WORLD TRADE  
ORGANIZATION  TN/RL/GEN/61 
15 September 2005 
 
 (05-4054) 
Negotiating Group on Rules Original:   English/ 
 French 
 
 
 
SUNSET REVIEWS 
 
Communication from Canada  
 
  The following communication, dated 14 September 2005, is being circulated at the request of 
the Delegation of Canada.   The submitting delegation has requested that th is paper, which was submitted to the Rules 
Negotiating Group as an informal document (JOB(05)/ 181), also be circulated as a formal document. 
 
_______________ 
 
 
Issue 
 
 In its first detailed submission to the Ne gotiating Group on Rules (TN/RL/W/47), Canada 
raised the issue of the sunset review of anti- dumping and countervailing measures.  Canada observed 
that while the Agreements provide that measures sh all be terminated after a maximum of five years 
unless authorities determine that such termination w ould likely lead to continuation or recurrence of 
dumping or subsidization and injury, measures are of ten typically in place for much longer periods of 
time.  Canada also noted that it would be desirable to consider further guidance in the Agreements on 
the determination of whether the expiry of a dut y would lead to continuation or recurrence of 
dumping, subsidization and injury.    Other Members have already pointed out that there is a distinct l ack of guidance in the 
Agreements on how to assess if measures are still warra nted.  This lack of guidance contrasts sharply 
with the more detailed framework provided for the initial determinati ons of dumping or subsidization 
and the initial determination of injury caused by dumpi ng or subsidization.  This situation may lead to 
significant divergences in sunset review practi ces among Members; it might even create the false 
perception that sunset reviews constitute a mere formality.  
 
 In addition, the current framework of Article  11.3 of the ADA and Article 21.3 of the ASCM 
can be interpreted – and is being interpreted – as allowing Members to maintain a measure after the 
five-year deadline while authorities are conducting a revi ew that can take 12 months or longer.  This 
problem is compounded by the fact that the curr ent text does provide for the possibility that 
authorities initiate a sunset review ex officio , without the provision of a duly substantiated request by 
the domestic industry.  In Canada’s view, this situation contributes to  the fact that, as observed by the 
European Communities in an early paper to the Group, “the presumption in current rules towards 
expiry after 5 years is being circumvented wi th unsubstantiated review s being initiated thus 
prolonging life of measures.”
1  
 
                                                      
1 TN/RL/W/30, page 5. TN/RL/GEN/61 
Page 2  
 
 Proposals  
 
 In order to bring more clarity and predictab ility to the existing disciplines regarding sunset 
reviews, Canada proposes two sets of improvements to the current provisions of the Agreements.  
 
Proposal 1
:  Canada proposes that Article 11.3 of the ADA and Article 21.3 of the ASCM be 
improved to ensure the following:  (a) that sunset reviews can only be initiated on th e basis of a duly substantiated request made by 
or on behalf of the domestic industry.  Th is would eliminate the possibility of an ex officio  
initiation of reviews by authorities (also know n as “self-initiation”) and would explicitly 
define the words “by or on behalf of the dom estic industry” using the disciplines agreed for 
initial investigations;  and, 
 (b) that the current text be improved and clarif ied to ensure that sunset reviews must be 
completed
 before the expiry of the five years provide d for in these articles for measures to be 
in place. 
 Together, these changes to the Agreements woul d strengthen the presumption that a measure shall 
expire after 5 years unless an objective examination demonstrates that continuation or resumption of 
dumping or subsidization and injury is likely. 
 
 To reflect these proposals, Canada would su ggest the following changes to the text of 
Article 11.3 of the ADA:   11.3   Notwithstanding the provisions of paragra phs 1 and 2, any definitive anti-dumping duty 
shall be terminated on a date not later than fi ve years from its imposition (or from the date of 
the most recent review under paragraph 2 if th at review has covered both dumping and injury, 
or under this paragraph), unless the authorities determine, in a review initiated
 completed  
before that date and initiated  on their own initiative or  upon a duly substantiated request made 
by or on behalf of the domestic industry as defined under article 5.42, within a reasonable 
period of time prior to that date  that the expiry of the duty would be likely to lead to 
continuation or recurrence of dumping and injury.(footnote omitted) The duty may remain in 
force pending the outcome of such a review.  
 Article 21.3 of the ASCM would also be amended as follows:  
 21.3   Notwithstanding the provisions of paragr aphs 1 and 2, any definitive countervailing 
duty shall be terminated on a date not later than five years from its imposition (or from the date of the most recent review under paragraph 2 if that review has c overed both subsidization 
and injury, or under this paragraph), unless the authorities determine, in a review completed
 
initiated  before that date and initiated  on their own initiative or  upon a duly substantiated 
request made by or on behalf of the dom estic industry as defined under article 11.4 , within a 
reasonable period of time prior to that date  that the expiry of the duty would be likely to lead 
to continuation or recurrence of subsidization and injury.(footnote omitted).  The duty may 
remain in force pending the outcome of such a review.  
 
                                                      
2 For discussion purposes, the draft legal language proposed in this document mirrors the current 
disciplines of Article 5.4 of the ADA and Article 11. 4 of the ASCM.  Any improvements or clarification 
brought to these provisions that may result from the negotiations would of course apply.  
  TN/RL/GEN/61 
 Page 3 
 
 
 Proposal 2 :  Canada proposes that the ADA and the AS CM be supplemented by the provision of 
indicative, non-exhaustive lists of factors that au thorities would need to consider in determining 
whether the expiry of a duty would be likely to lead to continuation or recurrence of dumping or subsidization and injury.    
 While it is clear that a sunset review mu st be, by its very nature, a forward-looking 
assessment that takes into account th e fact that a measure is already in place, such a review should be 
informed by the basic elements of what constitu tes dumping or subsidization and injury caused by 
such dumping or subsidization.  It is also clear th at a sunset review cannot be a mechanistic exercise 
based on the operation of presumptions; rather, it mu st be a determination based on positive evidence 
with respect to an objective examination of all rele vant factors, without necessarily ascribing to one or 
several factors decisive guidance.     In light of these principles and Canada’s experience in these matters, it is our view that the insertion in the Agreements of illustrative lists of factors would constitute useful guidance that would 
not undermine the necessary flexibility that authoriti es must have to deal with a wide variety of 
factual situations.     Therefore, Canada would propose two new Articl es to be inserted right after Article 11.3 of 
the ADA.  
 11.3.1   In determining whether the expiry of the duty would be likely to lead to continuation 
or recurrence of dumping, the authorities shall make a determination based on positive 
evidence with respect to an objective examination of all relevant factors, including: 
  (a)  whether there has been dumping while the duty was in place and, if applicable, the 
period during which the dumping occurred, the volume and prices of the dumped and non-
dumped imports, the margin of dumping, and fo r non-dumped imports, the amount by which 
the export price exceeded the normal value; 
  (b)  the past and likely future performance of the exporters, foreign producers, brokers 
and traders including in respect of production, capacity utilization, the potential to extend 
production to facilities currently used to produ ce other products, costs, sales volumes, prices, 
inventories, market share, exports, and profits; 
  (c)  changes in market conditions in the economy of the Member and internationally, 
including changes in the supply of and demand fo r the imports, in sources of imports into the 
Member, and in prices, market share and inventories; and 
  (d)  evidence of the imposition of anti-dumping or countervailing duties by other 
Members in respect of like or similar products , and evidence that such duties are likely to 
cause a diversion of imports into the Member. 
 
 11.3.2   In determining whether the expiry of the duty would be likely to lead to continuation 
or recurrence of injury, the authorities shall make a determination based on positive evidence 
with respect to an objective examinatio n of all relevant factors, including: 
  (a)  the likely volume of dumped imports if  the duty is allowed to expire, and, in 
particular, whether there is likely to be a significant increase in the volume of the dumped 
imports, either in absolute terms or relativ e to the production or consumption of the like 
product; 
 TN/RL/GEN/61 
Page 4  
 
  (b)  the likely prices of the dumped imports if  the measure is allowed to expire and their 
effect on the prices of the like product, and, in particular, whether the dumped imports are 
likely to significantly undercut the prices of the like product, or lead to price depression or 
price suppression; 
 
 (c)  the likely performance of the domestic industry and of the foreign industry, taking 
into consideration their recent performances,  including trends in production, capacity 
utilization, the potential for foreign producers to extend production to facilities currently used 
to produce other products, the employment levels , prices, sales, inventories, market share, 
exports and profits; 
 
 (d)  the likely impact of the dumped impor ts on the domestic industry if the measure is 
allowed to expire, having regard to all rele vant economic factors and indices, including any 
potential decline in output, sales, market share, profits, productivit y, return on investments or 
utilization of production capacity, and any potential negative effects on cash flow, 
inventories, employment, wages, growth, including efforts to produce a derivative or more 
advanced version of the like produc t, or the ability to raise capital; 
  (e) changes in market conditions in the economy of the Member and internationally, 
including changes in the supply of and dema nd for the imports, as well as any changes in 
trends and in sources of imports into the Member; and 
 
 (f)  evidence of the imposition of anti-dumping or countervailing duties by other 
Members in respect of like or similar products , and evidence that such duties are likely to 
cause a diversion of imports into the Member. 
 
Canada would also propose two new Articles to be  inserted right after Article 21.3 of the ASCM: 
  21.3.1   In determining whether the expiry of the duty would be likely to lead to continuation 
or recurrence of subsidization, the authoriti es shall make a determination based on positive 
evidence with respect to an objective examination of all relevant factors, including: 
 
 (a) whether there has been subsidization of  the product while the duty was in place and, 
if applicable, the nature and duration of the subsidy in respect of the product, the period 
during which subsidization occurred, the volume of subsidized product and the amount of the 
subsidy; 
 
 (b)  the past and likely future performance of the exporters, foreign producers, brokers 
and traders including in respect of production, capacity utilization, the potential to extend 
production to facilities currently used to produ ce other products, costs, sales volumes, prices, 
inventories, market share, exports, and profits; 
  (c)  changes in market conditions in the economy of the Member and internationally, 
including changes in the supply of and demand fo r the imports, in sources of imports into the 
Member, and in prices, market share and inventories; and 
  (d)  evidence of the imposition of anti-dumping or countervailing duties by other 
Members in respect of like or similar products , and evidence that such duties are likely to 
cause a diversion of imports into the Member. 
 
 21.3.2   In determining whether the expiry of the duty would be likely to lead to continuation 
or recurrence of injury, the authorities shall make a determination based on positive evidence 
with respect to an objective examinatio n of all relevant factors, including:  TN/RL/GEN/61 
 Page 5 
 
 
  
 (a)  the likely volume of subsidized imports if the duty is allowed to expire, and, in 
particular, whether there is likely to be a si gnificant increase in the volume of the subsidized 
imports, either in absolute terms or relativ e to the production or consumption of the like 
product; 
 
 (b)  the likely prices of the subsidized impo rts if the measure is allowed to expire and 
their effect on the prices of the like product, and,  in particular, whether the subsidized imports 
are likely to significantly undercut the prices of the like product, or lead to price depression or price suppression; 
 
 (c)  the likely performance of the domestic industry and of the foreign industry, taking 
into consideration their recent performances,  including trends in production, capacity 
utilization, the potential for foreign producers to extend production to facilities currently used 
to produce other products, the employment levels , prices, sales, inventories, market share, 
exports and profits; 
  (d)  the likely impact of the subsidized impor ts on the domestic industry if the measure is 
allowed to expire, having regard to all rele vant economic factors and indices, including any 
potential decline in output, sales, market share, profits, productivit y, return on investments or 
utilization of production capacity, and any potential negative effects on cash flow, 
inventories, employment, wages, growth, including efforts to produce a derivative or more 
advanced version of the like produc t, or the ability to raise capital; 
  (e)  changes in market conditions in the economy of the Member and internationally, 
including changes in the supply of and dema nd for the imports, as well as any changes in 
trends and in sources of imports into the Member; and 
  (f)  evidence of the imposition of anti-dumping or countervailing duties by other 
Members in respect of like or similar products , and evidence that such duties are likely to 
cause a diversion of imports into the Member. 
 
 This paper does not purport to represent Ca nada’s final views on this matter and Canada 
reserves the right to make further proposals.  
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