WORLD TRADE  
ORGANIZATION  TN/RL/GEN/76 
17 October 2005 
 (05-4746) 
Negotiating Group on Rules Original:   Spanish 
  
 
PRICE UNDERTAKINGS 
 
Communication from Mexico
 
  
 The following communication, dated 13 October 2005, is being circulated at the request of 
the delegation of Mexico.   The submitting delegation has requested that  this paper, which was submitted to the 
Negotiating Group on Rules as an informal document (J OB(05)/250), also be circulated as a formal 
document. 
 
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 The proposal contained in this document does not represent a final position and may be 
subject to further additions and/or ame ndments in the course of the negotiations. 
 
Object 
 Once an anti-dumping investigation has been in itiated, trade in the goods being investigated 
becomes seriously affected and, hence, the interests of exporters are also affected.  This situation is 
exacerbated if provisional anti-dumping duties are imposed.  Nevertheless, the Anti-Dumping 
Agreement contains an alternative solution that  has been little used, namely, price undertakings, 
which could be improved to the benefit of all the WTO's Members.   
Background 
 Price undertakings enable foreign producers and exporters to modify their behaviour by 
eliminating the dumping that is causing or threatening to cause injury to the domestic industry and so 
avoid imposition of definitive anti-dumping duties.  If the undertakings are accepted, they allow fair 
competition in the importing Member's market.     We therefore consider it necessary to define cl ear rules on the exporter's right to offer price 
undertakings, as well as the requirements for thei r acceptance by the investigating authority. 
 
Problem with the current text of the Anti-Dumping Agreement 
 Article 8 of the Anti-Dumping Agreement does not define precisely the requirements and 
procedures for acceptance of a price undertaking by the investigating authority, which means that 
there is a broad measure of discretion in the acceptance process and, so metimes, the proposed 
undertaking is rejected.   Some investigating authorities consider price undertakings to be an exception to their usual 
practice and do not think that they provide adequate protection against unfair imports;  or else they lay TN/RL/GEN/76 
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 down requirements that exceed those in the Anti-Dumping Agreement, thus making it difficult to 
offer and accept such undertakings.  
Proposed amendments 
 In this regard, we should consider that the fact that the exporter eliminates the dumping and 
its harmful effects allows health y competition among economic agents. 
  A transparent procedure for acceptance or rejection of the price undertaking by the 
investigating authority needs to be established,  avoiding ambiguous provisions that allow a broad 
measure of discretion. 
 
 It should be clearly stated that investigating authority may not require, as a condition for acceptance, that a price undertaking be submitted by a specified number of exporters or by a majority of them.  
 The investigating authority should be require d to explain the reasons for rejecting an 
undertaking and also to give the exporter an opportunity to make comments and, where applicable, reformulate its proposal so that it can be consider ed anew by the investigating authority prior to 
imposing a definitive anti-dumping duty.   Before declaring that a price undertaking has b een terminated and then applying anti-dumping 
duties, the investigating authority should be requi red to notify the exporter concerned, giving it the 
opportunity to make comments and, where applicable , remedy any omissions or errors encountered. 
  This document takes into account proposals and comments by other Members.
1 
 
Proposed Amendments to the Anti-Dumping Agreement 
 
(The new text is underlined and the text to be deleted is crossed out) 
 
Article 8 – Price Undertakings 
 8.1 Proceedings may
2 be suspended or terminated without the imposition of provisional measures 
or anti-dumping duties upon receipt of  satisfactory voluntary undertakings3 from any exporter to 
revise its prices or to cease exports to the area in que stion at dumped prices so that the authorities are 
satisfied that the injurious effect of the dum ping is eliminated.  Price increases under such 
undertakings shall not be higher than necessary to el iminate the margin of dumping determined for the 
said exporter .  It is de sirable that  Pursuant to Article 9.1 , the price increases shall  be less than the 
margin of dumping if such increases would be adequa te to remove the injury to the domestic industry. 
 8.2 Price undertakings shall not be sought or accepted from exporters unless the authorities of the importing Member have made a preliminary affirm ative determination of dumping and injury caused 
by such dumping.  Prior to making such a determin ation, the authorities shall inform the exporters of 
their right to offer price undertakings, as well as of  the provisions on the applicable legal procedures 
and time-limits . 
                                                      
1 TN/RL/W/10, TN/RL/W/26, TN/RL/W/31, TN/RL/W/47, TN/RL/W/66, TN/RL/W/81, 
TN/RL/W/99, TN/RL/W/118 and TN/RL/W/ 144, TN/RL/GEN/2 and JOB(05)/79. 
2 The word "may" shall not be interpreted to allow the simultaneous continuation of proceedings with 
the implementation of price undertakings except as provided in paragraph 4. 
3 The word "satisfactory" may not be interpreted to mean that an undertaking must be submitted by 
"all" exporters of the product investigated to the importing Member or by a majority of them .  TN/RL/GEN/76 
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8.3 Acceptance or rejection of a price undert aking shall be based on its own merits.  The 
authorities may not require as a condition for its acc eptance that the undertaking be submitted by all 
exporters, by a majority of them or by a specific group of exporters.  Likewise, it shall not be a 
justified reason to reject  the undertakings offered need not be acce pted if the authorities consider their 
acceptance impractica l, for example, if  that the number of actual or potential exporters is too great, or 
for other reasons, including  reasons of general policy.  Should the case arise and where practicable, 
The authorities shall provide to the exporter the r easons which have led them to consider acceptance 
of an undertaking as inappropriate, and shall to the extent possible,  give the exporter an opportunity to 
make comments thereon and to reformulate its proposal . 
 
8.4 If an undertaking is accepted, the investigati on of dumping and injury shall nevertheless be 
completed if the exporter so desires or the author ities so decide.  In such a case, if a negative 
determination of dumping or injury is made, the unde rtaking shall automatically lapse, except in cases 
where such a determination is due in large part to the existence of a price undertaking.  In such cases, 
the authorities may require that an undertaking be ma intained for a reasonable period consistent with 
the provisions of this Agreement.  In the event that an affirmative determination of dumping and 
injury is made, the undertaking shall continue cons istent with its terms and the provisions of this 
Agreement.  8.5 Price undertakings may be suggested by the authorities of the importing Member, but no 
exporter shall be forced to enter into such undertak ings.  The fact that exporters do not offer such 
undertakings, or do not accept an invitation to do so, shall in no way prejudice the consideration of the case.  However, the authorities are free to determine that a threat of injury is more likely to be realized 
if the dumped imports continue.  
8.6 Authorities of an importing Member may requi re any exporter from whom an undertaking has 
been accepted to provide periodically information re levant to the fulfilment of such an undertaking 
and to permit verification of pertinent data.  In case of violation of an undertaking, the authorities of 
the importing Member shall notify the exporter concer ned and shall give it an opportunity to make 
comments and remedy errors or omissions.  Nevertheless, when the authorities determine4 that the 
exporter concerned has failed to comply  with the terms of the undertaking , they may take, under this 
Agreement in conformity with its provisions, e xpeditious actions which may constitute immediate 
application of provisional measures using the best information available.  In such cases, definitive 
duties may be levied in accordance with this Agreement on products ente red for consumption not 
more than 90 days before the application of such provisional measures,  except that any such 
retroactive assessment shall not apply to imports entered before the violation of the undertaking. 
 
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4 The authorities shall exercise special care when exam ining failure to comply with a price undertaking 
in order to prevent its termination .