may, 
however, withhold appraisement and/or request guarantees to ensure that, should such a review result in a determination of dumping in respect of such producers or exporters, anti-dumping duties can be levied 
retroactively to the date of the initiation of the review.” TN/RL/GEN/60 
Page 6  
 
 Deadline for other reviews
 
 
 Article 11.4 of the Anti-Dumping Agreement provides reviews shall normally be concluded 
within 12 months after initiation.  This is in line with the provision in Article 5.10 that investigations 
shall normally be concluded within  12 months. However, Article 5.10 continues to indicate that all 
investigations shall be concluded within 18 months  after initiation.  No such provision exists in 
Article 11.4.   
Proposal 
 
 It is proposed that Article 11.4 be linked to  Article 5.10 and that Article 11.4 should be 
amended to read as follows:  
“The provisions of Article 6 regarding ev idence and procedure shall apply to any 
review carried out under this Article.  Any such review shall be carried out 
expeditiously and shall normally be conc luded within 12 months of the date of 
initiation of the review, but in no case longer than 18 months.” 
Duration of AD duties
 
  We support proposals that Anti dumping duties should terminate after five years and that 
sunset reviews should constitute a full new investigation.  
Material retardation
 
  Article VI talks about materially retardin g the establishment of a domestic industry. 
  Footnote 9 of art 3 of the ADA talks of the ma terial retardation of the establishment of such 
an industry.
9 
 
 No further assistance is given in establis hing what circumstances would constitute such 
material retardation.   We agree with Egyptian proposal that the ag reement needs a better definition for material 
retardation as the present definition is va gue enough to be used inappropriately. 
 
__________ 
 
  
                                                     
 
9 Footnote9 of article 3 reads as follows: 
under this agreement the term “injury” shall unless otherwise specified, be taken to mean material 
injury to a domestic industry, threat of material injury to a domestic industry or material retardation of the 
establishment of such an industry an d shall be interpreted in accordance wi th the provisions of this article