WORLD TRADE  
ORGANIZATION  TN/RL/GEN/104 
6 March 2006 
 (06-0938) 
Negotiating Group on Rules Original:   English 
  
PROPOSALS ON SUNSET 
 
Paper from Japan
 
 
  The following communication, dated 2 March 2006, is being circulated at the request of the 
Delegation Japan.   The submitting delegation has requested that th is paper, which was submitted to the Rules 
Negotiation Group as an informal document (JOB(06)/43), also be circulated as a formal document. 
 
_______________ 
  I. EXPLANATION 
 
 AD measures are often imposed for more than five  years, some for considerably longer.  We 
believe that this practice is contrary to the intent  behind Article 11.3 of the Anti-Dumping Agreement.  
Article 11.3 states that an AD duty shall be terminat ed after not later than five years after their 
imposition unless authorities determine that such te rmination would likely le ad to continuation or 
recurrence of dumping or subsidization and injury.
1  This language, together with the “only as long as 
and to the extent necessary” language of Article 11.1,  demonstrates an intent that most if not all AD 
measures should be terminated within five years after imposition (or even sooner).  The disciplines 
under Article 11.3 must be improved in order to accomplish this.    
 
This proposal has four main aspects:   
 
• automatic termination of the measures at a defined point in time;  
• an opportunity for termination in a sunset review by the fifth year;  
• clearer standards for the sunset reviews; and  
• an opportunity for exporters to demonstrate affirm atively that they are not likely to dump in the 
event of termination.   
 1. Automatic termination  
 
 
In the Negotiating Group on Rules, it has been proposed that AD measures should 
automatically terminate five years after their imposition.2  This paper restates the position that 
measures should terminate automatically  at a defined point in time.  This  is the best way to ensure that 
measures do not continue indefinitely (and after automatic termination, authorities may conduct new 
AD investigations if they have reason to believe that injurious dumping is occurring).  However, we 
are willing to consider that automatic termination ma y occur later than five years after imposition (the 
exact period would be a matter for negotiation).   
                                                      
 1 For simplicity, we refer to these determinations as the “likelihood of dumping” and the “likelihood of 
injury.” 
 2 TN/RL/GEN/74. TN/RL/GEN/104 
Page 2  
 
   
2. Opportunity for termination or revi ew before the end of year five  
 
 
If automatic termination does not take place until after the fifth year, there should still be an 
opportunity for termination at or before the fifth y ear.  The sunset review mechanism with sufficient 
improvements can accomplish this goal.  If authorities receive a duly substantiated request made by or 
on behalf of the domestic industry as is required by Article 5.4, they must initiate a sunset review; 
otherwise, they must terminate the measures.  No self-initiation of sunset reviews by authorities shall 
be allowed. 
 3. Clearer standards for sunset reviews
 
 
This paper proposes factors that authorities mu st consider in determining likelihood of 
dumping and likelihood of injury.3  We believe these factors will lead to greater predictability and 
transparency in sunset determinations.  Authorities must consider all relevant factors, and may not 
base affirmative sunset determinations on assumptions  or conjecture. It is important to note that 
authorities shall base their determination not on data or findings in the original investigation, but 
rather focus their analysis on what the export and pricing behaviour of the exporter or producer would 
be in the absence of the AD measure. The proposed list of factors is designed to enable such forward-
looking analysis. 
 
Also, authorities should determine the “lik elihood of dumping” and termination of the 
measure on an exporter-specific basis, as dumping is  inherently an exporter-s pecific determination. 
 
4. Opportunity for exporters to show affirm atively that they are not likely to dump   
  
While a determination of likelihood of dumpi ng is a forward-looking exercise, the dilemma 
is that available data for such determination are lim ited to those in the past .  There are even often 
cases where there are no export transactions to the importing Member sometimes due to the fact that 
the duty level is at prohibitive leve ls.  Thus, exporters should also ha ve an affirmative opportunity to 
show that they are not likely to du mp in the absence of the AD measure. 
 
 This can best be shown by the exporters dem onstrating their actual pricing behaviour in the 
absence of the measure, by giving exporters the opport unity to provide the authorities with the most 
reliable indicator of prices at which they would ex port at non-dumped prices after termination of the 
AD measures (the “expected export price”), and mon itoring the exporters’ actual export price whether 
it followed the level of the expected export price.   
 
II. PROPOSALS 
 
• Amend Article 11.3 of the AD Agreement as follows: 
 
11.3   Notwithstanding the provisions of paragraphs 1 and 2, any definitive anti-dumping duty shall 
be terminated on a date not later than five year s from its imposition (or from the date of the most 
recent review under paragraph 2 if that review ha s covered both dumping and injury, or under this 
paragraph ), unless the authorities determ ine, in a review initiated  completed  before that date4 and 
initiated  on their own initiative or  upon a duly substantiated request made by or on behalf of the 
                                                      
 3 These factors are based in part on the factors proposed in the submission by Canada 
(TN/RL/GEN/61). 
 4 When the authorities suspend the imposition of the definite anti-dumping duty pursuant to 
subparagraph 3.5.1, such suspension shall be made before that date and the review shall be completed within 
[Y] months from that date.  TN/RL/GEN/104 
 Page 3 
 
 
  domestic industry as is required by paragraph 4 of Article 5,  within a reasonable period of time prior 
to that date  that the expiry of the duty would be likely to lead to continuation or recurrence of 
dumping and injury.( original footnote 22 omitted ).  The duty shall in no event remain in force after 
[X] years from the imposition of the duty.    
 
• Add the following subparagraphs to Article 11.3: 
 
11.3.1 [Principles]   In determining whether th e expiry of the anti-dumping duty would be 
likely to lead to continuation or recurrence of dumping and injury, the authorities shall 
make a determination based on positive evid ence involving an objective examination of 
all relevant factors.  The authorities may not presume that dumping or injury is likely to 
continue or recur on the basis of one or mo re factors without evaluating all relevant 
factors.  
 
11.3.2 [Likelihood of dumping]   The determination whether the expiry of the duty would be 
likely to lead to continuation or recurrence of dumping shall be made on an exporter or 
producer specific basis.  The authorities shall terminate the anti-dumping duty for any 
exporter or producer for which the authorities ha ve not found that the expiry of the duty 
would be likely to lead to continuation or recurrence of dumping. 
 
11.3.2.1  [Factors]   The authorities shall evaluate all relevant factors, including the 
following factors, in determining whether the expiry of the duty would be 
likely to lead to continuation or recurrence of dumping: 
 
(a) the normal value in the most recent one year period and any changes in 
the export transaction prices and volume thereof to the importing 
Member from the imposition of the anti-dumping duty up to the time of this review;
5 
 
(b) the past and likely fu ture performance of the exporter and producer, 
including in respect of production, capacity utilization, costs, sales, 
prices, inventories, market share, exports to third countries, and profits; 
and 
 
(c) changes in market conditions in the exporting country, in the importing 
Member and in third countries, including changes in the supply of and 
demand for the like product6, in sources of the like product in the 
importing Member, and in prices, market share and inventories thereof. 
 
11.3.3  [Likelihood of Injury]   The authorities shall determine whether the expiry of the duty 
would be likely to lead to continuation or recurrence of injury to the domestic industry 
through the effects of imports from exporters or producers likely to dump if the duty expires (referred in this paragraph as “likely dumped imports”).  The authorities may 
find that the likelihood to lead to recurren ce of injury exists only where the recurrence 
of injury to the domestic industry is  clearly foreseen and imminent.   
 
                                                     
 
 5 If the authorities calculate the margin of dumping, such margin of dumping shall be calculated in 
accordance with the provi sions of Article 2. 
 6 This may include evidence of the imposition of anti-dumping or countervailing duties by other 
Members in respect of the like product,  and evidence that such duties are lik ely to cause a diversion of imports 
into the Member. TN/RL/GEN/104 
Page 4  
 
  11.3.3.1  [Factors]   The authorities shall evaluate all relevant factors, including the 
following in determining whether the expiry of the duty would be likely to lead to continuation or recurrence of injury to the domestic industry: 
 
(a) the likely volume of the likely du mped imports, and, in particular, 
whether there is likely to be a significant increase in the volume of these 
imports, either in absolute term s or relative to the production or 
consumption of the like product in the importing Member; 
 
(b) the likely prices of the likely dumpe d imports, and likely effect of such 
prices on the prices of the domestic like product, in particular, whether 
these imports are likely to significantly undercut the prices of the 
domestic like product, or lead to price depression or price suppression;  
 
(c) the likely impact of the likely dumped imports on the domestic industry, 
having regard to all relevant econom ic factors and indices, including any 
potential decline in output, sales, ma rket share, profits, productivity, 
return on investments or utiliza tion of production capacity, and any 
potential negative effects on cash flow, inventories, employment, wages, 
growth, including efforts to produce a derivative or more advanced 
version of the like product, or the ability to raise capital or investments; 
 (d) changes in market conditions in the exporting country, in the importing 
Member and in third countries, including changes in the supply of and 
demand for the like product
7, as well as any changes in trends and in 
sources of the like product in the importing Member; and 
 
(e) likely effects of known factors other than the likely dumped imports to 
the injury to the domestic industry, including,  inter alia , the likely 
volumes and prices of imports of the like product othe r than those from 
exporters or producers likely to dump,  contraction in demand or changes 
in the patterns of consumption, trade restrictive practices of and 
competition between the foreign and domestic producers, developments 
in technology and of products other th an the like product, and the export 
performance and productivity of the domestic industry. 
 
11.3.3.2  [Cumulation]   For purposes of de terminations under this paragraph, 
authorities may not cumulatively assess the likely effects of likely dumped 
imports from more than one country when determining the likelihood of 
recurrence of injury to the domestic industry, unless these imports are 
simultaneously subject to the review under this paragraph and the authorities 
determine that (a) the likely volume of likely dumped imports from each country is not negligible, and (b) a cumulative assessment of the likely effects 
of the likely dumped imports is appropr iate in light of the conditions of 
competition between these imports and the conditions of competition between these imports and the like domestic product. 
 
11.3.4  [Initiation Request from the Domestic Indus try]  A request from the domestic industry 
to initiate a review under this  paragraph shall include evidence of likelihood to lead to 
                                                     
 
 7 This may include evidence of the imposition of anti-dumping or countervailing duties by other 
Members in respect of the like product,  and evidence that such duties are lik ely to cause a diversion of imports 
into the Member.  TN/RL/GEN/104 
 Page 5 
 
 
  continuation or recurrence of dumping and in jury if the anti-dumping duty expires.  
Simple assertion, unsubstantiated by relevant  evidence, cannot be considered sufficient 
to meet the requirements of this paragraph.  The request shall contain such information 
as is reasonably available to the applicant on the following: 
 
(i) information demonstrating that the re quest is made on behalf of the domestic 
industry as defined under paragraph 4 of Ar ticle 5 at the time of the request;  
 (ii) the identity of each known exporter or foreign producer, which has been covered by 
the measure under review; 
 (iii) information on the current normal value of the product in question, and the current 
export prices thereof, or, where appropria te, the current constructed export price 
thereof, and information, where the export price is not available, on the prices at 
which the product is sold from the country or countries of origin or export to a third 
country or countries and the prices in the country of origin or export; 
 (iv) information on the likely trend of normal value, and likely trend of export price, or 
where appropriate of the likely constructed export price thereof, if the duty expires; 
and 
 
(v) information on the likely impact of the likely dumped imports on the domestic 
industry, as demonstrated by relevant factors and indices, such as those listed in subparagraph 3.3.1. 
 
11.3.4.1  [Accuracy Check]  The authorities sha ll examine the accuracy and adequacy 
of the evidence provided in the requ est to determine whether there is 
sufficient evidence to justify the initiation of a review under this paragraph. 
 
11.3.5 [Expected export price]  Notwithstanding th e provisions of subparagraph 3.2.1, the 
authorities shall allow exporters or producers subject to a review under this paragraph 
to submit the expected price at which the product would be exported by the exporter or 
producer to the importing Member if the definitive anti-dumping duty in force were to 
be terminated (referred in this paragraph as “expected export price”), substantiated by 
relevant information relati ng to its past performance
8, provided that such expected 
export price is not less than the normal valu e in the most recent one year period (or the 
normal value found in the most recent proceed ing, including a review under Article 9, a 
review under paragraph 2 of this Article if  that review has covered dumping, or the 
original investigation, whichever is most recent). 9 
 11.3.5.1 [Suspension of the duty]   In cases where the exporter or producer submit the 
expected export price, the imposition of the definitive anti-dumping duty 
shall be suspended for [Y] months unl ess the authorities determine, based on 
relevant information relating to the past performance of the exporter or 
producer, that the actual level of the expo rt price after the suspension of the 
anti-dumping duty is not likely to be at or above the level of the expected 
                                                     
 
 8 One example of such relevant information would be the export price of the like product by the 
exporter or producer to a third country. 
 9 This shall not be interpreted th at the exporter or producer must  provide the necessary evidence 
regarding normal value in cases where the authorities have already obtained such evidence from previous 
proceedings. TN/RL/GEN/104 
Page 6  
 
  export price
10,11 or the authorities determine, based on an evaluation of the 
factors in subparagraph 3.2.1, that the expiry of the duty would not be likely to lead to continuation or recurrence of dumping (in which case the anti-
dumping measure shall be terminated  pursuant to subparagraph 3.2.). 
 11.3.5.2 [Likelihood determination in a suspensi on case]   When the imposition of the 
definitive anti-dumping duty has been suspended pursuant to 
subparagraph 3.5.1, the authorities may require the exporter or producer to 
provide information relevant to the actual export price for a period of [Z] months after the suspension. The author ities may determine that the expiry of 
the duty is likely to lead to continuation or recurrence of dumping only if the weighted average actual export price for th at period is less than the expected 
export price, in which case anti-dumping duties may be levied retroactively 
for the period of the suspension of the anti-dumping measure, provided that the authorities determine, pursuant to subparagraph 3.3, that the expiry of the duty would be likely to lead to continuation or recurrence of injury to the 
domestic industry.  
 
__________ 
  
                                                     
 
 10 We are willing to have further discussion on possible criteria on which such determination shall be 
made. 
 11 If the authorities determine that the actual level of  the export price after the suspension of the anti-
dumping duty is not likely to be at or above the level of the expected export price, the authorities shall disclose positive evidence which have led them to such determination and shall provide the exporter or producer an 
ample opportunity to make comments thereon.