. /.   WORLD TRADE  
ORGANIZATION  TN/RL/GEN/122/Rev.1 
6 June 2006 
 
 (06-2670) 
Negotiating Group on Rules Original:   English 
  
 
PROPOSAL ON MATERIAL RETARDATION 
 
Communication from Egypt
 
 
Revision  
 
 
 The following communication, dated 1 June 2006, is being circulated at the request of the Delegation of Egypt. 
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Egypt greatly benefited from the comments on its proposal (TN/RL/GEN/122) on material 
retardation that were made at th e last meeting of the Negotiating Group on Rules.  Egypt continues to 
consider that it is essential to define the concept of “ material retardation ” in terms similar to the concepts 
of “material injury ” and “ threat of material injury ”, in particular, to ensure that developing country 
Members are in a position to protect their domestic industries against dumping practices that have not 
resulted in material injury or threat thereof, w ithin the meaning of Article 3 of the Anti-Dumping 
Agreement.  
 Taking into account the remarks and suggestions by Members, Egypt has made the following 
additions/revisions to its earlier proposal on material retardation: 
 
- The definition of the notion of “ establishment of a domestic industry ” is the key to the 
determination of the type injury suffered by a domestic industry.  Egypt continues to consider 
that the concept of material retardation should not be limited to newly established industries but 
should also apply to embryonic industries, whic h have not previously been developed on a 
commercial scale or to industries that are facing a “new start”.  Material retardation must serve 
to address forms of injury that cannot be properly addressed under the current version of Article 3.  In order to strictly define the notion of “d omestic industry in the process of establishment”, it 
is proposed to introduce a reference to the substantial commitment made by the domestic 
industry to achieve reasonable commercially viable production or sustainable business 
operations; 
 - In addition, in order to ensure that material retardation determinations are based on facts, the 
insertion of a provision similar to that of the first sentence of Article 3.7 is proposed. Investigating authorities shall ensure that a fi nding of material retardation is not based “ merely 
on allegation, conjecture or remote possibility ”.  In reaching their conclusions, investigating 
authorities may consider, feasibility studies,  investment plans and market studies; 
 - Finally, with respect to standing determinations  in material retardation cases, Egypt proposes to 
require that existing production capacity be examined for companies which already have 
completed installing their production equipmen t and that projected production capacity be 
considered for companies which have not comp leted such installation.  In line with the 
provisions of the proposed Article 3.9, project ed production capacity could be determined on 
the basis of, amongst other elements, feasibility studies and investment plans. TN/RL/GEN/122/Rev.1 
Page 2  
 
   
Proposed Changes in footnote 9 
 
 In view of the foregoing, it is proposed to amend footnote 9 of the Anti-Dumping Agreement as follows: 
 
Under this Agreement the term "injury" shall,  unless otherwise specified, be taken to mean 
material injury to a domestic industry, threat of ma terial injury to a domestic industry or material 
retardation of the establishment of such an indu stry and shall be interpreted in accordance with 
the provisions of this Article.  A domestic indus try shall be considered in establishment when it 
has made a substantial commitment to achieve  reasonable commercially viable production or 
sustainable business operations.  
 
Proposed Changes in Article 3   
 It is proposed to add the following Article 3.9:  
 
A determination of material retardation shall be  based on facts and not merely on allegation, 
conjecture or remote possibility.  In making a de termination regarding the existence of material 
retardation, the authorities may consider feasibility  studies, investment plans or market studies to 
examine, inter alia , such factors as:  
 
(i) capacity utilisation;   
 
(ii) delays in the start of reasonable commercial production; and  
 
 (iii) the amount of domestic production as compared to the size of the domestic market.  
 
Proposed Changes in Article 5.4  
 
 For the reasons mentioned above, it is proposed to amend Article 5.4 as follows: 
 
An investigation shall not be initiated pursu ant to paragraph 1 unless the authorities have 
determined, on the basis of an examination of the degree of support for, or opposition to, the application expressed
13 by domestic producers of the like product, that the application has been 
made by or on behalf of the domestic industry.14  The application shall be considered to have 
been made "by or on behalf of the domestic industry" if it is supported by those domestic 
producers whose collective output constitutes more than 50 per cent of the total production of the 
like product produced by that portion of the dom estic industry expressing either support for or 
opposition to the application.15  However, no investigation shall be initiated when domestic 
producers expressly supporting the application account for less than 25 per cent of total 
production of the like product produced by the domestic industry.  
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 13 In the case of fragmented industries involving an exceptionally large number of producers, authorities 
may determine support and opposition by using statistically valid sampling techniques. 
14 Members are aware that in the te rritory of certain Members employees  of domestic producers of the like 
product or representatives of those employees may make or support an application for an investigation under 
paragraph 1. 
15 If the existence of threat of material retardation is  alleged, the level of support of domestic producers 
shall be determined on the basis of established or projected production capacity.