WORLD TRADE  
ORGANIZATION  G/ADP/W/447 
5 October 2005 
 (05-4453) 
Committee on Anti-Dumping Practices Original:   English 
  
TRANSITIONAL REVIEW MECHANISM PURSUANT TO 
SECTION 18 OF THE PROTOCOL ON THE ACCESSION 
OF THE PEOPLE'S REPUBLIC OF CHINA 
 
Comments and Questions from Japan Concerning Anti-Dumping
 
 
 
 The following communication, dated 3 October 2005, is being circulated at the request of the Delegation of Japan.  
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 Japan appreciates the steady improvements in the anti-dumping law and practice of the 
People’s Republic of China (hereinaft er China), especially with regard to the notice of initiation of the 
investigation, publication of inform ation, on-site verification, etc. 
  Our common goal of the Transitional Review Me chanism (TRM) is to achieve the complete 
compliance of the Chinese anti-dumping law and pr actice with the disciplines of the Anti-dumping 
Agreement (ADA).  In this context, we would like to remind you that, in the last TRM session in the 
Anti-dumping Committee Meeting, China requested other countries to “make comments based on 
solid evidence and facts of individual cases” (G/ADP /M/27, paragraph 81).  Therefore, Japan poses 
several questions below based on specific cases, and is willing to discuss issues with China in a 
constructive manner. 
 
1. Initiation of investigations/reviews wi thout clear examination of the accuracy and 
adequacy of the evidence provided in the applications 
 
 With regard to initiation of the investigati ons and reviews by Chinese authorities, we have 
concerns about their consistency with Article 5. 3 of the ADA, which requires the authorities to 
“examine the accuracy and adequacy of the evidence provi ded in the application”.  In view of the risk 
that an initiation of the investigation itself may cau se a heavy burden to fall on the respondents, the 
authorities should initiate an investigation with great caution. 
  More specifically, in the investigation of bisphenol-A  (initiation date: 12 May 2004), most of 
the data provided in the application were not consis tent with the data disclosed by the applicants 
themselves or with publicly available financial data  that are easily available to the government.  
Though these public data indicated good performances of the applicants in sales, profits, domestic 
prices, etc., the authorities initiated the investiga tion without clear examination of the accuracy and 
adequacy of the evidence in accord ance with Article 5.3 of the ADA. 
 
 In addition, the authorities initiated an investigation concerning nucleotide food additives  
(initiation date: 12 November 2004), regardless of significant discrepan cies between the data 
contained in the application and the actual data.  The alleged upward trend in  exports from Japan did 
not exist; on the contrary, actual exports from Japan had steadily decreased, as  shown in the request 
letter submitted by the Government of Japan dated 4 January, 2005. G/ADP/W/447 
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 Moreover, the authorities initiated the review of the anti-dumping measures on toluene 
diisocyanate (TDI)  (initiation date: 3 February 2005) based on  an application for review lodged by 
the domestic industry in a manner inconsistent w ith Article 11.2 of the ADA.  While Article 11.2 
allows the authorities to initiate a review “where  warranted” upon request by an interested party 
“which submits positive informati on substantiating the need for review”, and while the responding 
companies drew attention to this condition in thei r written letter to the Government of China, the 
authorities initiated the review without any clear reason.  Initiation of the review without positive 
information or reason is inconsistent with Article 11.2, as well as Article 6.2, which ensures the right 
of interested parties to defend their interests, which is applied mutatis mutandis  to reviews in 
accordance with Article 11.4. 
 
 We request China to explain the consistency of its measures with the ADA in regard to the 
above-mentioned situation. 
 
2. Incomplete determination of injury 
  With regard to insufficient analysis concerning the determination of injury that is short of 
reasons/explanations, we have c oncerns about its consistency w ith obligations under the ADA, 
including Article 3.1 thereof, which requires the auth orities to make a determination of injury “based 
on positive evidence” and involving “an objective examina tion” of various factors; Article 3.4 thereof, 
which requires the authorities’ comprehensive analysis  of all 15 factors; and Article 3.5 thereof, 
which requires the authorities’ “demonstration” of a causal relationship “based on an examination of 
all relevant evidence before the authorities”. 
 
 For example, the authorities made a positive findi ng of injury in the original investigation 
concerning TDI (date of the final determination: 22 November 2003), while indicators such as 
nominal volume of domestic consumption, produc tion of the domestic like product, sales volume and 
market share, etc, did not appear to have dete riorated.  Moreover, there were no comprehensive, 
objective or reasonable explanations as to the causal  relationship between the dumped imports and the 
injury.  
  
 More specifically, the authorities found in th e preliminary determination (date of the 
preliminary determination: 10 June 2003) that the range of price decrease of the domestic like 
products was wider than that of subject imports, and that the market share of the domestic like 
products increased in the period of investigation compar ed to the previous year.  While this indicates 
that it was the domestic like products that lead the decrease in price, the authorities did not undertake 
any analysis in the preliminary and final dete rmination on who the price leader had been.  
  We request China to explain the consistency of  its measure with the ADA in regard to the 
above-mentioned situation. 
 
3. Insufficient transparency and in sufficient opportunity for comment 
  With regard to the transparency in inves tigations conducted by the Chinese authorities, we 
have concerns about its consiste ncy with the obligations under the ADA, including Article 6.8 thereof, 
which allows the authorities to use facts available only when an “interested party refuses access to, or 
otherwise does not provide, necessary information w ithin a reasonable period or significantly impedes 
the investigation”; paragraph 5 of Annex II thereof,  which requires the authorities not to disregard the 
information “even though the information provided may not be ideal in all respects,” “provided the 
interested party has acted to the b est of its ability.”; and paragraph 6, ibid, which states that the 
supplying party should “be informed forthwith of the reasons therefore, and should have an 
opportunity to provide further explanations”.   G/ADP/W/447 
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 For example, in the investigation of nucleotide food additives , the authorities made a 
preliminary determination of injury  solely dependent on the applicati on by the domestic industry (date 
of the preliminary determination: 4 August 2005), although the information submitted by the 
Government of Japan indicated a steady decrease in the volume of exports from Japan.  In making such a determination, the reason provided by th e authorities was as follows: while the authorities 
“fully considered information submitted by the r espondents”, they found “information submitted by 
the applicant reliable in making the determination of  injury based on the best information available, 
owing to the incompleteness of the information s ubmitted by the respondents”.   Regardless of the 
performance or cooperation of the respondents in su bmitting information during the investigation, the 
authorities must ensure the right of other inter ested parties who submitted data to receive an 
explanation and to make comments when the informa tion they submitted is rejected.  However, the 
authorities did not inform the Government of Japan of  the reason for the rejection of the information it 
submitted, or provide it with the opportunity for co mment, though this is required by the relevant 
provisions of the ADA referred to above. 
  We request China to explain the consistency of its measures with the ADA in regard to the 
above-mentioned situation. 
 
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