WORLD TRADE  
ORGANIZATION  TN/RL/GEN/121 
21 April 2006 
 (06-1867) 
Negotiating Group on Rules Original:   English 
  
THREAT OF MATERIAL INJURY 
 
Communication from Egypt
 
  
 The following communication, dated 20 April 2006,  is being circulated at the request of the 
Delegation of Egypt. 
  The submitting delegation has requested that th is paper, which was submitted to the Rules 
Negotiating Group as an informal document (JOB(06)/ 104), also be circulated as a formal document. 
 
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This proposal refers to the necessity of clarifying the concept of “ threat of material injury ” 
and develops earlier submissions by Egypt and other Members
1.  Indeed, in the framework of these 
negotiations, several Members have expressed their c oncerns about the fact that Article 3.7 does not 
provide for sufficiently clear factors to determine whet her or not there is a threat of material injury.  
Egypt shares these concerns and, by means of th e present proposal, intends to further specify the 
concept of threat of material injury in order to provide investigating authorities and interested parties 
with additional guidance for its assessment.  
 The concept of threat of material injury is  particularly important for developing country 
Members since the generally small size of their domestic markets and the limited development of their 
domestic industries render the latter particularly vul nerable to dumped imports.  Because industries of 
developing countries can rapidly cease to exist, it is indispensable that the mechanism allowing 
Members to protect their industries as soon as a threat  of material injury b ecomes apparent be as 
efficient and practical as possible.  The present proposal, thus aims at clarifying the factors that may be considered in threat of material injury  cases. 
  
Introduction of an explicit reference to the factors listed in Article 3.4  
 
 Egypt is of the opinion that the existing list of factors in Article 3.7 does not sufficiently assist 
investigating authorities in their assessment of whether there is a threat of injury.  Their formulation 
together with the inexperience of a number of i nvestigating authorities in implementing Article 3.7 
may make the assessment of threat of injury particularly cumbersome.  Egypt believes that 
investigating authorities should be encouraged to c onsider additional and more practical factors when 
assessing whether or not there is a threat of material injury.  
 Therefore, Egypt proposes to enlarge the list of factors considered under Article 3.7 by adding 
a subparagraph (v) with a reference to  the factors listed in Article 3.4.  Indeed, the factors listed in 
Article 3.4 may provide useful guidance for the dete rmination of threat of material injury.  Also, 
Egypt is convinced that, since, at present, investigating authorities are by far more familiar with the 
assessment of material injury, the analysis of th ese factors in threat of injury cases will not be 
problematic. 
                                                     
 
 1 See the relevant sections in TN/R L/W/110, TN/RL/W/6 and TN/RL/W/66. TN/RL/GEN/121 
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 It should also be pointed out that the proposed  reference to the factors of Article 3.4 in 
Article 3.7 is consistent with the inte rpretation of the latter as confirmed in Mexico – HFCS
2.  In this 
case, the Panel explained that Article 3.7 sets out additi onal factors that must be considered in a threat 
of injury case, but does not eliminate the obligation to consider the impact of dumped imports on the 
domestic industry in accordance with the requirements of  Article 3.4.  Therefore, a cross-reference to 
Article 3.4 would clarify the present legal situati on and provide Members wishing to investigate a 
threat case with more legal certainty.  
Clarification of the meaning of subheading (ii) of Article 3.7 
  
Egypt believes that subheading (ii) of Article 3.7 should be clarified in order to further 
endorse the practical applicability of Article 3.7.  In particular, Egypt is concerned with the 
identification of “ other export markets ” and the availability of data  concerning these markets.  
 
Subheading (ii) does not speci fy whether an assessment “ of the availability of other markets 
to absorb any additional exports ” needs to be carried out by the i nvestigating authorities even if the 
exporters/producers have not made any respective cl aims.  Likewise, Article 3.7 does not specify the 
scope of such assessment: are investigating author ities required to assess all potential export markets, 
i.e. on a worldwide basis, in order to comply with  subheading (ii), or can they limit their assessment 
to export markets that have a particular volume?  Finally, Article 3.7 does not state what kind of 
information may be used for the assessment of “other export markets ”.  This opens the door to 
arbitrary allegations by exporters/producers that  may be difficult to rebut because adequate 
information sources on third countries’ export markets are limited.  In view of the foregoing, Egypt 
considers that the elements listed under subheading (ii)  are, in their present form, not sufficiently clear 
to allow investigating authorities to conduct a meaningful analysis.  
 
 It is therefore proposed to clarify the circ umstances under which an investigation into the 
“availability of other export markets to absorb additional exports ” should be carried out.  In this 
regard, Egypt wishes to propose to modify the presen t text twofold: firstly, authorities should only 
have to investigate the absorbability of tho se export markets that have been identified by 
exporters/producers.  Secondly, exporters/pr oducers may only base their respective claims on 
information coming from sources of recognized authorit y. In other words, the burden of proof should 
explicitly be put on the shoulders of the exporters /producers and their allegations should be based on 
reliable and accessible information.  Egypt is convi nced that the proposed clarification of subheading 
(ii) would contribute to render the appli cation of Article 3.7 more practicable. 
 
Proposed Changes in Article 3.7  
 In view of the above, it is proposed to ame nd Article 3.7 of the Anti-Dumping Agreement as 
follows:  
A determination of a threat of material inju ry shall be based on facts and not merely on 
allegation, conjecture or remote possibility.  The change in circumstances which would create 
a situation in which the dumping would cause injury must be clearly foreseen and imminent.
3  
In making a determination regarding the existe nce of a threat of material injury, the 
authorities should consider, inter alia , such factors as: 
 
                                                      
 2 Mexico - Anti-Dumping Investigation of High Fructo se Corn Syrup (HFCS) from the United States , 
WT/DS132/R, paras. 7.111-142.  
3 One example, though not an  exclusive one, is that there is convincing reason to believe that there will 
be, in the near future, substantially increased importation of the product at dumped prices.  TN/RL/GEN/121 
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  (i) a significant rate of increase of dumped imports into the domestic market indicating 
the likelihood of substantially increased importation; 
 
(ii) sufficient freely disposable, or an imminent , substantial increase in, capacity of the 
exporter indicating the likelihood of substan tially increased dumped exports to the 
importing Member's market, taking into account the availability of other export 
markets to absorb any additional exports;  .  If evidence on the availability of other 
export markets to absorb any additional exports is provided, the investigating 
authorities shall take it into account if it is based on sources of recognized authority.  
 
(iii) whether imports are entering at prices that will have a significant depressing or  
suppressing effect on domestic prices, and would likely increase demand for further 
imports;  and   
 
(iv) inventories of the product being investigated.  ; and   
 
(v) the list of relevant factors in Article 3.4.  
 
No one of these factors by itself can necessarily give decisive guidance but the totality of the factors considered must lead to the conclusi on that further dumped exports are imminent and 
that, unless protective action is taken,  material injury would occur. 
 
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