WORLD TRADE  
ORGANIZATION  TN/RL/GEN/31 
8 February 2005 
 
 (05-0521) 
Negotiating Group on Rules Original:   English 
  
 
PROPOSAL ON NEGLIGIBLE IMPORTS 
 
Paper from Chile;  Colombia;  Costa Rica;  Hong Kong, China;  Israel;  Japan;
 
Korea, Rep. of;  Norway;  Singapore;  Switzerla nd;  the Separate Customs Territory of Taiwan, 
Penghu, Kinmen and Matsu;  Thailand;  and Turkey  
 
  The following communication, dated 2 February 20 05, is being circulated at the request of the 
Delegations of Chile;  Colombia;  Costa Rica;  Hong K ong, China;  Israel;  Japan;  Korea, Rep. of;  
Norway;  Singapore;  Switzerland;  the Separate  Customs Territory of Taiwan, Penghu, Kinmen and 
Matsu;  Thailand;  and Turkey 
  The submitting delegations have requested that this paper, which was submitted to the Rules 
Negotiating Group as an informal document (JOB(05)/11), also be circulated as a formal document.  
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Description of the Problem: 
 
 Article 5.8 provides for mandatory terminati on of an investigation in case dumped imports 
from a particular country are less than 3% of to tal imports and dumped imports from all negligible 
sources combined do not exceed 7% of total imports.  Where a country is determined to be negligible, 
the investigation is terminated and no antidumpi ng measures are applied.  The problem with the 
current provision is that the threshold of neglig ibility bears no relationship to the production and 
shipments of the allegedly damaged producers in the importing country.
1 
 
 The objective of the “negligible imports” excepti on is to exclude import sources that are too 
small to have a significant adverse impact on the industry in the importing country.  The current test, based on dumped imports’ share of total imports
, does not measure the imports’ impact on the 
domestic industry.  In contrast, the dumpe d imports’ share of the domestic market  (or of the domestic 
industry’s production/shipments in the domestic mark et) is a relevant indicator of their impact. 
 
 For example, assume that total imports of a product (from all sources) only account for 10% of domestic consumption in the importing country.  In  such a case, imports from an individual country 
under investigation would have to represent less than  0.3% of domestic consumption in order to be 
negligible.  Moreover, imports from such “neg ligible” countries could still be included in the 
investigation if they totalled more than 0.7% of domestic consumption.  These are clearly such trivial 
quantities that involving them in investigations is absurd.   
                                                     
 
 1 Another problem with the current negligibility test is that it encourages industries requesting 
antidumping relief to include as many small sources as possible, regardless of their individual impact on the 
industry in the importing country, merely to ensure that the collective 7% threshold is met.  In effect, this allows requesting industries to shut import sources out of the market before they have even gained a foothold in the 
market.  We are willing to discuss further on appropriate ways to address this problem. TN/RL/GEN/31 
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 Additionally, Article 5.8 provides no guidance as to the time period over which authorities should measure negligibility.  This should be clarif ied, both to provide authorities with guidance, and 
to avoid authorities’ choosing the time period on an ad hoc  and results-oriented basis.   
 Elements of a Solution: 
 
1. Modify the Basis for Determining Negligibility 
 
Proposal: 
 
 Amend Article 5.8 to provide that the denominator of the threshold for determining whether the volume of dumped imports will be considered to  be negligible should be changed to “total 
domestic consumption of the like product and th e product under investigation in the importing 
country”. 
 
 Note:  We will further elaborate on the appropria te level of the threshold, giving particular 
consideration to the developmental needs of deve loping countries, particular ly LDCs, whose exports 
are particularly vulnerable to the imposition of AD measures by other Members.  
Explanation: 
 
 Imports can affect to the economic conditi on of the domestic industry only when those 
imports are able to affect the conditions of comp etition in the domestic market.  Imports that cannot 
adversely affect the domestic market must be consid ered negligible and thus outside the scope of anti-
dumping measures.  As such, the relevant measure of  negligibility should be the proportion of the 
dumped imports from a particular c ountry relative to the market potentially affected by them.  It 
should not be the dumped imports’ proportion of tota l imports, because this is irrelevant to the 
imports’ effects on the market and industry of the importing country.  The negligibility threshold 
should, therefore, be based on the ratio of imports from a particular country to the total consumption 
of the like product and the product under investigation in the importing country.    2. Time Period for Determining Negligibility 
 
Proposal: 
 
 Clarify Article 5.8 by providing the time period over which that negligibility must be 
examined, based on the volume of dumped imports relative to the total consumption of the like 
product and the product under investigation in the importing country.  The time period should be the 
period of investigation used by the authoriti es for purposes of the dumping determination. 
 
Explanation: 
  Article 5.8 currently leaves to the discretion of the authorities the period for measuring 
negligibility.  This allows the authorities to c hoose among imports in recent periods and to base the 
determination on those that exceed the negligibilit y threshold.  Our proposal would avoid the 
discretion by the authorities to choose an arbitrary short-term period to get the volume to surpass the 
negligibility standard.   
  TN/RL/GEN/31 
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  The period of investigation used by the aut horities for purposes of the dumping determination  
is appropriate also as the time period of determin ing negligibility, because (a) negligibility is based on 
“dumped imports” from an exporting country and (b) dumping can be determined only with regard to 
the period in which the authorities collect data on dumping.   
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