. /.   WORLD TRADE  
ORGANIZATION  G/ADP/Q1/CAN/14 
G/SCM/Q1/CAN/14 27 March 2008 
 
(08-1368) 
Committee on Anti-Dumping Practices 
Committee on Subsidies and Countervailing Measures Original:   English 
 
 
 
NOTIFICATION OF LAWS AND REGULATIONS UNDER  
ARTICLES 18.5 AND 32.6 OF THE AGREEMENTS 
 
Questions Posed by CHINA   
Regarding the Notification of CANADA1 
  
 The following communication, dated 18 March 2008, is being circulated at the request of the Delegation of China.   
 
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Question 1 
  Section 20 of Canada Special Impor t Measures Act (SIMA ), concerning the so-called " non-
market economy " issue:   
 
(1) The law defines that when domestic pri ces of the products under investigation are 
substantially determined by the government of prescr ibed country and there is sufficient reason to 
believe that they are not substantially the same as  they would be if they were determined in a 
competitive market, the sector under investigation will be designated as a non-market oriented sector 
and surrogate country methodology could be used to calculate the normal value.  SIMA , however, 
does not clearly define the sector to be considered , which, in practice, enables the investigating 
authority to go beyond the sector concerned, and unreasonably increase the burden of proof for 
respondents.   
 (2) SIMA  does not provide the criteria of "government sufficiently determining the price", 
resulting in the unlimited discretion of the investig ating authority.  In practice, the investigating 
authority only needs to find "influence" of government's policy on domestic price instead of "sufficiently determination" to determine whet her the sector is market-oriented or not.   
 
 Could Canada explain how to define a relevant "sector" to be under investigation and how to 
define "government sufficiently determining the price"?  What are the criteria?   
 
Question 2 
  SIMA  and Chapter II (subsidy margin) and ch apter III (initiation, investigation and 
determination of subsidy) of Special import Measures Regulations :   
 
(1) The provisions concerning the procedures of application and initiation are not strict, which 
lower the threshold of initiation of investigation.   
                                                     
 
1 G/ADP/N/1/CAN/4 – G/SCM/N/1CAN/4.   G/ADP/Q1/CAN/14 
G/SCM/Q1/CAN/14 Page 2 
 
 
  (2) The provisions concerning whether subsidy ex ists and what the amount and nature of it 
appears to be too simple, which requires less burden of proof for the applicant and will easily lead to 
the initiation of investigations without sufficien t evidence of subsidy, and does not meet the 
requirement of Article 11.2 of  ASCM .   
 
(3) The provisions of injury to domestic industry caused by subsidy are too general, lacking 
objective criteria.  The determination of causal li nk between subsidy and injury also lacks objective 
criteria.   
 
 How could the Canadian investigating authorit y fulfil the requirement of initiation of ASCM 
in practice?   
 
Question 3 
  Section 30.2 of Canadian International Trade Tribunal Act , concerning safeguard measures 
and preliminary measures against specific products from China:   
 
(1) The provision regarding the initiation of inves tigation is too general, which will result in a 
low threshold for initiation.   
 
(2) It lacks the procedural provisions on consu ltation, hearing and confidentiality, which provides 
the investigating authority with large discretion.   
 
(3) It authorizes the Cabinet, under the suggestion of the Minister of Treasure, to take preliminary 
measures.  This provides the Cabinet large discretion.   
 
(4) It lacks the provisions concerning the objective factors to determine whether there is market 
disruption and trade diversion.   
 
 When will the law includes provisions on procedur es on consultation, hearing, etc.?  How to 
determine market disruption and trade diversion?   
 
 
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