WORLD TRADE  
ORGANIZATION  G/ADP/AHG/W/185 
12 October 2010 
 (10-5245) 
Committee on Anti-Dumping Practices 
Working Group on Implementation Original:   English 
 
 
 
ARTICLE 11.3 – "SUNSET" REVIEWS UNDER  
THE ANTI-DUMPING AGREEMENT 
 
Discussion Paper by New Zealand  
 
  The following communication, dated 12 October 2010, is being circulated at the request of the Delegation of New Zealand.  
_______________ 
 
 
INTRODUCTION 
 
1. At its October 2009 meeting, the Working Group on Implementation agreed to discuss the topic of "sunset" reviews to enable Members to  share their practices and experiences on "sunset" 
reviews.  Korea
1 suggested this topic because Members are implementing "sunset" reviews in various 
formats, and a discussion of how different Memb ers conduct "sunset" reviews would allow members 
to better understand each Member's re lated practice and its rationale. 
 
2. In a paper dated 13 April 2010 (G/ADP/AHG/ W/184), Korea outlined its practice, noted a 
number of topics for discussion and invited Members to  share their experiences.  At the April 2010 
meeting of the Working Group Korea presented its pape r and answered a number of questions raised 
by various Members in response to its paper on its practices and experi ences in conducting "sunset" 
reviews.  Korea and other members also provided insi ghts into how they conducted "sunset" reviews.   
 
3. "Sunset" reviews are becoming increasingly important for new users of the AD Agreement as 
measures they have imposed as a result of original investigations come to the end of their 5-year 
expiry period.  New Zealand has completed a number of "sunset" reviews and was pleased to provide some insight into how we conduct "sunset" review s, at the April 2010 Working Group meeting.  We 
would like to share our experience with Members on the issues we have faced when undertaking these 
reviews, in this paper.  Like Korea, New Zeal and encourages Members to share their experiences and 
if they have come across similar issues, how they dealt with these or other issues.  
NEW ZEALAND'S APPROACH TO "SUNSET" REVIEWS 
 New Zealand's Legal Framework
 
 4. The New Zealand Dumping and Countervailing Duties Act 1988 states the following in respect of reviews: 
                                                     
 
1 The topic was suggested by the Republic of Korea in a paper circulated on 9 October 2009 
(G/ADP/AHG/W/183). G/ADP/AHG/W/185 
Page 2  
 
  Section 14(8): The Chief Executive may, on his or her own initiative, and shall, 
where requested to do so by an inter ested party that submits positive evidence 
justifying the need for a review, initiate a review of the imposition of anti-dumping duty or countervailing duty in relation to goods  and shall complete the review within 
180 days of its initiation.  
New Zealand's Practice
 
 5. While the New Zealand enacting legislation no tes that "positive evidence" must be submitted 
by an interested party, justifying the need for a review, it does not explicitly state how the 
New Zealand authorities should conduct a "sunset" review .  Therefore, in its "sunset" reviews, when 
interpreting Article 11.3 of the AD Agreement, Ne w Zealand takes guidance from New Zealand legal 
cases, WTO Panel and Appellate Body reports and approaches taken by other WTO Member 
countries.   6. Mindful of the different factors involved in each case, New Zealand adopts a flexible 
approach to "sunset" reviews, but bases its an alysis on the following general principles: 
• New Zealand establishes whether the expiry of the AD duty would be likely to lead to 
a continuation or
 recurrence of dumping and injury .  For guidance on the level of 
evidence that is required to meet the "w ould be likely" criteria (of Article 11.3), 
New Zealand takes into account  WTO jurisprudence, e.g. United States – Sunset 
Reviews of Anti-Dumping Measures on O il Country Tubular Goods from Argentina .2 
• The test to be applied in respect of the likelihood of a continuation or recurrence of 
dumping and material injury is a positive one, i.e., New Zealand needs to be satisfied, 
based on positive evidence, that certain even ts are likely to occur, and that those 
events will cause dumping and material injury  to the industry to continue or recur in 
the absence of AD duty.  In this respect, Ne w Zealand refers to the findings of WTO 
jurisprudence, e.g. United States Anti-Dumping Duty on Dynamic Random Access 
Memory Semi Conductors (DRAMS) from Korea .3 
• Interpretation of the phrase "would be likel y" is guided by a New Zealand Court of 
Appeal judgement referring to "a real and substantial risk…, a risk that might well 
eventuate".4 
• In considering whether removal of the duty w ould be likely to lead to a recurrence of 
dumping and injury, New Zealand considers what is likely to happen in the foreseeable future .  The extent to which New Zeala nd is able to make judgements on 
the likelihood of events occurring in th e foreseeable future will depend on the 
circumstances of each case and, therefore,  the "foreseeable future" will range from the 
imminent to timeframes longer than imminent. 
                                                     
 
2 Report of the Panel – United States – Sunset Reviews of Anti-Dumping Measures on Oil Country 
Tubular Goods from Argentina  – WT/DS268/R – Circulated 16 July 2004.  Report of the Appellate Body – 
WT/DS268/AB/R – Adopted 17 December 2004. The Appellate Body reaffirmed its own determination in 
United States – Sunset Review of Anti-Dumping Duties on Corrosion-Resistant Carbon Steel Flat Products from 
Japan , that an affirmative likelihood determination may be made only if the evidence demonstrates that 
dumping would be probable  if the duty were terminated - and not simply if the evidence suggests that such a 
result might be possible or plausible. 
3 Report of the Panel – United States – Anti-Dumping Duty  on Dynamic Random Access Memory 
Semi Conductors (DRAMS) of One Megabit or Above from Korea  – WT/DS99/R – Adopted 19 March 1999. 
4 Commissioner of Police vs Ombudsman [1988] 1 NZLR 385 .  G/ADP/AHG/W/185 
 Page 3 
 
 
  • In considering the likelihood of injury , New Zealand is guided by the provisions in the 
AD Agreement that may be helpful in assessing that likelihood, including, if appropriate, the factors used in Article 3.7 in assessing a threat of injury.  The test to 
be applied, however, is different from that for establishing whether there is a threat of injury (see below). 
Undertaking the Likelihood Test in Respect of a Continuation or Recurrence of Dumping or Injury 
 
 
Likelihood of Continuation or Recurrence of Dumping  
7. In establishing the likelihood of continuation or recurrence of dumping, New Zealand will 
first establish if the goods continue to be dumped into New Zealand with the duty in place.  This 
involves an analysis and comparison of the latest export prices and normal values from the country of 
export, in the same manner as is performed in an original investigation and using the same method of 
calculating dumping margins.
5  If there is current dumping (with the AD duty in place), New Zealand 
normally takes the view, in the absence of any othe r evidence to the contrary, this is unlikely to 
change if the duty was removed.  In other word s, the continued existence of dumping while the 
measures are in effect indicates that dumping w ill likely continue if the AD measures expire. 
 8. However, the absence of dumping while the measu re is in effect may not necessarily indicate 
that dumping will not reoccur once the AD measure e xpires, since exporters might revert to prior 
pricing practices once the AD measure has been re moved.  In fact, because New Zealand imposes a 
benchmark (reference price) AD duty in the majority of cases, foreign exporters often price exports at 
or slightly above the benchmark pric e as a direct result of the imposition of the AD duty.  This causes 
a problem because it does not provide a reliable export price, unaffected by the existence of the duty, to compare with the normal value in  order to establish if the goods continue to be dumped.  Also, the 
imposition of the AD duty has meant in some cases that imports have stopped entirely. This will not 
allow New Zealand to obtain an actual export pri ce to New Zealand which it can compare with the 
normal value. 
 9. Under these circumstances, it is not an optio n to examine the likelihood of a continuation of 
dumping.  Where this is the case New Zeala nd looks to establish the likelihood of a recurrence  of 
dumping normally by using export prices from the country of export to export markets other than New Zealand.
6  These export markets will need to be markets where AD duty has not been imposed 
so that the export prices to these markets are una ffected by the imposition of AD duty and can be 
compared with the normal values on a fair basis.  Th ey will also be export markets that are similar as 
possible to New Zealand. 
 
                                                      
5 This information is collected from foreign expo rters and producers, via questionnaires, that were 
exporting to New Zealand over the review period. The review period is usually the latest 12-month period prior to the initiation of the "sunset" review. 
6 Where this information is not forthcoming from th e exporters, or where the exporter has not made 
comparable sales to other export destinations, or when for some other reason, the information is not deemed reliable or satisfactory, New Zealand will resort to p ublically available export statistics. In this respect 
New Zealand has often used the internet site TradeMap which is operated by the International Trade Centre 
(www.trademap.org).  TradeMap provides import and export values and volumes for over 220 countries and territories and for 5,300 products of the Harmonized System.  Access to Trade Map is free for users in 
developing countries. G/ADP/AHG/W/185 
Page 4  
 
  Points for Discussion 
 
In recent "sunset" reviews New Zealand has experienced some cases of non-cooperation from 
interested parties, particularly foreign exporte rs and producers subject to the current AD duty. 
 
At the April 2010 meeting of the Working Group New Zealand appreciated hearing from other 
Members about whether they had also experien ced cases of non-cooperation from foreign exporters 
and other interested parties when conducting "sunset " reviews, and what information they used as a 
substitute, especially in respect of  export prices and normal values. 
 
New Zealand would welcome further discussion about what substituted information is used as the 
basis for "facts available" in cases of non-cooperation from fore ign exporters.  New Zealand is 
especially interested to know the approach Me mbers take to calculating meaningful dumping 
margins in a "sunset" review when they are unabl e to obtain reliable, unaffected, export prices into 
their own countries due to either the exporters pr icing up to a reference price duty (where these are 
used) or imports having stopped complete ly due to the imposition of the AD duty. 
 New Zealand is also interested in the extent to  which other Members consider the performance and 
capacity of the foreign exporters and changes in the market conditions in the exporting country in 
assessing the likelihood of recurrence of dumping and/or injury. 
  
Likelihood of Continuation or Recurrence of Injury  
 
10. In considering injury in a "sunset" review, New Zealand examines whether the removal of the 
AD duty would be likely to lead to the continuation or recurrence of injury.  First, New Zealand evaluates the actual impact of the imposition of the AD duty on the domestic industry; second, 
New Zealand makes a prospective assessment of the lik elihood of continuation or recurrence of injury 
in the absence of the AD duty.  
11.  In evaluating the actual impact of the imposition of the AD duty, New Zealand adopts a 
similar approach to Korea. New Zealand looks at th e extent of any changes in import volumes, prices, 
and overall industry performance after the im position of the AD duty. To assess the industry 
performance, New Zealand will an alyse the changes in production and sales volumes and profits, 
inventory and employment levels etc, in much the same manner as it would in an original 
investigation. 
 12. However, with the AD duty already in place,  it is unlikely that the domestic industry will 
have suffered further injury from the dumped goods.  Th erefore, the focus of th e injury analysis will 
normally be on whether, and the extent to which, there is likely to be a recurrence  of injury in the 
absence of the AD duty.  
 13. In order to assess the likelihood of a recurrenc e of injury (in the absence of the AD duty), 
New Zealand considers:  
• The likely increase in the volume of dumped imports; 
• The likely imported price of the product into New Zealand and the extent to which the 
imported price would undercut the price of the New Zealand product;  
• The likely impact of such imports on the domestic industry's performance.  G/ADP/AHG/W/185 
 Page 5 
 
 
  14. In conducting the likelihood of recurrence of inju ry analysis, domestic industry is requested to 
provide a scenario (or a number of scenarios) deta iling projected future financial performance if the 
duty was removed.  These projections are re quired to include the factors noted above. 
 15. Of the three factors above, New Zealand places most emphasis on the likely imported price 
into New Zealand of the product under considerat ion (in the absence of the AD duty) because it 
considers the imported prices will drive any likely increase in volume of dumped imports which will 
in turn impact on the domestic industry's financial pe rformance, in general.  However, New Zealand is 
also guided by the AD Agreement factors in Article 3. 7 of the AD Agreement, which relate to a threat 
of material injury determination.
7  In this respect, New Zealand al so seeks to obtain information on, 
and analyse, the inventory levels and production capac ity of the foreign exporters (which will provide 
an indication of their ability to significantly in crease exports to New Zealand) and the ability of 
New Zealand importers to handle increased import volumes.   Transparency During the Review Proceedings
 
 
16. Korea provided a useful description of how it approaches the issue of transparency in its 
"sunset" reviews. It noted that transparency is especi ally important in order to guarantee predictability 
and security for the interested parties in the "sun set" review proceedings.  New Zealand agrees with 
Korea in this respect and, like Korea, attempts to pr ovide the interested parties with full opportunity to 
express their views and defend their interests th roughout the "sunset" review.  Opportunities are 
provided through questionnaires and the issuing of a "D raft Review Report" for interested parties to 
comment on.  Most importantly, New Zealand maintains a complete and up-to-date public file for all its "sunset" reviews which interested parti es have access to throughout the review.  
 
 
New Zealand is interested in hearing from Member s how they ensure tran sparency in conducting 
sunset reviews.  
 
 
 
__________  
                                                      
7 Article 3.7 of the AD Agreement lists a number of factors which the Authorities should consider 
when making a determination of a threat of material injury (as opposed to an actual injury determination).  New Zealand considers these factors provide some guidan ce to the type of factors which are applicable to 
analysing the likelihood of a recurrence of injury (shou ld the duty be removed).