. /.   WORLD TRADE  
ORGANIZATION  TN/RL/GEN/161 
4 December 2009 
 (09-6219) 
Negotiating Group on Rules Original:   English 
  
 
PRE-INITIATION CONSULTATIONS
 IN COUNTERVAILING  
DUTY INVESTIGATIONS 
 
Communication from China  
 
 
The following communication, dated 30 November 2 009, is being circulated at the request of 
the Delegation of China.  
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  China presents this proposal concerning the issue of pre-initiation consultations under the 
SCM Agreement.     Note
:  This proposal is without prejudice to th e views or positions China may have on other 
parts of the text or has expressed or may express in the future in any WTO body.  
 
I. INTRODUCTION 
 
 Before the initiation of a countervailing duty i nvestigation, exporting Members that may be 
subject to such investigation sha ll per Article 13.1 SCM Agreement be  invited for consultations with 
the importing Member with the aim of clarifying the situation as to the matters in Article 13.2 
(information in the written application) and arriving at a mutually agreed solution.  China considers 
that this obligation is insufficiently precise as a result of which various problems have arisen in 
practice.  These problems significantly undermine the effectiveness of pre-initiation consultations. 
 
 Firstly, it has happened that prior to the initiati on of the countervailing duty investigation, the 
notification provided by the investigating authoriti es to the interested Members was incomplete.  In 
particular, the names and details of some alle ged subsidy programmes ar e often inaccurate, and 
certain allegations are not supported by any eviden ce nor fully explained.  Moreover, in case of 
investigations initiated at the initiative of the i nvestigating authorities, the authorities are often 
reluctant to fully disclose the names of the alle ged subsidy programmes a nd any relevant evidence 
concerning the existence of such programmes.  Th e resulting lack of detailed information prevents 
responding Members from properly analyzing the a lleged subsidy programmes and their impact 
before consultations are held.  
 Secondly, the pre-initiation examination period depends on the national laws and regulations 
of WTO Members and therefore varies from Member to Member.  Under certain Members' national legislation, the investigation must be initiated with in 20 days from receipt of the written application.  
In such cases, the authorities often send an invitation to consult 15 days prior to the date of initiation 
of the investigation along with the request to conduct the consultations within one week.  Such a short 
time period provides insufficient time for the r esponding Member to analyze the application and 
collect relevant information regardi ng the alleged subsidy programmes.  
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   Thirdly, the explanations, clarifications, evidentiary materials, claims, and arguments 
provided by the responding Member during the pre-initiation consultations are sometimes ignored by the investigating authorities.  This essentially makes the consultations’ requirement under the SCM 
Agreement meaningless.  II. PROPOSED TEXTUAL AMENDM ENT TO THE SCM AGREEMENT  
 
 China therefore proposes to amend Article 13.1 to read as follows: 
 
13.1 As soon as possible after an applica tion under Article 11 is accepted, and in 
any event before the initiation of any inv estigation, Members the products of which 
may be subject to such investigation shall be  invited for consultations with the aim of 
clarifying the situation as to the matters re ferred to in paragraph 2 of Article 11 and 
arriving at a mutually agreed solution.  The invitation to consult shall identify the 
names and legal bases, if any, of all alle ged subsidy programmes and make available 
any other documentary evidence in possession of the investigating authorities.  The 
investigating authorities shall accord suffici ent time to the interested Members to 
enable those Members to meaningfully prep are for the consultations.  Furthermore, 
the investigating authorities shall fully cons ider the points raised  by the interested 
Members during consultations and provide a written reply after the consultations but 
before initiation of the investigation.  Su ch a written reply shall be part of the 
administrative record . 
 
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