WORLD TRADE  
ORGANIZATION  G/ADP/AHG/W/181 
1 May 2009 
 (09-2122) 
Committee on Anti-Dumping Practices 
Working Group on Implementation Original:   English 
 
 
 
ARTICLE 3.2 - SIGNIFICANT PRICE UNDERCUTTING  
BY DUMPED IMPORTS 
 
Paper by Egypt  
 
  The following communication, dated 30 April 2009,  is being circulated at the request of the 
Delegation of Egypt.    
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  Further to the decision of the Committee on Anti-Dumping Practices of 22 October 2007 to refer the topic " How do Members determine whether there has been a significant price undercutting 
by dumped imports – Article 3.2? " to the Working Group on Implem entation, Egypt is pleased to 
submit the following paper describing how its Inves tigating Authority assesses whether or not there in 
significant price undercutting within the frame work of anti-dumping investigations.   
 
Article 3.2 of the Anti-Dumping Agreement  
  Article 3.2 of the Anti-Dumping Agreement, provides in part:   
 
"With regard to the effect of the dum ped imports on prices, the investigating 
authorities shall consider whether there has  been a significant price undercutting by 
the dumped imports as compared with the price of a like product of the importing 
Member, or whether the effect of such impor ts is otherwise to depress prices to a 
significant degree or prevent price increa ses, which otherwise would have occurred, 
to a significant degree ."   
 
The Egyptian legislative framework 
  The Regulation of Law no. 161/1998 Concer ning the Protection of the National Economy 
from Injurious Effects of Unfair Practices in Inte rnational Trade (the "Regulation") governs anti-
dumping proceedings in Egypt.  Article 39 thereof provides, inter alia :   
 
"The Investigating Authority, having examined all positive evidence, shall determine 
the material injury suffered by the domestic  industry and shall verify the following:   
 
1- Existence of significant increase in dum ped imports, either in absolute terms 
or relative to production or consumption in  Egypt.  With regard to the effect 
of the dumped imports on prices the authority shall consider: 
 G/ADP/AHG/W/181 
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  a. Whether  there has been a significant price undercutting by the 
dumped imports as compared with the price of the domestic like 
product, […] " 
The practice of the Investigating Authority 
  The Investigating Authority establishes the selling price of the like product produced and sold 
by the domestic industry in Egypt during the dumping assessment period
1 and compares that price 
with the price of the imported pr oduct concerned over the same period at the level of trade where both 
the like product and the product concerned first comp ete.  The standard explanation provided by the 
Investigating Authority in the reports sent to  interested parties is the following:   
 
"Price undercutting is the selling of the dumped product in the domestic market at 
prices lower than the selling prices of the like product produced by the domestic 
industry. "   
 
 Comparison of products for price undercutting assessment  
  The Investigating Authority considers that the like product used for the determination of price 
undercutting should have identical or closely re sembling characteristics to that of the product 
concerned.    
 If there were a substantial number of import transactions during the assessment period, the 
Investigating Authority may carry out its price undercutting assessment on the basis of a representative number of types and/or transactions.     Level of trade comparisons
 
 
 The Investigating Authority first determines the appropriate level of trade for comparison 
purposes after having considered the sales and dist ribution processes of both the like product and the 
product concerned in the Egyptian market for the assessment period.     In most investigations to date the comparable levels of trade have been found to be the ex-
factory level for the like product and the into-im porter's store level for the product concerned.  
However, comparisons have also been made at other levels of trade, e.g., at ex-importer's store level 
for the product concerned, where appropriate.     Given the very limited cooperation of importers , the assessment of price undercutting is often 
a complex exercise for the Investigating Authority.   The latter, in the absence of cooperation from 
importers, typically relies on the information and da ta provided by exporters, other governmental 
authorities and private sources, e.g., frei ght forwarders and customs brokers.   
  Assessing Price Undercutting in Expiry Reviews
 
 
 In the framework of expiry review inves tigations, two price undercutting assessments are 
performed by the Investigating Authority.  The firs t is with the anti-dumping duty included while the 
second is with the anti-dumping duty excluded.  Th e two undercutting assessments are made as part of 
the injury assessment of the likelihood of injury continuing or recurring if anti-dumping duties were 
allowed to expire.   
 
 Significant Price Undercutting  
 
                                                      
1 In some cases the price undercutting comparison may be made over the injury assessment period.    G/ADP/AHG/W/181 
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   The Investigating Authority does not consider  that price undercutting is in and of itself 
necessarily injurious to the domestic industry.  Nor does it consider that a particular percentage of price undercutting is in and of itself "significant".  Rather, the Investigating Authority considers that 
price undercutting can be considered to be "sig nificant" where it has been found that such 
undercutting has contributed to other injury effects.  For example, price undercutting is likely to be 
considered significant when it has resulted in pr ice suppression or depression or when it resulted in 
lost sales by the domestic industry.     In judging whether price undercutting is "signi ficant" the Investigating Authority also takes 
into account the price sensitivity of the product in the Egyptian market.  If the price of a product is 
very sensitive, it is conceivable that even low levels  of price undercutting can lead to injurious effects 
to the domestic industry and that, therefore, such lo w levels of price undercuttin g can be deemed to be 
significant.     A further factor which the Investigating Author ity has taken into account is the normal profit 
margin for the like product in the Egyptian market.  Other factors may be considered on a case-by-
case basis.     In all cases where it found that the domestic industry was suffering serious injury, the Investigating Authority also found significant price undercutting.    
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