WORLD TRADE  
ORGANIZATION  TN/RL/W/223 
12 March 2008 
 (08-1090) 
Negotiating Group on Rules Original:   English 
   
CAUSATION 
 
Communication from Hong Kong, China;  Japan;  Korea, Rep. of; 
  
Norway;  Switzerland;  and the Separate Customs Territory  
of Taiwan, Penghu, Kinmen and Matsu  
   The following communication, dated 10 March 2008, is being circulated at the request of the 
Delegations of Hong Kong, China;  Japan;  Korea, Re p. of;  Norway;  Switzerland;  and the Separate 
Customs Territory of Taiwan, Penghu, Kinmen and Matsu.    
_______________ 
 
 
 The Delegations of Hong Kong, China;  Japan;  Korea, Rep. of;  Norway;  Switzerland;  and 
the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu present this Working 
Document concerning the issue of "Causation" und er the Anti-Dumping Agreement (ADA).  This 
paper analyses the Rules Chair's text (TN/RL/W/213) on this issue as a contribution to the discussions 
in the Negotiating Group.  It includes alternatives to  the Chair's text.  This submission is without 
prejudice to the views we may have on other parts of  the text.  We reserve the right to modify or 
further refine this document, or co-sponsor it with other Members at a later stage.
1   
 
                                                      
1 This paper builds upon a paper submitted to the Negotiating Group as a room document in 
January 2008. TN/RL/W/223 
Page 2  
 
  I. INTRODUCTION 
 We listened to the discussion in the Negotia ting Group in December 2007 and January 2008 
and recognized that the vast majority of Members found the Chair's text (TN/RL/W/213) unbalanced.  
The issue of causation is one of a number of issues identified by Members that must be addressed in 
the negotiations.  We believe that the following ame ndments to the Chair's text should be the basis for 
further negotiations regarding the causation issue.   
 
II. DISCUSSION 
 In this paper, we will analyze the issue of cau sation both in the context of the systemic nature 
of this negotiation and with reference to specific i ssues that arise in connection with this issue.   
 1. Systemic Issue 
 Some Members argue that the starting point fo r assessing proposed chang es in the Chair's text 
should be the text of the ADA and the bala nce struck by Members in the Uruguay Round 
negotiations.  They allege that in terpretations by the Appellate Body may not be the starting point of 
this negotiation.  We share the vi ew that the DDA is intended to im prove the text of the ADA based 
on the negotiations of Members, and is not tasked with the interpretative functions of the Dispute 
Settlement Body ("DSB").   
  We cannot ignore, however, the important func tion that the DSB has pe rformed to date in 
rendering interpretations based on the Members' inte ntions.  The Appellate Body and panels have 
made tremendous efforts to clarify the meaning of the current texts of the WTO Agreements, 
including the ADA.  The ADA contains various discip lines, either implicitly or in the overall context 
of the Agreement.  All WTO Members, not just the parties to particular disputes, have benefited from 
clarifications of the Members' intentions made by the Appellate Body and panels, and have relied 
upon them in improving their domestic laws and practices in order to be in conformity with the ADA.  
In this manner, disciplines in the ADA have been  clarified and given real effect in actual 
AD proceedings and measures.  It is therefore reasonable that the starting point of the DDA 
negotiation is the text of the ADA as clarified by the DSB reflecting the outcome of the previous 
negotiations in the Uruguay Round.    
 We appreciate the Chair's effort to reflect th e Members' views in the proposed amendments to 
the ADA.  We regret, however, that the Chair's text falls short of precise recognition of the disciplines 
in the current text of Article 3.5, as agreed  among WTO Members in the Uruguay Round and as 
correctly clarified by the Appellate Body and pane ls.  The Chair's text instead deviates from those 
disciplines.  The text attempts to accommodate criticisms by some Members which are aimed at insufficiently explicit language in Article 3.5, and to reflect a single Member's practice and its 
domestic concerns, even though that practice may not be completely in conformity with the current 
text.  As a consequence, the Chair's text reverts back to the pre-Uruguay Round era, ignoring the fact 
that the vast majority of Members implemented the disciplines of Article 3.5 into their practice during 
the last decade.  The Chair's text must restore the disciplines of the current Article 3.5 and then clarify 
and improve those disciplines.    2. Specific Issues on Causation 
 In the Chair's text, the following problems have to be addressed.   
 
 First, Article 3.5 sets forth the so-called non-attribution rule whereby authorities may not 
attribute injurious effects of other factors to th e dumped imports.  The provisions of this Article 
further require that the effects of the dumped imports on the domestic industry must be analysed  TN/RL/W/223 
 Page 3 
 
 
  separately from the effects of other known factors.  This provision reflects the ADA's recognition that 
the domestic industry may have been injured simult aneously by several factors -- for example, by 
contraction of the market and technological innova tion, as well as by the dumped imports.  Together 
with this non-attribution rule and the first senten ce of Article 3.5, the authorities are required to 
determine whether the effects of dumped imports, not the effects of other factors, cause material injury to the domestic industry.   
 
 As the United State correctly noted  in its submission on this issue
2, the Appellate Body3 
clarified the WTO Members' agreement on the following points:   
 
• when dumped imports and other known factors are injuring the domestic industry at the 
same time, authorities "must appropriately assess the injurious effects of those other 
factors"4;   
• "such an assessment must involve separating and distinguishing the injurious effects of 
the other factors from the injurious effects of the dumped imports"5;  and 
• "the particular methods and approaches by which WTO Members choose to carry out the 
process of separating and distinguishing the injurious effects of dumped imports from the injurious effects of the other known causal factors are not prescribed by the Anti-
Dumping Agreement ".
6 
 
 We recall that the DDA is aimed at "c larifying and improving disciplines under the 
Agreements on Implementation of  Article VI of the GATT 1994".7  Improvement of the disciplines 
regarding the non-attribution rule in Article 3.5 is a key issue before the Rules Negotiating Group.  In 
this regard, we cannot understa nd why the Chair's text proposes to water down this rule, making it 
non-mandatory through the words " should seek to separate and distinguish"8 rather than " shall  
separate and distinguish".    
 Second, we understand that the key question for clarification and improvement of the 
discipline of the non-attribution rule is the analy tical methodology that the authorities may use.  As 
discussed above, the Appellate Body has stated that the current provisions of the ADA do not provide 
any particular methodologies for the non-attribution determination.  DSB pane ls have consequently 
rendered conflicting decisions.  In the context of  Article 15.5 of the SCM Agreement, which is 
parallel to Article 3.5 of the ADA, a panel indicated  that the non-attribution rule does not require the 
quantification of effects of other factors.
9  In the almost identical factual setting, another panel found 
that "an investigating authority must make a better effort to quantify the impact of other known factors, relative to subsidized imports".
10  We note that the Appellate Body has never stated that a 
quantitative analysis is required.  Criticism aime d at the Appellate Body is therefore misplaced.11  
                                                      
2 See TN/RL/GEN/128 and TN/RL/GEN/59.    
3 Appellate Body report, United States – Anti-Dumping Measures on Certain Hot-Rolled Steel 
Products from Japan ("US – Hot-Rolled Steed") , WT/DS184/AB/R, adopted on 23 August 2001.  The Appellate 
Body re-affirmed its clarification in European Communities – Anti-Dumping Duties on Malleable Cast Iron 
Tubes or Pipe Fittings from Brazil, WT/DS219/AB/R, para 189, adopted 18 August 2003.   
4 Appellate Body report, US – Hot-Rolled Steel, para. 223.   
5 Ibid.   
6 Ibid., para. 224.   
7 Ministerial Declaration, adopted 14 November 2001, WT/MIN(01)/DEC/1, para. 28.   
8 Article 3.5, Page 8, TN/RL/W/213 (emphasis added).   
9 See Panel Report, US – Countervailing Duty Investigation on DRAMs , WT/DS296/R, para 7.360.   
10 Panel Report, EC – Countervailing Measures on DRAM Chips,  WT/DS299/R, para 7.405.   
11 In fact, one Member's own national court rulin g obliges the Member's authority to provide a 
quantitative explanation based on trade data in the injury determination ( Bratsk Aluminum Smelter v. 
United States, the US Court of Appeals for the Federal Circuit ).   TN/RL/W/223 
Page 4  
 
  This outstanding issue has been pointed out by  several Members in a positive way to solve it.
12  We 
regret that the Chair's text neglected those effo rts and only addressed specific concerns of a few 
Members.   
 
 Indeed, several Members have been constructiv ely engaged in the discussion.  In the Rules 
Negotiating Meeting, it was indicated:   
 
It might be difficult, in most cases, to quantify precisely the degree to which 
dumped imports have contributed to the in jury being experienced by the domestic 
industry relative to the effects of other f actors.  Thus, our proposal is not intended 
to require authorities to precisely and sci entifically quantify the impact of the 
dumped imports alone on the domestic industry.  Such an analysis might have to 
rely on qualitative information or less th an perfect quantitative information or 
estimates based on such information.  Neve rtheless, they must give a reasoned and 
adequate explanation of how they determ ine whether the dumped imports in and of 
themselves are causing material injury and what evidence was analyzed in reaching 
the conclusion.13   
 
The Chair's text should be modified in order to cl arify and improve the disciplines in the current text 
of the ADA and to balance the views of the Members. 
 
III. PROPOSED AMENDMENTS TO CHAIR'S TEXT 
 We propose that the Chair's text of Article 3.5 be amended as follows:   
 
3.5 It must be demonstrated that the dumped im ports are, through the effects of dumping, as set 
forth in paragraphs 2 and 4, causing injury within the meaning of this Agreement.  The demonstration 
of a causal relationship between the dumped imports and the injury to the domestic industry shall be 
based on an examination of all relevant evidence be fore the authorities.  The authorities shall also 
examine any known factors other than the dumped im ports which at the same time are injuring the 
domestic industry, and the injurious e ffects of these other factors must not be attributed to the dumped 
imports.12  The authorities shall separate and distinguish the injurious effects of such other factors 
from the injurious effects of dumped imports.  To the extent that a quantitative analysis is 
impracticable, t The examination required by this paragra ph may be based on a qualitative analysis of 
evidence concerning, inter alia , the nature, extent, geographic concentration, and timing of such 
injurious effects.  While the authorities should seek to  separate and distinguish the injurious effects of 
such other factors from the injurious effects of du mped imports, they need not quantify the injurious 
effects attrib utable to dumped imports and to other factors, nor weigh the injurious effects of dumped 
imports against those of other factors.   
 
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12   Factors which may be relevant in this respect include, inter alia , the volume and prices of 
imports not sold at dumping prices, 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 the export performance and productivity of the domestic industry.
 
 
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12 See TN/RL/GEN/28, TN/RL/GEN/38, and TN/RL/GEN/42.   
13 TN/RL/GEN/38.