WORLD TRADE  
ORGANIZATION  G/ADP/AHG/W/180 
1 May 2009 
 (09-2115) 
Committee on Anti-Dumping Practices 
Working Group on Implementation Original:   English 
 
 
 
EXPORT PRICES TO THIRD COUNTRIES OR CONSTRUCTED  
NORMAL VALUE – ARTICLE 2.2 
 
Communication from Egypt  
 
  The following communication, dated 30 April 2009,  is being circulated at the request of the 
Delegation of Egypt.    
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  Further to the decision of the Committee on Anti-Dumping Practices to examine additional 
topics for discussion as noted in document G/ADP/W/ 433, Egypt is pleased to submit the following 
paper as a contribution to the discussion relati ng to the implementation of Article 2.2 on how 
Members decide when to use export prices to th ird countries and when to  use constructed normal 
value?    
Article 2.2 of the Anti-Dumping Agreement  
  Under Article 2.2 of the Anti-Dumping Agreement, " when there are no sales of the like 
product in the ordinary course of trade in the domestic market of the exporting country or when, 
because of the particular market situation or the low volume of the sales in the domestic market of the 
exporting country, such sales do not permit a  proper comparison " the dumping margin may be 
determined " by comparison with a comparable price of  the like product when exported to an 
appropriate third country, provided t hat this price is representative, or with the cost of production in 
the country of origin plus a reasonable amount for administrative, selling and general costs and for 
profits ".   
 
The Egyptian legislative framework 
  The Regulation of Law no. 161/1998 Concer ning the Protection of the National Economy 
from Injurious Effects of Unfair Practices in Inte rnational Trade (the "Regulation") governs anti-
dumping proceedings in Egypt.  Article 32 thereof provides, in part:    
"Normal value shall be the price paid for the like goods in the ordinary course of 
trade for home consumption in the country of  origin/export or the cost of production 
plus the selling, general and administrati ve costs in addition to the amount of profit 
normally realised on sales of goods or the price at which the like product is exported 
to a third country." G/ADP/AHG/W/180 
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   Article 34 of the Regulation further stipulates:   
 
"The normal value shall be constructed a ccording to the cost of production in the 
country of origin plus an appropriate am ount for selling, general and administrative 
costs and a reasonable margin of profit, or  according to the export price of the 
goods to a third country in the following cases:   
 
1- where there is no sales in the domes tic market of the country of export or 
where domestic sales are made at a loss. 
 
2-  where domestic sales of the subject goods account for less than five percent 
of the export sales to Egypt." 
 The practice of the Investigating Authority 
  Pursuant to the Regulation and the Anti-Dump ing Agreement, the Investigating Authority 
must, whenever possible, base the normal value on the prices of the product concerned destined for 
consumption in the exporting country.  The Investiga ting Authority only resorts to use export prices to 
a third country or to construct the normal value when the volume of sales of the like product in the 
ordinary course of trade in the domestic market of the exporting country is not sufficiently representative or when, because of the low volume of  sales in the domestic market of the exporting 
country, such sales do not permit a proper comparison.   The volume of domestic sales in the ordinary 
course of trade in the exporting country is cons idered as not sufficiently representative when it 
accounts for less than 10 percent of the total domestic sales volume.   Domestic sales in the ordinary 
course of trade are considered not to permit a pr oper comparison when they account for less than 
five per cent of the volume of exports to Egypt.   
 
 When it's not in a position to base the nor mal value on domestic selling prices in the 
exporting country, the Investigating Authority is no t required to use one of the alternative normal 
value determination methods over the other.  It can decide to either construct the normal value or to 
base it on export prices to a third country.  Howe ver, the Investigating Au thority gene rally gives 
preference to a constructed normal value ove r a normal value based on export prices to a 
third country, since it considers that such a nor mal value better reflects conditions in the exporting 
country and gives rise to less practical difficulties.     In the past, the Investigating Authority only decided to base the normal value on export prices 
to a third country when, because of the absen ce of cooperation from producers in the exporting 
country, it had no other option.  In order to determ ine the appropriate third country and ensure that 
export prices to the third country were comparab le, the Investigating Authority considered the 
following factors:    
- the representativeness of export sales to the appr opriate third country:  As a general rule, 
export sales to the third country should account for at least five percent of the volume of 
exports to Egypt;   
 
- the similarity of the product concerned.   The product concerned exported to the 
appropriate third country is identical or very  similar to the product concerned exported to 
Egypt;  and, 
 
- the similarity of the third country.  Where possible, the appropriate third country should 
be similar to the exporting country so as to ensure that it is suitable for the establishment 
of a fair dumping margin.   
  G/ADP/AHG/W/180 
 Page 3 
 
 
  Because of the absence of cooperation from producers in the exporting country, it has often 
been difficult for the Investigating Authority to determine the similarity of the product concerned 
exported to Egypt and to the selected third country.  Also, the Investigating Authority has often been unable to determine whether or not exports to the sel ected third country were made at dumped prices.   
   
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