WORLD TRADE  
ORGANIZATION  TN/RL/GEN/76/Rev.1 
21 April 2006 
 
 (06-1863) 
Negotiating Group on Rules Original:   English 
  
 
PRICE UNDERTAKINGS
1 
 
Communication from Hong Kong, China; Mexico; Norway;  
Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu  
 
Revision  
  
 The following communication, dated 20 April 2006,  is being circulated at the request of the 
above delegations. 
 
 The submitting delegations have requested th at this paper, which was submitted to the 
Negotiating Group on Rules as an informal document (JOB(05)/250/Rev.1), also be circulated as a 
formal document. 
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 The co-sponsors of this proposal have benef ited from the discussions at the Negotiating 
Group on Rules of a textual proposal from Mexico on Price Undertakings (TN/RL/GEN/76; JOB(05)/250).  The co-sponsors particularly share the general feeling among the membership that 
price undertakings, if properly used, can effectively serve its purpose as a trade remedy, while at the 
same time providing greater certainty to traders.  However, this form of constructive remedy is 
currently under-utilised.  To enable  greater use of price undertakings, the existing provisions of the 
Anti-dumping Agreement need to be amended to prev ent arbitrary rejection of price undertakings by 
the importing Member.     The proposed amendments contained in this draft build on the Mexican proposal, taking 
account of comments and suggestions by Members at the Negotiating Group.  The major 
changes/additions in this proposal are highlighted below:  - Article 8.2 is amended to provide  for opportunity to offer/accept price undertakings even if no 
affirmative preliminary determination is made, but authorities decide to proceed with the 
investigation.  In such cases, we propose that e xporters should be informed of the right to make 
price undertakings, and be given adequate opport unity (for example, at least 30 days after 
preliminary determination or, where applicable, fina l disclosure under Article 6.9) to make a price 
undertaking offer; 
 
- While acceptance or rejection of a price undertaking will be based on its own merits, the 
transparency element of the proposal is strengt hened by amending Article 8.3 to provide for 
authorities to publish the standard terms and c onditions of a price undertaking, as well as the 
                                                     
 
1 The proposal contained in this document does not represent a final position and may be subject to 
further addition and/or modification in the course of the negotiations.  Other provisions of the Anti-dumping 
Agreement that may be affected by the proposal may be examined in the later stages of the negotiations when 
Members have a more comprehensive picture of the amended Agreement. TN/RL/GEN/76/Rev.1 
Page 2  
 
  general factors normally used for assessing the merits of a price undertaking offer. While making 
clear that a price undertaking may not be rejected on grounds of “policy”, an exception is warranted in the case of a prospective duty assessm ent system based on prospective normal value, 
since the practical effects of price undertakings are similar to a prospective normal value system; 
 
- Article 8.6 is further amended to elaborate on th e revocation of price undertakings.  Given that 
price undertakings can be highly effective in elimin ating dumping, while at the same time provide 
more predictability to traders and are therefor e more trade-friendly th an a duty-based trade 
remedy, the use of price undertakings should be en couraged.  The benefits of this remedy would 
be greatly reduced if price undertakings can  be easily revoked on grounds that are “over-
sensitive”.  We therefore propose that the decision to revoke a price undertaking be exercised with  
special care, and that price undertakings  should not be revoked for minor reasons; 
 - Article 8.7 is added to make clear that an expor ter subject to a price undertaking has the right to 
request an adjustment of the minimum price subject to the undertaking as a result of changed 
circumstances.  TN/RL/GEN/76/Rev.1 
 Page 3 
 
 
  Proposed Amendments to the Anti-Dumping Agreement  
 
(The new text is underlined and the text to be deleted is crossed out) 
 
Article 8 – Price Undertakings 
 
8.1 Proceedings may2 be suspended or terminated without the imposition of provisional measures 
or anti-dumping duties upon receipt of satisfactory voluntary undertakings from any exporter to revise 
its prices or to cease exports to the area in ques tion at dumped prices so that the authorities are 
satisfied that the injurious effect of the dum ping is eliminated.  Price increases under such 
undertakings shall not be higher than necessary to el iminate the margin of dumping determined for the 
said exporter .  It is desirable that the price increases be less than the margin of dumping if such 
increases would be adequate to remove the injury to the domestic industry3.  
 8.2 Price undertakings shall not be sought or accepted from exporters unless the authorities of the 
importing Member have made a preliminary affirm ative determination of dumping and injury caused 
by such dumping, or, if no affirmative preliminary determination is made, and the investigation is not 
otherwise terminated, unless the authorities have made  the final disclosure pursuant to paragraph 9 of 
Article 6 .  The authorities shall inform the exporters of their right to offer price undertakings, as well 
as of the applicable rules and procedures, including relevant time limits, a nd give them adequate 
opportunity (at least [X] days after the affirmative preliminary determination or, in the absence of an 
affirmative preliminary determination, at least [X] da ys after the disclosure pursuant to paragraph 9 of 
Article 6) to make a price undertaking offer4.   
 8.3 Acceptance or rejection of a price undertaking shall be based on its own merits.  Authorities 
shall publish and inform exporters of the standard terms and conditions of th e price undertakings, and 
the general factors normally used to assess the mer its of a price undertaking offer.  Moreover, the 
authorities may not require as a condition for acceptance of a price undertaking that price 
undertakings be offered by or accepted from some or  all other exporters.  Likewise, they may not 
reject an  Uundertakings  offered on grounds  need not be accepted if the authorities consider their 
acceptance impractical, for example, if  that the number of actual or potential exporters is too great, or 
for other reasons, including reasons of general policy , unless the importing Member concerned 
operates a prospective duty assessment system wher eby anti-dumping duty is assessed at entry by 
reference to a prospective normal value .  Should the case arise and where practicable, t The authorities 
shall provide to the exporter the reasons which have led them to consider acceptance of an 
undertaking as inappropriate, and shall to the extent possible,  give the exporter an opportunity to 
make comments thereon and to reformulate its proposal . 
 
8.4 If an undertaking is accepted, the investigati on of dumping and injury shall nevertheless be 
completed if the exporter so desires or the author ities so decide.  In such a case, if a negative 
determination of dumping or injury is made, the unde rtaking shall automatically lapse, except in cases 
where such a determination is due in large part to the existence of a price undertaking.  In such cases, 
the authorities may require that an undertaking be ma intained for a reasonable period consistent with 
the provisions of this Agreement.  In the event that an affirmative determination of dumping and 
injury is made, the undertaking shall continue cons istent with its terms and the provisions of this 
Agreement.   
                                                     
 
2 Existing footnote 19 : The word "may" shall not be interpreted to allow the simultaneous continuation 
of proceedings with the implementation of price undertakings except as provided in paragraph 4. 
3 Editorial note : Wording of the last sentence to be reviewed in light of negotiations on lesser duty  
4 Editorial note: Period for making price undertaking offers to be negotiated. A 30-day period would 
seem reasonable. TN/RL/GEN/76/Rev.1 
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  8.5 Price undertakings may be suggested by the authorities of the importing Member, but no 
exporter shall be forced to enter into such undertak ings.  The fact that exporters do not offer such 
undertakings, or do not accept an invitation to do so, shall in no way prejudice the consideration of the case.  However, the authorities are free to determine that a threat of injury is more likely to be realized 
if the dumped imports continue. 
 
8.6 Authorities of an importing Member may requi re any exporter from whom an undertaking has 
been accepted to provide periodically information re levant to the fulfilment of such an undertaking 
and to permit verification of pertinent data.  In case of violation of an undertaking, the authorities of 
the importing Member may take, under this Agreemen t in conformity with its provisions, expeditious 
actions which may constitute immediate applicat ion of provisional measures using the best 
information available.  In such cases, definitiv e duties may be levied in accordance with this 
Agreement on products entered for c onsumption not more than 90 days before the application of such 
provisional measures, except that any such retroact ive assessment shall not apply to imports entered 
before the violation of the undertaking.  However, the authorities shall exercise its decision to revoke 
a price undertaking with special care.  Prior to revo cation of a price undertaking, the authorities of the 
importing Member shall provide the exporter co ncerned an opportunity to comment.  A price 
undertaking may not be revoked on grounds of inadve rtent errors, non-compliance for reasons outside 
the control of the exporter, or for minor inconsistencies.     
 8.7 An exporter subject to a price undertaking shall have the right to request an adjustment of the 
minimum price stated in the undertakin g if there are changed circumstances5.  
  
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5 Editorial note :  Members should discuss further the need for a definition of changed circumstances.