WORLD TRADE  
ORGANIZATION  TN/RL/W/254 
21 April 2011 
 (11-2059) 
Negotiating Group on Rules  
   
COMMUNICATION FROM THE CHAIRMAN 
 
  On 8 April 2011, the Chairman of the Trade Negotiations Committee informed TNC 
participants that Negotiating Chairs would be ci rculating to all partic ipants documents which 
represent the product of the work in their Negotiating Groups. 
  As the TNC Chair has indicated, and in line with  the stated expectations of delegations, these 
documents are to be bottom-up in nature, and to  reflect convergence achieved but also lack of 
convergence where necessary.  Their objective is to "capture" the current situation in the negotiations.  
I have taken these considerations very much to h eart, as I prepared the attached documents, which 
reflect the state of play in the Rules negotiati ons on the topics of anti-dumping, subsidies and 
countervailing measures and fisheries subsidies (regi onal trade agreements are addressed in a separate 
document.)   The first document relates to anti-dumping.  In this area, I have chosen to prepare a revised 
legal text.  This should not be understood to mean th at I perceive significant signs of convergence on 
the major "political" issues.  To the contrary, it is  noticeable that the new text contains the same 
twelve bracketed issues as the 2008 Chair text.  The 2008 Chair text on anti-dumping does however 
contain extensive un-bracketed language on a wide range of technical but nevertheless important 
issues, and our work over the past two plus years has pointed to a few areas where useful changes to 
that language might be warranted.  In short, therefore, arguably a new text on anti-dumping can 
usefully reflect some limited progress, and in any event it can serve to give a clear idea of where 
things stand.      The second document relates to subsidies and c ountervailing measures.  In this area, I have 
chosen to prepare a report rather than a text for the following reasons.  First, as with anti-dumping, 
there have been no significant signs of convergence on bracketed issues as reflected in the 2008 Chair 
text on subsidies and countervailing measures.  Furt hermore, unlike in the area of anti-dumping the 
amount of un-bracketed text in the area of subsidi es and countervailing measures is limited, and some 
of that language (such as that relating to regulated  pricing and to the role and interpretation of the 
Illustrative List of Export Subsidies) is controvers ial.  And while on certain more technical issues un-
bracketed language has gained some traction, there ar e very few useful changes to be proposed at this 
point.  In the area of transposition of possible changes in anti-dumping provisions to their counterpart CVD provisions, insufficient discussion has occurred to  date to allow the identification of legal 
language reflecting convergence.  Finally, a signifi cant number of substantive new proposals have 
been submitted during the past few months.  Due to time pressure, the Negotiating Group has not yet 
fully explored the degree to which any elements  of convergence can be f ound in respect of these 
proposals.  Thus, I see no advantage to prepar ing a new SCM text at this juncture.   
  The third document relates to fisheries subsidies.  In this area also, I chose to prepare a report 
rather than a text.  As I explain in more detail in the attached report, at present there is too little 
convergence on even the technical issues, and indeed virtually none on the core substantive issues, for 
there to be anything to put into a bottom-up, c onvergence legal text.  And the alternative, a text 
showing all of the proposals as possible "options",  would probably be impossible to produce as one TN/RL/W/254 
Page 2  
 
  text that laid out in a compre hensible manner the full range of separate options; and it would be 
nothing more than a compilation of proposals.  In my view, a detailed and analytical report on the challenges faced in this difficult negotiation will be far more useful as a tool to "capture" the 
negotiations and frame its future work.    
 _______________ 
  TN/RL/W/254 
 Page 3 
 
 
   
AGREEMENT ON IMPLEMENTATION OF ARTICLE VI  
OF THE GENERAL AGREEMENT ON TARIFFS AND TRADE 1994  
 
 
Members hereby agree  as follows: 
  
PART I 
 
Article 1  
 
Principles  
 
 An anti-dumping measure shall be applied on ly under the circumstances provided for in 
Article VI of GATT 1994 and pursuan t to investigations initiated
1 and conducted in accordance with 
the provisions of this Agreement.  The following provisions govern the application of Article VI of GATT 1994 in so far as action is taken under anti-dumping legislation or regulations. 
  
Article 2  
 
Determination of Dumping  
 
2.1 For the purpose of this Agreement, a product is to be considered as being dumped, i.e.  
introduced into the commerce of another country at less than its normal value, if the export price of 
the product exported from one country to another is l ess than the comparable price, in the ordinary 
course of trade, for the like product when destin ed for consumption in the exporting country. 
 2.2 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
2, such sales do not permit a proper 
comparison, the margin of dumping shall be determined by comparison with a comparable price of 
the like product when exported to an appropriate third country, provided that 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.     
 2.2.1 Sales of the like product in the dom estic market of the exporting country or 
sales to a third country at prices below per unit (fixed and variable) costs of production plus  administrative, selling and general costs may be treated as 
not being in the ordinary course of trade by reason of price and may be 
disregarded in determining normal value only if the authorities
3 determine 
                                                      
1 The term "initiated" as used in this Agreement means the procedural action by which a Member 
formally commences an investigation as provided in Article 5. 
2 Sales of the like product destined for consumpti on in the domestic market of the exporting country 
shall normally be considered a sufficient quantity for the determination of the normal value if such sales 
constitute 5 per cent or more of the sales of the produc t under consideration to the importing Member, provided 
that a lower ratio should be acceptable where the evidence demonstrates that  domestic sales at such lower ratio 
are nonetheless of sufficient magnitude to provide for a proper comparison. 
3 When in this Agreement the term "authorities" is used, it shall be interpreted as meaning authorities at 
an appropriate senior level. TN/RL/W/254 
Page 4  
 
  that such sales are made within an extended period of time
4 in substantial 
quantities5 and are at prices which do not provide for the recovery of all costs 
within a reasonable period of time.  If prices which are below per unit costs at 
the time of sale are above weighted average per unit costs for the period of 
investigation, such prices shall be cons idered to provide for recovery of costs 
within a reasonable period of time. 
   2.2.1.1 For the purpose of paragraph 2, costs shall normally be 
calculated on the basis of records kept by the exporter or producer 
under investigation, provided that such records ar e in accordance 
with the generally accepted accounting principles of the exporting 
country and reasonably reflect the costs associated with the production and sale of the product und er consideration.  Authorities 
shall consider all available evidence on the proper allocation of costs, including that which is made available by the exporter or producer in 
the course of the investigation, provided that such allocations do not 
differ from any allocations that have been provided that such 
allocations have be en historically utilized by the exporter or  
producer, in particular in relation to establishing appropriate amortization and depreciation periods and allowances for capital expenditures and other development costs.  Unless already reflected 
in the cost allocations under this  sub-paragraph, costs shall be 
adjusted appropriately for those non-recurring items of cost which benefit future and/or current pr oduction, or for circumstances in 
which costs during the period of investigation are affected by start-up operations.
6 
 
2.2.2 For the purpose of paragraph 2, the amounts for administrative, selling and 
general costs and for profits shall be based on actual data pertaining to production and sales in the ordinary course of trade of the like product by the exporter or producer under investigation.  When such amounts cannot be determined on this basis, the amounts may be determined on the basis of: 
 
 (i) the actual amounts incurred and realized by the exporter or 
producer in question in respect of production and sales in the domestic market of the country of  origin of the same general 
category of products;   
 
 (ii) the weighted average of the actual amounts incurred and 
realized by other exporters or producers subject to investigation in respect of production and sales of the like product in the domestic market of the country of origin;   
 
                                                     
 
4 The extended period of time should normally be one year but shall in no case be less than six months. 
5 Sales below per unit costs are made in substantial quantities when the authorities establish that the 
weighted average selling price of the transactions under consideration for the determination of the normal value 
is below the weighted average per unit costs, or that th e volume of sales below per unit costs represents not less 
than 20 per cent of the volume sold in transactions under consideration for the determination of the normal 
value. 
6 The adjustment made for start-up op erations shall reflect the costs at the end of the start-up period or, 
if that period extends beyond the period of investigation, the most recent costs which can reasonably be taken 
into account by the authorities during the investigation.  TN/RL/W/254 
 Page 5 
 
 
   (iii) any other reasonable method, provided that the amount for 
profit so established shall not exceed the profit normally realized by other exporters or producers on sales of products of the same general category in  the domestic market of the 
country of origin. 
 
2.3 In cases where there is no export price or wh ere it appears to the authorities concerned that 
the export price is unreliable because of association or a compensatory arrangement between the exporter and the importer or a third party, the export price may be constructed on the basis of the price 
at which the imported products are first resold to an independent buyer, or if the products are not 
resold to an independent buyer, or not resold in the condition as imported, on such reasonable basis as 
the authorities may determine.  2.4 A fair comparison shall be made between the export price and the normal value.  This 
comparison shall be made at the same level of trade, normally at the ex-factory level, and in respect of 
sales made at as nearly as possible the same time.  Due allowance shall be made in each case, on its 
merits, for  differences which affect price compar ability, including differences in conditions and terms 
of sale, taxation, levels of trade, quantities, ph ysical characteristics, and any other differences which 
are also demonstrated to affect price comparability.
7  In the cases referred to in paragraph 3, 
allowances for costs, including duties and taxes,  incurred between importation and resale, and for 
profits accruing, should also be made.  If in these cases price comparability has been affected, the 
authorities shall establish the normal value at a level of  trade equivalent to the level of trade of the 
constructed export price, or shall make due a llowance as warranted under this paragraph.  The 
authorities shall indicate to the parties in question what information is necessary to ensure a fair 
comparison and shall not impose an unreasonable burden of proof on those parties.  
2.4.1 When the comparison under paragraph 4 requires a conversion of currencies, 
such conversion should be made using th e rate of exchange on the date of 
sale
8 taken from a source of recognized authority9, provided that when a sale 
of foreign currency on forward markets is directly linked to the export sale involved, the rate of exchange in the fo rward sale shall be used.  Fluctuations 
in exchange rates shall be ignored and in an investigation the authorities shall 
allow exporters at least 60 days to have adjusted their export prices to reflect 
sustained movements in exchange rates during the period of investigation. 
     2.4.1.1 The source of recognized authority normally used, and the 
specific method normally followed by the authorities in applying 
subparagraph 4.1, shall be set fo rth in the laws, regulations or 
publicly available administrative procedures of the Member 
concerned, and their application to each particular case shall be 
transparent and adequately explained.  
    2.4.1.2 If, in a particular case, a Member does not use the source of 
recognized authority or specific method set forth in its laws, 
regulations or publicly available administrative procedures, it shall 
                                                      
7 It is understood that some of the above factors may overlap, and authorities shall ensure that they do 
not duplicate adjustments that have been already made under this provision. 
8 Normally, the date of sale would be the date of contract, purchase order, order confirmation, or 
invoice, whichever establishes the material terms of sale.    
9 Sources of recognized authority may include centra l banks, multilateral financial institutions, widely 
distributed financial journals, or other sources not created primarily for the purpose of conducting anti-dumping  
proceedings.  TN/RL/W/254 
Page 6  
 
  explain, in the relevant public  notices or separate report under 
Article 12, why it did not use such source or method.  
 
2.4.2 Subject to the provisions governing fair comparison in paragraph 4, the 
existence of margins of dumping du ring the investigation phase shall 
normally be established on the basis of a comparison of a weighted average 
normal value with a weighted average of prices of all comparable export 
transactions or by a comparison of normal value and export prices on a transaction-to-transaction basis.  A normal value established on a weighted average basis may be compared to prices of individual export transactions if 
the authorities find a pattern of export prices which differ significantly among 
different purchasers, regions or time periods, and if an explanation is 
provided as to why such differences cannot be taken into account appropriately by the use of a weight ed average-to-weighted average or 
transaction-to-transaction comparison. 
 
[ZEROING:  This issue remains among the most divisive in the anti-dumping 
negotiations, and there have been few sign s of convergence.  Positions range from 
insistence on a total prohibition on zeroing irrespective of the comparison methodology used and in respect of all proceedings to a demand that zeroing be specifically 
authorized in all contexts.  Some delegatio ns however hold more nuanced positions, and 
there is openness among some delegations to undertake a technical examination of this 
issue in particular contexts, such as fo r example the third ("targeted dumping") 
methodology provided for in Article 2.4.2.] 
 
2.4.3 When there are differences within th e product under consideration, such as 
different models, types, grades or technical specifications, the authorities shall 
provide interested parties with timel y opportunities to express their views 
regarding possible categorization and matching for purposes of comparison.  
This shall not prevent the authorities from proceeding expeditiously with the 
investigation.  
 
2.5 In the case where products are not imported directly from the country of origin but are 
exported to the importing Member from an intermedia te country, the price at which the products are 
sold from the country of export to the importing Member shall normally be compared with the comparable price in the country of export.  Howeve r, comparison may be made with the price in the 
country of origin, if, for example, the products are merely transshipped through the country of export, 
or such products are not produced in the country of e xport, or there is no comparable price for them in 
the country of export.  2.6 Throughout this Agreement the term "like pr oduct" ("produit similaire") shall be interpreted 
to mean a product which is identical , i.e. alike in all respects to the product under consideration, or in 
the absence of such a product, another product which, although not alike in all respects, has 
characteristics closely resembling those of the product under consideration. 
 2.7 This Article is without prejudice to the se cond Supplementary Provision to paragraph 1 of 
Article VI in Annex I to GATT 1994.  
  TN/RL/W/254 
 Page 7 
 
 
  Article 3  
 
Determination of Injury10 
 3.1 A determination of injury for purposes of Ar ticle VI of GATT 1994 shall be based on positive 
evidence and involve an objective examination of both (a) the volume of the dumped imports
11 and 
the effect of the dumped imports on prices in  the domestic market for like products, and (b) the 
consequent impact of these imports on domestic producers of such products. 
 3.2 With regard to the volume of the dumped im ports, the investigating authorities shall consider 
whether there has been a significant increase in dumped imports, either in absolute terms or relative to 
production or consumption in the importing Member.  With regard to the effect of the dumped imports on prices, the investigating authorities sha ll consider whether there has been a significant 
price undercutting by the dumped imports as compar ed with the price of a like product of the 
importing Member, or whether the effect of such imports is otherwise to depress prices to a significant 
degree or prevent price increases, which otherwise w ould have occurred, to a significant degree.  No 
one or several of these factors can necessarily give decisive guidance.  3.3 Where imports of a product from more than one country are simultaneously subject to anti-dumping investigations, the investigating auth orities may cumulatively assess the effects of such 
imports only if they determine that (a) the margin of dumping established in relation to the imports 
from each country is more than de minimis  as defined in paragraph 8 of Article 5 and the volume of 
imports from each country is not negligible and (b) a cumulative assessment of the effects of the 
imports is appropriate in light of  the conditions of competition betw een the imported products and the 
conditions of competition between the importe d products and the like domestic product. 
 
3.4 The examination of the impact of the dumped imports on the domestic industry concerned 
shall include an evaluation of all relevant economic  factors and indices having a bearing on the state 
of the industry, including actual and potential d ecline in sales, profits, output, market share, 
productivity, return on investments, or utilization of capacity;  factors affecting domestic prices;  the 
magnitude of the margin of dumping;  actual and potential negative effects on cash flow, inventories, 
employment, wages, growth, ability to raise capital or investments.  This list is not exhaustive, nor can 
one or several of these factors necessarily give decisive guidance. 
 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 injuries caused by these other factors must not be attributed to the dumped imports.  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 competiti on between the foreign and domestic producers, 
developments in technology and the export perfo rmance and productivity of the domestic industry. 
 
                                                     
 
10 Under this Agreement the term "injury" shall, unless otherwise specified, be taken to mean material 
injury to a domestic industry, threat of material injury to a domestic industry or material retardation of the 
establishment of such an industry an d shall be interpreted in accordance wi th the provisions of this Article. 
11 For purposes of a determination of injury under th is Article, imports attributable to any exporter or 
producer for which the authorities determine a margin of dumping of zero or de minimis  shall not be considered 
to be "dumped imports".  TN/RL/W/254 
Page 8  
 
  [CAUSATION OF INJURY:  Delegations conti nue to hold widely diverging views on 
issues relating to causation of injury.   Recent discussions have focused on two issues: whether it should be mandatory to separ ate and distinguish the effects of dumped 
imports and other factors, and the extent to  which authorities should be required to 
conduct a quantitative (as opposed to qualitative) analysis of non-attribution.  Although 
there seems to be a shared view that authorit ies should carefully consider the effects of 
factors other than dumped imports, and en sure they are not attributed to dumped 
imports, there are substantial gaps regarding the degree of precision that can or should 
be required.] 
 3.6 The effect of the dumped imports shall be assessed in relation to the domestic production of 
the like product when available data permit the sep arate identification of that production on the basis 
of such criteria as the production process, producers' sales and profits.  If such separate identification 
of that production is not possible, the effects of the dumped imports shall be assessed by the 
examination of the production of the narrowest gr oup or range of products, which includes the like 
product, for which the necessary information can be provided. 
 3.7 A determination of a threat of material in jury shall be based on facts and not merely on 
allegation, conjecture or remote possibility.  Th e change in circumstances which would create a 
situation in which the dumping would cause injury must be clearly foreseen and imminent.
12  I n  
making a determination regarding the existence of a threat of material injury, the authorities shall 
consider the state of the domestic industry, includi ng an examination of the impact of dumped imports 
upon it in accordance with paragraph 4, in order to establish a background for th e evaluation of threat 
of material injury.  In addition, the authorities should consider, inter alia , such factors as: 
 
(i) a significant rate of increase of dumped imports into the domestic market indicating 
the likelihood of substantially increased importation; 
 
(ii) sufficient freely disposable, or an immi nent, substantial increase in, capacity of the 
exporter indicating the likelihood of substan tially increased dumped exports to the 
importing Member's market, taking into account available evidence concerning  the 
availability of other export markets to absorb any additional exports; 
 
(iii) whether imports are entering at prices that will have a significant depressing or  
suppressing effect on domestic prices, and would likely increase demand for further 
imports;  and 
 
(iv) inventories of the product being investigated. 
 No one of these factors by itself can necessarily give decisive guidance but the totality of the factors 
considered must lead to the conclusion that further dumped exports are imminent and that, unless 
protective action is taken, material injury would occur.  
3.8 With respect to cases where in jury is threatened by dumped  imports, the application of 
anti-dumping measures shall be considered and decided with special care.  
[MATERIAL RETARDATION:  There is a broadly expressed view that the provisions 
of the Agreement regarding material retarda tion would benefit from amplification and 
clarification, and many elements of the 2007 Chair text attract broad support.   There 
are however widely divergent views on th e core issue of when an industry is "in 
                                                     
 
12 One example, though not an  exclusive one, is that there is convincing reason to believe that there will 
be, in the near future, substantially increased importation of the product at dumped prices.  TN/RL/W/254 
 Page 9 
 
 
  establishment".  Most notably, while some delegations consider that an industry might 
still be in establishment even if there was some domestic production, other delegations 
consider that once there is any domestic production an industry is no longer "in 
establishment", and in such cases the proper anal ysis is one of current injury or threat.] 
  
Article 4  
 
Definition of Domestic Industry  
 4.1 For the purposes of this Agreement, and except to the extent otherwise provided in 
Article 5.4, the term "domestic industry" shall be interp reted as referring to the domestic producers as 
a whole of the like products or to those of them whose collective output of the products constitutes a major proportion of the total domestic production of those products, except that:  
(i) when producers are related
13 to the exporters or importers  or are themselves importers 
of the allegedly dumped product, the term "d omestic industry" may be interpreted as 
referring to the rest of the producers14 ; 
 (ii) in exceptional circumstances the territo ry of a Member may, for the production in 
question, be divided into two or more competitive markets and the producers within 
each market may be regarded as a separate industry if (a) the producers within such 
market sell all or almost all of their production of the product in question in that market, and (b) the demand in that market is not to any substantial degree supplied by 
producers of the product in question located elsewhere in the territory.  In such 
circumstances, injury may be found to exis t even where a major portion of the total 
domestic industry is not injured, provided th ere is a concentration of dumped imports 
into such an isolated market and provided further that the dumped imports are causing 
injury to the producers of all or almost all of the production within such market. 
 
[EXCLUSION OF PRODUCERS WHO ARE RELATED TO EXPORTERS OR 
IMPORTERS OR WHO ARE THEMSELVES IMPORTERS:  There are widely 
varying views about the need for criteria gov erning this exclusion, and about the nature 
of any possible criteria.  In particular, some delegations consider that the rules should be precise, reflecting numerical criteria, and directive in nature.  Other delegations believe that any criteria should not be too prescriptive, as the assessment must be case by case.  Yet other delegations do not ex clude such producers and believe that no 
changes to these provisions are necessary.] 
 
4.2 When the domestic industry has been interp reted as referring to the producers in a certain 
area, i.e. a market as defined in paragraph 1(ii), anti-dumping duties shall be levied
15 only on the 
                                                      
13 For the purpose of this paragraph, producers shall be deemed to be related to exporters or importers 
only if (a) one of them directly or indirectly controls the other;  or  (b) both of them are directly or indirectly 
controlled by a third person;  or (c) together they directly or indirectly control a third person, provided that there 
are grounds for believing or suspecting that the effect of the relationship is such as to cause the producer concerned to behave differently from non-related producers.  For the purpose of this paragraph, one shall be 
deemed to control another when the former is legally or operationally in a position to exercise restraint or 
direction over the latter. 
14 The reasons underlying any decision by the au thorities to exclude from  the domestic industry 
producers that are related to the exporters or importers  or are themselves importers of the allegedly dumped 
product shall be explained in the relevant public notices or separate reports required by Article 12.  
15 As used in this Agreement "levy" shall mean the definitive or final legal assessment or collection of a 
duty or tax. TN/RL/W/254 
Page 10  
 
  products in question consigned for fi nal consumption to that area.  When the constitutional law of the 
importing Member does not permit the levying of an ti-dumping duties on such a basis, the importing 
Member may levy the anti-dumping duties without limitation only if (a) the exporters shall have been 
given an opportunity to cease exporting at dumped prices to the area concerned or otherwise give assurances pursuant to Article 8 and adequate assurances in this regard have not been promptly given, 
and (b) such duties cannot be levied only on products  of specific producers which supply the area in 
question.  4.3 Where two or more countries have reached  under the provisions of paragraph 8(a) of 
Article XXIV of GATT 1994 such a level of integrati on that they have the characteristics of a single, 
unified market, the industry in the entire area of in tegration shall be taken to  be the domestic industry 
referred to in paragraph 1.  4.4 The provisions of paragraph 6 of Article  3 shall be applicable to this Article. 
 
 
Article 5  
 
Initiation and Subsequent Investigation  
 
5.1 Except as provided for in paragraph 6, an inv estigation to determine the existence, degree and 
effect of any alleged dumping sh all be initiated upon a written appli cation by or on behalf of the 
domestic industry.  5.2 An application under paragraph 1 shall include evidence of (a) dumping, (b) injury within the 
meaning of Article VI of GATT 1994 as interpreted by this Agreement and (c) a causal link between 
the dumped imports and the alleged injury.  Simple  assertion, unsubstantiated by relevant evidence, 
cannot be considered sufficient to meet the require ments of this paragraph.  The application shall 
contain such information as is reasonably av ailable to the applicant on the following: 
 
(i) (a) 
the identity of the applicant and the domestic industry by or on behalf of which 
the application is made and, where the applicant is itself a producer, a description of 
the volume and value of the domestic production of the like product by the applicant; .  
Where a written application is made on behalf of the domestic industry, the 
application shall identify the industry on beha lf of which the application is made by a 
list of all known domestic p roducers of the like product (or associations of domestic 
producers of the like product) (b) the identity of those producer s (or, to the extent this 
is not practicable in the case of fragme nted industries involving an exceptionally 
large number of producers, associations of domestic producers of the like product) 
supporting the application, and, to the extent possible, a description of  the volume 
and value of domestic production of th e like product accounted for by those such 
producers or associations of producers ;  and (c) the identity of all known domestic 
producers of the like product (or, to the extent  this is not practicable in the case of a 
fragmented industry involving an exceptionally large number of producers, 
associations of domestic producers of the like product) and the total volume and value 
of domestic production of the like product;  
 
(ii) a complete description of the allegedly dumped product, the names of the country or 
countries of origin or export in question,  the identity of each known exporter or 
foreign producer and a list of known pers ons importing the product in question; 
 
(iii) information on prices at which the product in question is sold when destined for 
consumption in the domestic markets of the country or countries of origin or export  TN/RL/W/254 
 Page 11 
 
 
  (or, where appropriate, information on the pr ices at which the product is sold from the 
country or countries of origin or export to a third country or countries, or on the constructed value of the product) and information on export prices or, where 
appropriate, on the prices at which the product is first resold to an independent buyer 
in the territory of the importing Member
16; 
 
(iv) information on the evolution of the vo lume of the allegedly dumped imports, the 
effect of these imports on prices of the like product in the domestic market and the consequent impact of the imports on the domestic industry, as demonstrated by relevant factors and indices having a bearing on the state of the domestic industry, 
such as those listed in paragr aphs 2 and 4 of Article 3. 
 5.3 The authorities shall examine the accuracy and adequacy of the evidence provided in the 
application
17 to determine whether there is sufficien t evidence to justify the initiation of an 
investigation. 
 
5.4 An investigation shall not be initiated pur suant 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 expressed18 by domestic producers of the like product, that the application has been made 
by or on behalf of the domestic industry.19  The application shall be cons idered to have been made "by 
or on behalf of the domestic industry" if it is s upported 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 domestic industry expressing either support for or opposition to the application.  
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.  For the purpose of this para graph, the term "domestic industry" shall be 
interpreted as referring to the domestic producers as a whole of the like product, subject to the 
application of Article 4.1(i) and 4.1(ii).  
 5.5 The authorities shall avoid, unless a decision has been made to initiate an investigation, any 
publicizing of the application for the initiation of an  investigation.  However, after receipt of a 
properly documented application and no later than 15 days before initiating 
before proceeding to 
initiate  an investigation, the authorities shall no tify the government of the exporting Member 
concerned and shall provide it with the full text of  the written application, paying due regard to the 
requirement for the protection of confidential inform ation as provided for in paragraph 5 of Article 6 . 
 5.6 If, in special circumstances,  the authorities concerned decide to initiate an investigation 
without having received a written application by or on behalf of a domestic industry for the initiation 
of such investigation, they shall proceed only if they have sufficient evidence of dumping, injury and 
a causal link, as described in paragraph 2, to  justify the initiation of an investigation. 
 
                                                     
 
16 Including the sources of the information provided and, where relevant, the method used to derive 
prices from that information.  
17 The authorities shall, in particular, review sources  readily available to them, such as publications,  
public records, and materials prepared  by trade associations, with a view to identifying any domestic producers 
of the like product not identified in the application.    
18 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. 
19 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. TN/RL/W/254 
Page 12  
 
  [PRODUCT UNDER CONSIDERATION: While many delegations consider that a 
provision on this issue would be useful, concerns have been expressed that such a provision could have "vertical" as well as "hor izontal" implications (e.g. with respect to 
the inclusion of parts), as well as implicat ions in respect of subsequent proceedings.  
These concerns have caused some delegations  to link this issue to the outcome of 
discussions on anti-circumvention, while ot her delegations reject any such linkage.  
There are also differences of view regarding , inter alia, how broadly the product under 
consideration should be defined, the role of physical and market characteristics in determining the product under consideration, and when and how product under consideration should be determined.] 
 
5.7 The evidence of both dumping and injury shall be considered simultaneously (a) in the 
decision whether or not to initiate an investigation, and (b) thereafter, during the course of the 
investigation, starting on a date not later than the earliest date on which in accordance with the 
provisions of this Agreement prov isional measures may be applied. 
 
5.8 An application under paragraph 1 shall be reje cted and an investigation shall be terminated 
promptly as soon as the authorities concerned are satis fied that there is not sufficient evidence of 
either dumping or of injury to justify proceeding w ith the case.  There shall be immediate termination 
in cases where the authorities determine that the margin of dumping is de minimis , or that the volume 
of dumped imports, actual or potential, or the injury, is negligible.  The margin of dumping shall be 
considered to be de minimis  if this margin is less than 2 per cent, expressed as a percentage of the 
export price.  The volume of dumped imports shall normally be regarded as negligible if the volume 
of dumped imports from a particular country is fou nd to account for less than 3 per cent of imports of 
the like product in the importing Member, unless c ountries which individually account for less than 
3 per cent of the imports of the like product in the importing Member collectively account for more 
than 7 per cent of imports of the like product in the importing Member. 
 5.9 An anti-dumping proceeding shall not hinde r the procedures of customs clearance. 
 5.10 Investigations shall, except in special circumstances, be concluded within one year, and in no 
case more than 18 months, after their initiation. 
 
5.10bis Except where circumstances have changed, the authorities shall not initiate an investigation 
where a previous investigation of the same product from the same Member ini tiated pursuant to this 
Article resulted in a negative final determination within one year prior to the filing of the application.  
If an investigation is initiated in such a case, the authorities shall explain the change in circumstances 
which warrants initiation in the notice of initiation or separate report provided for in Article 12.1.  
  
Article 6  
 
Evidence  
 
6.1 All interested parties in an anti-dumping inves tigation shall be given notice of the information 
which the authorities require and ample opportunity to present in writing all evidence which they consider relevant in respect of the investigation in question.   
 
 6.1.1 new The authorities shall review sources readily available to them, such as 
publications, public records, and materials prepared by trade associations, 
with a view to identifying any exporters or foreign producers of the allegedly 
dumped product not identified in the application.  
  TN/RL/W/254 
 Page 13 
 
 
   6.1.1 Exporters or foreign producers receiving questionnaires used in an 
anti-dumping  investigation shall be given at least 30 days for reply.20,21  Due 
consideration should be  given to any request for an extension of the 30-day 
period and, upon cause shown, such an ex tension should be granted whenever 
practicable. 
 
 6.1.1 bis Within a reasonable period of time after the receipt of the response to a 
questionnaire, the authorities shall make a preliminary analysis of that 
response.  Requests for clarification, or  for additional or missing information,  
shall be directed to the interested pa rty concerned in writing and in sufficient 
time for the authorities to consider timely responses thereto.  
 
6.1.2 Subject to the requirement to pr otect confidential information, evidence 
presented in writing by one interested party shall be made available promptly to other interested parties par ticipating in the investigation. 
 
6.1.3 As soon as an investigation has been  initiated, the authorities shall provide 
the full text of the written application received under paragraph 1 of Article 5 
to the known exporters
22 and to the authorities of the exporting Member and 
shall make it available, upon request, to  other interested parties involved.  
Due regard shall be paid to the require ment for the protection of confidential 
information, as provided for in paragraph 5. 
 6.2 Throughout the anti-dumping investigation all in terested parties shall have a full opportunity 
for the defence of their interests.  To this end,  the authorities shall, on request, provide opportunities 
for all interested parties to meet those parties w ith adverse interests, so that opposing views may be 
presented and rebuttal arguments offered.  Provision of such opportunities must take account of the 
need to preserve confidentiality and of the convenien ce to the parties.  There shall be no obligation on 
any party to attend a meeting, and failure to do so  shall not be prejudicial to that party's case.   
Interested parties shall also have the right, on justification, to present other information orally. 
 6.3 Oral information provided under paragraph 2 shall be taken into account by the authorities 
only in so far as it is subsequently reproduced in  writing and made available to other interested 
parties, as provided for in subparagraph 1.2.  6.4 The authorities shall whenever practicable
 provide timely  opportunities for all interested 
parties to see promptly all information that is relevant to the presentation of their cases, that is non t 
confidential information as defined in p aragraph  5, and that is used by submitted to or obtained by the 
authorities in an anti-dumping investigation, a nd to prepare presentations on the basis of this 
information.  
                                                     
 
20 It is desirable that the authorities not require certif ication of translations by official translators.  
Where such certification is required, exporters or foreign producers shall be given an additional seven days for 
reply.   
21 As a general rule, the time-limit for exporters sh all be counted from the date of receipt of the 
questionnaire, which for this purpose sh all be deemed to have been receive d one week from the date on which it 
was sent to the respondent or transmitted to the appropriate diplomatic representative of the exporting Member 
or, in the case of a separate customs territory Member of the WTO, an official re presentative of the exporting 
territory. 
22 It being understood that, where the number of exporters involved is particularly high, the full text of 
the written application should may instead be provided only to the authorities of the exporting Member or  to the 
relevant trade association, if any.  In such cases, the authorities shall so inform the government of the exporting 
Member . TN/RL/W/254 
Page 14  
 
  6.4bis The authorities shall maintain a file containi ng all non-confidential documents submitted to or 
obtained by the authorities in an anti-dumping pro ceeding, including non-confidential summaries of 
confidential documents and any explanations pr ovided pursuant to Article 6.5.1 as to why 
summarization is not possible, and shall allow interest ed parties to review and copy the documents in 
that file upon request.  Where the proceeding is ong oing or is subject to judicial, arbitral or 
administrative review, access to this file shall be prov ided within five working days of a request.  The 
non-confidential file shall be kept in an organized manner, and a complete i ndex of all documents in 
the possession of the authorities, including confidential documents, shall be included therein.  Each 
file shall include all public notices related to that proceeding issued pursuant to Article 12, as well as 
separate reports issued pursuant to footnote 37 to that Article.  Each file shall be maintained so long as 
the measure to which it relates remains in force.  The authorities shall provide for the copying of 
documents in the non-confidential file at the reasona ble expense of the person so requesting, or shall 
allow, subject to reasonable safeguards, that pers on to remove the documents for copying elsewhere.23   
 6.5 Any information which is by nature confiden tial (for example, because its disclosure would 
be of significant competitive advantage to a competitor or because its disclosure would have a 
significantly adverse effect upon a person supplying the information or upon a person from whom that 
person acquired the information), or which is pr ovided on a confidential basis by parties to an 
investigation shall, upon good cause shown, be treated  as such by the authorities.  Such information 
shall not be disclosed without specific permission of the party submitting it.
24 
 
6.5.1 The authorities shall require interested parties providing confidential 
information to furnish non-confidentia l versions of the document containing 
the confidential information within three working days of submitting the 
original document. summaries thereof .  The non-confidential version shall be 
identical to the version containing th e confidential information, except that 
the confidential information shall be removed and replaced by a summary of 
that information These summaries shall be in sufficient detail to permit a 
reasonable understanding of the substa nce of the information submitted in 
confidence.  In exceptiona l circumstances, such parties providing confidential 
information may indicate that such information is not susceptible of 
summary.  In such exceptional circumst ances, a statement of the reasons why 
summarization is not possible must be provided. 
  6.5.2 If the authorities find that a request for confidentiality is not warranted and if 
the  supplier of the information is e ither unwilling to make the information 
public or to authorize its disclosure in generalized or summary form, the 
authorities may disregard such information unless it can be demonstrated to 
their satisfaction from appropriate sources that the information is correct.
25 
 6.6 Except in circumstances provided for in paragr aph 8, the authorities shall during the course of 
an investigation satisfy themselves as to the accuracy  of the information supplied by interested parties 
upon which their findings are based. 
 
6.7 In order to verify information provided or to obtain further details, the authorities may carry 
out investigations in the territory of other Members as required, provided they obtain the agreement of 
the firms concerned and notify the representatives of the government of the Member in question, and 
                                                     
 
23 The requirements of this paragraph may be me t by making such non-confidential documents and 
indices available via the internet.  
24 Members are aware that in the te rritory of certain Members disclosure pursuant to a narrowly-drawn 
protective order may be required. 
25 Members agree that requests for confidentia lity should not be arbitrarily rejected.    TN/RL/W/254 
 Page 15 
 
 
  unless that Member objects to the investigation.  Th e procedures described in Annex I shall apply to 
investigations carried out in the territory of othe r Members.  Subject to the requirement to protect 
confidential  information, the authorities shall make the resu lts of any such investigations available, or 
shall provide disclosure thereof pursuant to paragraph  9, to the firms to which they pertain and may 
make such results available to the applicants.  
 
6.8 In cases in which any interested party re fuses access to, or otherwise does not provide, 
necessary information within a reasonable period or significantly impedes the investigation, 
preliminary and final determinations , affirmative or negative, may be made on the basis of the facts 
available.  The provisions of Annex II shall be observed in the application of this paragraph. 
 
[INFORMATION REQUESTS TO AFFILIATED  PARTIES: Some delegations support 
the inclusion in the text of language to en sure that interested parties are not treated as 
non-cooperative if they fail to provide info rmation from affiliates that they did not 
control.  Other delegations are concerned that such language could encourage non-
cooperation, and cautioned about an inappropriately narrow concept of control in this 
context.]  
6.9 The authorities shall, before a final determination is made, inform 
provide all interested 
parties with a written report of the essential facts under consid eration which they intend will form the 
basis for the decision whether to ap ply definitive measures.  Interested parties shall have 20 days to 
respond to this report and the authorities sh all address such responses in their final 
determination.26Such disclosure should take place in sufficient time for the parties to defend t heir 
interests.  
 6.9bis The authorities shall, normally within seven days after giving public notice of a final 
determination under Article 12.2, disclose to each e xporter or producer for whom an individual rate of 
duty has been determined the calculations used to determine the margin of dumping for that exporter 
or producer.27  The authorities shall provide to the exporter or producer the calculations, either in 
electronic format (such as a computer programme or  spreadsheet) or in another appropriate medium, a 
detailed explanation of the information used, the sources of that information and any adjustments 
made to the information prior to its use in the calcu lations.  The disclosure and explanation shall be in 
such a form as to permit the reproduction of the calculations.  
 6.10 The authorities shall, as a rule, determine an individual margin of dumping for each known exporter or producer concerned of the product unde r investigation.  In cases where the number of 
exporters, producers, importers or types of produc ts involved is so large as to make such a 
determination impracticable, the authorities may lim it their examination either to a reasonable number 
of interested parties or products by using samp les which are statistically valid on the basis of 
information available to the authorities at the time of  the selection, or to the largest percentage of the 
volume of the exports from the country in qu estion which can reasonably be investigated. 
 
6.10.1 Any selection of exporters, producers, importers or types of products made 
under this paragraph shall preferably 
be chosen in consultation with,  and 
preferably with the consent of,  the exporters, producers or importers 
concerned.  Where there are large numbers of exporters, producers or 
importers, the authorities may consult with relevant trade associations.  
 
                                                      
26 Where no preliminary determination has been made, th is disclosure shall be made within sufficient 
time to allow an exporter to offer an undertaking in response.  
27 This requirement is satisfied where the authorities make such a disclosure pursuant to Article 6.9 
before the final determination is made.  TN/RL/W/254 
Page 16  
 
  6.10.2 In cases where the authorities have li mited their examination, as provided for 
in this paragraph, they shall neverthe less determine an individual margin of 
dumping for any exporter or producer not initially selected who submits the 
necessary information in time for that in formation to be considered during the 
course of the investigation, except where the number of exporters or 
producers is so large that individual examinations would be unduly 
burdensome to the authorities and prevent the timely completion of the investigation.  Voluntary res ponses shall not be discouraged. 
 6.10.3 Where the authorities limit their examin ation pursuant to this paragraph, they 
shall explain, in their public notices or  separate reports pursuant to Article 12, 
the basis for their conclusion that it was impracticable to determine an 
individual margin of dumping for each known exporter or producer, the 
reasons for the specific selection made and the reasons why an individual 
margin was not determined for any exporter or producer not initially selected 
who submitted the necessary information in time for that information to be 
considered during the course of the investigation.  
 6.11 For the purposes of this Agreement,  "interested parties" shall include: 
 
(i) an exporter or foreign producer or the impor ter of a product subject to investigation,  
or a trade or business association a majority  of the members of which are producers, 
exporters or importers of such product; 
 
(ii) the government of the exporting Member;  and 
 
(iii) a producer of the like product in the importing Member or a trade and business  
association a majority of the members of which produce the like product in the territory of the importing Member. 
 This list shall not preclude Members from allowing  domestic or foreign parties other than those 
mentioned above to be included as interested parties. 
 
6.12 The authorities shall provide opportunities for industrial users of the product under investigation, and for representative consumer orga nizations in cases where the product is commonly 
sold at the retail level, to provide information which is relevant to the investigation regarding 
dumping, injury and causality. 
 
6.13 The authorities shall take due account of any di fficulties experienced by interested parties, in 
particular small companies, in supplying inform ation requested, and shall provide any assistance 
practicable, including by responding in a timely ma nner to requests for clarification of questionnaires
. 
 6.14 The procedures set out above are not intende d to prevent the authorities of a Member from 
proceeding expeditiously with regard to initiating an investigation, reaching preliminary or final 
determinations, whether affirmative or negative, or from applying provisional or final measures, in 
accordance with relevant provisions of this Agreement.   
Article 7  
 
Provisional Measures  
 
7.1 Provisional measures may be applied only if:  TN/RL/W/254 
 Page 17 
 
 
   
(i) an investigation has been initiated in ac cordance with the provisions of Article 5 and , 
a public notice has been given to that effect; and   
 (ii) interested parties have been given adequate opportunities to submit information, 
including responses to questionnaires se nt in accordance with Article 6.1.1,  and make 
comments;  
 
(iii) a preliminary affirmative determination h as been made of dumping and consequent 
injury to a domestic industry taking into  account responses to questionnaires received 
from, and other relevant informati on submitted by, interested parties ; and 
 (iiii
v) the authorities concerned judge such meas ures necessary to prevent injury being 
caused during the investigation. 
 
7.2 Provisional measures may take the form of a provisional duty or, preferably, a security - by 
cash deposit or bond - equal to the amount of th e anti-dumping duty provisionally estimated, being 
not greater than the provisionally estimated margin of dumping.  Withholding of appraisement is an 
appropriate provisional measure, provided that th e normal duty and the estimated amount of the 
anti-dumping duty be indicated and as long as the withholding of appraisement is subject to the same conditions as other provisional measures. 
 
7.3 Provisional measures shall not be applied soone r than 60 days from the date of initiation of 
the investigation.  7.4 The application of provisional measures shall be limited to as short a period as possible, not 
exceeding four months or, on decision of the au thorities concerned, upon request by exporters 
representing a significant percentage of the trade involved, to a period not exceeding six months.  When authorities, in the course of an investigati on, examine whether a duty lower than the margin of 
dumping would be sufficient to remove injury , these periods may be six and nine months, 
respectively.  
7.5 The relevant provisions of Article 9 shall be followed in the application of provisional 
measures.   
Article 8  
 
Price Undertakings  
 
8.1 Proceedings may
28 be suspended or terminated w ithout the imposition of provisional 
measures or anti-dumping duties upon receipt of  satisfactory voluntary undertakings from any 
exporter to revise its prices or to cease exports to the area in question at dumped prices so that the 
authorities are satisfied that the injurious effect of the dumping is eliminated.  Price increases under 
such undertakings shall not be higher than necessar y to eliminate the margin of dumping.  It is 
desirable that the price increases be less than th e margin of dumping if such increases would be 
adequate 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 
                                                     
 
28 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. TN/RL/W/254 
Page 18  
 
  by such dumping or, if no affirmative preliminary determination is made, until the authorities have 
made disclosure pursuant to paragraph 9 of Article 6.   The authorities shall inform exporters of their 
right to offer undertakings and shall allo w them an adequate opportunity to do so . 
 8.3  Undertakings offered need not be accep ted if the authorities consider their acceptance 
impractical, for example, if 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, t
The 
authorities shall provide to the exporter the reasons 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. 
 
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 material 
violation of an undertaking, the 
authorities of the importing Member may take, unde r this Agreement in conformity with its 
provisions, expeditious actions wh ich may constitute immediate app lication of provisional measures 
using the best information available.29  In such cases, definitive du ties may be levied in accordance 
with this Agreement on products  entered 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.   
Article 9  
 
Imposition and Collection of Anti-Dumping Duties  
 
9.1 The decision whether or not to impose an anti-dumping duty in cases where all requirements for the imposition have been fulfilled, and the d ecision whether the amount of the anti-dumping duty 
to be imposed shall be the full margin of dumping or  less, are decisions to be made by the authorities 
of the importing Member.  It is desirable that th e imposition be permissive in the territory of all 
Members, and that the duty be less than the margin if such lesser duty would be adequate to remove 
the injury to the domestic industry.  
                                                     
 
29 Without prejudice to the right to take expeditious actions, the authorities shall inform the exporter if 
they consider that there has been a material violation of the undertaking, and shall provide the exporter an 
opportunity to comment.    TN/RL/W/254 
 Page 19 
 
 
  [PUBLIC INTEREST: Participants are shar ply divided on the desirability of a 
procedure to take account of the representa tions of domestic interested parties when 
deciding whether to impose a duty.  Some co nsider that such a procedure would impinge 
on Members' sovereignty and would be cost ly and time-consuming, while others support 
inclusion of such a procedure.  Issues related to any such procedure include the elements 
that can or should be taken into account in any public interest proceeding, the extent to 
which any such procedures should apply in the context of Article 11 reviews, whether the ADA's requirement for a judicial revie w mechanism should apply to decisions 
pursuant to any such procedure, and the extent to which WTO dispute settlement should apply.] 
 
[LESSER DUTY:  Many delegations strongly  support inclusion of a mandatory lesser 
duty rule.  Other delegations oppose with equal conviction the inclusion of such a rule, with one delegation noting that it was not practically possible to calculate an injury 
margin.  Among those supporting a mandatory lesser duty rule, there are varying views 
about the appropriate degree of specificity for any new rules and the extent to which 
those rules should prescribe or prioritize particular approaches to determining the appropriate level of duty.  Some delegations have indicated that at a minimum language 
in the current Agreement regarding the desira bility of applying a lesser duty should be 
maintained.] 
 
9.2 When an anti-dumping duty is imposed in respect of any product, such anti-dumping duty 
shall be collected in the appropriate amounts in each  case, on a non-discriminatory basis on imports of 
such product from all sources found to be dumped a nd causing injury, except as to imports from those 
sources from which price undertakings under the terms of this Agreement have been accepted.  The 
authorities shall name the supplier or suppliers of the product concerned.  If, however, several 
suppliers from the same country are involved, and it  is impracticable to name all these suppliers, the 
authorities may name the supplying country concerne d.  If several suppliers from more than one 
country are involved, the authorities may name eith er all the suppliers involved, or, if this is 
impracticable, all the supplying countries involved.  9.3 The amount of the anti-dumping duty shall not exceed the margin of dumping as established 
under Article 2.  In this regard, each  Member shall establish procedures
30 to ensure a prompt refund, 
upon request, where the amount collected  exceeds the actual margin of dumping.31  In this respect, the 
following subparagraphs shall apply.  
  
9.3.1 When the amount of the anti-dumping duty is assessed on a retrospective 
basis, the determination of the final liability for payment of anti-dumping 
duties shall take place as soon as possible, normally within 12 months, and in no case more than 18 months, after the date on which a request for a final assessment of the amount of the anti-dumping duty has been made.
32  Any 
refund shall be made promptly and normally in not more than 90 days following the determination of fina l liability made pursuant to this 
sub-paragraph.  In any case, where a refund is not made within 90 days, the 
authorities shall provide an explanation if so requested. 
 
                                                     
 
30 These procedures shall be set forth in the Member's laws, regulations or published administrative 
procedures and shall be notified to the Committee pursuant to Article 18.5.  
31 The actual dumping margin determined by the authorities shall be based on the relevant updated 
normal value and export price.  
32 It is understood that the observance of the time-limits mentioned in this subparagraph and in 
subparagraph 3.2 may not be possible where the product in question is subj ect to judicial re view proceedings. TN/RL/W/254 
Page 20  
 
  9.3.2 When the amount of the anti-dumping duty is assessed on a prospective basis, 
provision shall be made for a prompt refund, upon request, of any duty paid in excess of the margin of dumping.  A refund of any such duty paid in excess of the actual margin of dumping shall normally take place within 12 months, and in no case more than 18 months, after the date on which a 
request for a refund, duly supported by evidence, has been made by an 
importer of the product subject to the anti-dumping duty, or by an exporter on 
behalf of, and in association with, one or more importers .  The refund 
authorized should normally be made within 90 days of the above-noted decision. 
 
9.3.3 In determining whether and to what  extent a reimbursement should be made 
when the export price is constructe d in accordance with paragraph 3 of 
Article 2, authorities should take account of any change in normal value, any 
change in costs incurred between impor tation and resale, and any movement 
in the resale price which is duly reflected in subsequent selling prices, and 
should calculate the export price with no deduction for the amount of anti-dumping duties paid when conclusive evidence of the above is provided. 
 9.3.4 In the event that monies paid or  deposited are refunded pursuant to this 
paragraph, the authorities shall pay a reasonable amount of interest on the 
monies refunded.  
 9.4 When the authorities have limited their ex amination in accordance with the second sentence 
of paragraph 10 of Article 6, any anti-dumping dut y applied to imports fro m exporters or producers 
not included in the examination shall not exceed: 
 
(i) the weighted average margin of dumpi ng established with respect to the selected 
exporters or producers or, 
 
(ii) where the liability for payment of anti-dumping duties is calculated on the basis of a 
prospective normal value, the difference be tween the weighted average normal value 
of the selected exporters or producers and the export prices of exporters or producers 
not individually examined, 
 provided that the authorities shall disregard fo r the purpose of this paragraph any zero and de minimis  
margins and margins established under the circumstances referred to in paragraph 8 of Article 6.  The 
authorities shall apply individual duties or normal va lues to imports from any exporter or producer not 
included in the examination who has provided th e necessary information during the course of the 
investigation, as provided for in subparagraph 10.2 of Article 6.  9.5 If a product is subject to anti-dumping duties in an importing Member, the authorities shall 
promptly carry out a review for the purpose of determining individual margins of dumping for any 
exporters or producers in the exporting country in qu estion who have not exported the product to the 
importing Member during the period of investigation,  provided that these exporters or producers can 
show that (a) 
they are not related to any of the exporters or producers in the exporting country who are  
subject to the anti-dumping duties on the product, and (b) they have enga ged in one or more bona fide  
sales in commercial quantities into the importing Me mber (as evidenced by shipments of the product  TN/RL/W/254 
 Page 21 
 
 
  or by a contract for sale pursuant to which such sh ipments will occur within six months of the date 
upon which the contract was concluded) .33 
  9.5.1 A decision whether or not to initiate  a review under this paragraph shall be 
taken within three months of the l odging of a written request, during which 
period the authorities may take such steps as they deem appropriate to verify 
the accuracy and adequacy of the inform ation contained in the request.  The 
applicant and the domestic industry shall be advised of the initiation of any 
review and a public notice of the initiation shall also be made.  If the 
authorities decide not to initiate a review, they shall provide the applicant 
with a written statement of the reasons underlying that decision.  
  9.5.2   The 
Such a review shall be initiated and carried out on an accelerated basis, 
compared to normal duty assessment and review proceedings in the importing Member, and shall in any even t be concluded within nine months 
of its initiation .   
  9.5.3 
No anti-dumping duties shall be levied on imports from such exporters or producers while the review is being carried out.  The authorities may, however, withhold appraisement and/or request guarantees to ensure that, 
should such a review result in a determination of dumping in respect of such 
producers or exporters, anti-dumping duties can be levied retroactively to the 
date of the initiation of the review.  Upon collection of any such duties due, 
the authority shall promptly release any guarantee or bond.  
 
[ANTI-CIRCUMVENTION: Delegations disagree as to whether there should be specific 
rules on anti-circumvention. Some delegat ions consider that the only appropriate 
reaction to perceived circumvention is to seek initiation of a new investigation, while 
other delegations consider that anti-circumven tion is a reality, and that rules on anti-
circumvention are necessary to achieve so me degree of harmonization among the 
procedures used by different Members.  To  the extent that rules are included, 
delegations disagree, inter alia, what types of circumvention should be addressed (with 
particular concern expressed regarding the use of anti-circumvention measures in 
respect of exports originating in a third country), whether numerical thresholds are 
desirable, whether findings of dumping, inju ry and causation should be required and 
whether anti-circumvention measures shou ld be company-specific or country-wide.]  
  
Article 10  
 
Retroactivity  
 
10.1 Provisional measures and anti-dumping duties sh all only be applied to products which enter 
for consumption after the time when the deci sion taken under paragra ph 1 of Article 7 and 
paragraph 1 of Article 9, respectively, enters into force, subject to the exceptions set out in this 
Article.  10.2 Where a final determination of injury (but not of a threat thereof or of a material retardation 
of the establishment of an industry) is made or, in  the case of a final determination of a threat of 
                                                     
 
33 Provided, that if such shipments have not occurred within six months of the date upon which the 
contract was concluded, the authorities may terminate the review without determining individual margins for the 
exporters or producers concerned.  TN/RL/W/254 
Page 22  
 
  injury, where the effect of the dumped imports w ould, in the absence of the provisional measures, 
have led to a determination of injury, anti-dumping duties may be levied retroactively for the period 
for which provisional measures, if any, have been applied.  10.3 If the definitive anti-dumping duty is higher than  the provisional duty paid or payable, or the 
amount estimated for the purpose of the security, the difference shall not be collected.  If the 
definitive duty is lower than the provisional duty paid  or payable, or the amount estimated for the 
purpose of the security, the difference shall be re imbursed or the duty recalculated, as the case may 
be.  
10.4 Except as provided in paragraph 2, where a dete rmination of threat of injury or material 
retardation is made (but no injury has yet occurred) a definitive anti-dumping duty may be imposed only from the date of the determin ation of threat of injury or material retardation, and any cash 
deposit made during the period of the application of provisional measures shall be refunded and any 
bonds released in an expeditious manner. 
 
10.5 Where a final determination is negative, any cash deposit made during the period of the 
application of provisional measures shall be ref unded and any bonds released in an expeditious 
manner.  10.6 A definitive anti-dumping duty may be levi ed on products which were entered for 
consumption not more than 90 days prior to the date  of application of provisional measures, when the 
authorities determine for the dumped product in question that:  
(i) there is a history of dumping which caused injury or that the importer was, or should 
have been, aware that the exporter practises dumping and that such dumping would 
cause injury, and 
 
(ii) the injury is caused by massive dumped imports of a product in a relatively short time 
which in light of the timing and the volume of the dumped imports and other 
circumstances (such as a rapid build-up of inventories of the imported product) is 
likely to seriously undermine the remedial  effect of the definitive anti-dumping duty 
to be applied, provided that the importers  concerned have been given an opportunity 
to comment. 
 10.7 The authorities may, after initiating an investig ation, take such measures as the withholding of 
appraisement or assessment as may be necessary to  collect anti-dumping duties retroactively, as 
provided for in paragraph 6, once they have suffici ent evidence that the conditions set forth in that 
paragraph are satisfied.  10.8 No duties shall be levied retroactively pur suant to paragraph 6 on products entered for 
consumption prior to the date of initiation of the investigation.  
10.8bis In the event that monies paid or deposited are refunded pursuant to paragr aphs 3 or 5 of this 
Article, the authorities shall pay a reasonable amount of interest on the monies refunded.  
  
Article 11  
 
Duration and Review of Anti-Dumping Duties and Price Undertakings  
 
11.1 An anti-dumping duty shall remain in force only as long as and to the extent necessary to counteract dumping which is causing injury.  TN/RL/W/254 
 Page 23 
 
 
   
11.2 The authorities shall review the need for th e continued imposition of the duty, or for a 
modification of the level of the duty34, where warranted, on their ow n initiative or, provided that a 
reasonable period of time has elapsed since the im position of the definitive anti-dumping duty, upon 
request by any interested party which submits positive information substantiating the need for a 
review.35  Interested parties shall have the right to  request the authorities to examine whether the 
continued imposition of the duty is necessary to offset  dumping, whether the injury would be likely to 
continue or recur if the duty were removed or varied , or both.  Interested parties may also request a 
modification in the level of the duty.   If, as a result of the review under this paragraph, the authorities 
determine that there has been a change  in circumstances of a lasting nature36 since the original 
investigation or the last review under Article 11.2 or 11.3, such that  the anti-dumping duty is no 
longer warranted or the level of the duty applicable to one or more exporters  is no longer appropriate, 
the duty , it shall be terminated immediately or its level modified . 
 11.3 Notwithstanding the provisions of paragraphs 1 and 2, any de finitive anti-dumping duty shall 
be terminated on a date not later than five year s from its imposition (or from the date of the most 
recent review under paragraph 2 if that review ha s covered both dumping and injury, or under this 
paragraph), unless the authorities determine, in a review initiated before that date on their own 
initiative or upon a duly substantiated request made by or on behalf of the domestic industry within a 
reasonable period of time prior to that date, that the expiry of the duty would be likely to lead to continuation or recurrence of dumping and injury.
37  The duty may remain in force pending the 
outcome of such a review. 
 
[SUNSET REVIEWS:  Delegations have wide ly differing views regarding various 
aspects of the sunset issue.  There is sharp disagreement as to whether there should be 
any automatic termination of measures after a given period of time and, if so, after how 
long.  On the two extremes of this issue a re those delegations that favour automatic 
termination after five years without any possib ility of extension and those that reject the 
principle of automatic termination altogether.   Other issues dividing delegations include 
whether there is a need for additional standards and criteria governing sunset determinations and, if so, what standards a nd criteria would be most appropriate; what 
rules should apply to the initiation of sunset reviews, including whether there should be 
limitations on ex officio  initiation, and proposed standing and evidentiary thresholds for 
initiation; and the timeframes for completion of investigations.] 
 
11.4 The provisions of Article 6 regarding evid ence and procedure shall apply to any review 
carried out under this Article.  Any such review sh all be carried out expeditiously and shall normally 
be concluded within 12 months of th e date of initiation of the review. 
 11.5 The provisions of this Article shall apply mutatis mutandis  to price undertakings accepted 
under Article 8. 
                                                     
 
34 Where the anti-dumping duty imposed takes the form  of a prospective normal value, this requirement 
relates to the modification of the prospective normal value.  
35 A determination of final liability for payment of an ti-dumping duties, as provided for in paragraph 3 
of Article 9, does not by itself constitute a review within  the meaning of this Article.  However, a determination 
made pursuant to that paragraph is relevant evidence which may be considered when deciding whether the 
initiation of a review to examine the possible modification of the level of a duty under this Article is warranted.  
36 In determining whether there has been a change of  circumstances of a lasting nature, the authorities 
may take into account, inter alia , the impact of the existing duty and the possible consequences if that duty were 
terminated or modified.  
37 When the amount of the anti-dumping duty is assessed on a retrospective basis, a finding in the most 
recent assessment proceeding under subpar agraph 3.1 of Article 9 that no duty is  to be levied shall not by itself 
require the authorities to terminate the definitive duty. TN/RL/W/254 
Page 24  
 
   
Article 12  
 
Public Notice and Explanation of Determinations  
 12.1 When the authorities are satisfied  that there is sufficient evidence to justify the initiation of an 
anti-dumping investigation pursuant to Article 5, th e Member or Members the products of which are 
subject to such investigation and other interested parties known to th e investigating authorities to have 
an interest therein shall be notified and a public notice shall be given.  
12.1.1 A public notice of the initiation of an investigation shall contain, or otherwise 
make available through a separate report
38, due regard being paid to the 
requirement for the protection of confidential information, adequate 
information on the following: 
 
   (i) a description of the product under considerati on, including its 
tariff classification for customs purposes, the name of the 
exporting country or countries,  and, to the extent already 
known to the authorities,  the names of the exporters and 
foreign producers of the product product involved ; 
 
   (ii) the domestic like pr oduct and the domestic industry, 
including whether any domestic producers were excluded 
from the domestic industry, and the names of the applicant 
and of the domestic producers of the like product (or, if 
relevant, associations of producers) supporting the 
application and of other domestic producers of the like 
product insofar as they are known to the investigating 
authorities;  
    (iii) the procedural background of the investigation, including the 
date on which the application was received and the date of 
initiation of the investigation; 
   (iv
ii) the basis on which dumping is alleged in the application; 
   (i
v) a summary of the factors on which the allegation of injury is 
based; 
   (vi) whether the authorities may consider limiting their 
examination in accordance with paragraph 10 of Article 6 
and any procedures in that respect;  and  
 
  (vii ) next steps in the process, including the time limits allowed to 
interested parties for making their views known, other 
indicative time frames, periods of data collection and a 
contact to whom the address to which  representations by 
interested parties should be directed; 
 
                                                      
38 Where authorities provide information and explanatio ns under the provisions of this Article in a 
separate report, they shall ensure that such  report is readily available to the public.  TN/RL/W/254 
 Page 25 
 
 
    (vi)  the time -limits allowed to interested partie s for making their 
views known . 
 12.2 Public notice shall be given of any preliminar y or final determination, whether affirmative or 
negative, of any decision to accept an undertaking pursu ant to Article 8, of the termination of such an 
undertaking, and of the termination of a definitiv e anti-dumping duty.  Each such notice shall set 
forth, or otherwise make available through a separate report, in sufficient detail the findings and conclusions reached on all issues of fact and law cons idered material by the investigating authorities.  
All such notices and reports shall be forwarded to the Member or Members the products of which are 
subject to such determination or undertaking and to ot her interested parties known to have an interest 
therein. 
  12.2.1 A public notice of the imposition of provisional measures shall set forth, or 
otherwise make available through a separate report, sufficiently detailed 
explanations of the analysis underlying 
for the preliminary determinations on 
dumping and injury and shall refer to th e matters of fact and law which have 
led to arguments being accepted or rejected.  Such a notice or report shall, due regard being paid to the requireme nt for the protection of confidential 
information, contain in particular: 
 
 (i)
 the names of the suppliers, or when this is impracticable, the 
supplying countries involved;  
 
 (i i) a description of the product under consideration, including its 
tariff classification which is sufficient for customs purposes, 
the name of the exporting country or countries, and the names 
of the known exporters and foreign producers of the product 
under consideration ; 
  (ii) information concerning the domestic like product and the 
domestic industry, including th e names of all known domestic 
producers of the like product;  
 
 (iii) the periods of data collection for both the preliminary 
dumping and preliminary injury analysis;  
  (iv
ii) the margins of dumping established and information 
concerning the calculation of the margins of dumping, 
including an a full  explanation of the basis upon which 
normal values were established (sales in the home market, 
sales to a third market or cons tructed normal value), the basis 
upon which export prices were established (including, if 
appropriate, the adjustments related to the construction of 
export price), and reasons for the methodology used in the 
establishment and comparison of normal values and the 
export prices  (including any adjustments made to reflect 
differences affecting price comparability) and the normal 
value under Article  2; 
 
 (i v) considerations  information  relevant to the injury 
determination as set out in Article 3, including information 
concerning the domestic market for the subject imports and 
the like product, the volume and the price effects of the TN/RL/W/254 
Page 26  
 
  subject  imports, the consequent impact of the subject 
imports on the domestic industry an d, if relevant, the factors 
leading to a conclusion of threat of material injury or 
material retardation of the establishment of a domestic 
industry ; 
 
 (vi) information concerning any use of full or partial facts 
available, including, where applicable, the reasons why 
information submitted by a party was rejected;  
 
 (vii) information concerning the on-the-spot verification of 
information used by the authorities, if undertaken;  
  (viii) information on any provisional measures being imposed, 
including the form, level, and duration of such measures; and  
 
 (ix) information concerning next steps in the process, and related 
time frames, and information concerning a contact to whom 
representations by interested parties should be directed (v) the 
main reasons leading to the determination . 
 
12.2.2 A public notice of conclusion or susp ension of an investigation in the case of 
an affirmative determination providing for the imposition of a definitive duty or the acceptance of a price undertaking shall contain, or otherwise make available through a separate report, all re levant information on the matters of 
fact and law and reasons which have le d to the imposition of final measures 
or the acceptance of a price  undertaking, due regard being paid to the 
requirement for the protection of confiden tial  information.  In particular, the 
notice or report shall contain the info rmation described in subparagraph 2.1, 
to the extent applicable, 
as well as the reasons for the acceptance or rejection 
of relevant arguments or claims ma de by the exporters, foreign producers  and 
importers, and the basis for any decision made under subparagraph  10.2 of 
Article  6. 
 
12.2.3 A public notice of the termination or  suspension of an investigation following 
the acceptance of an undertaking pursu ant to Article 8 shall include, or 
otherwise make available through a separate report, the non-confidential part 
of this undertaking.  
 12.3 The provisions of this Article shall apply mutatis mutandis  to proceedings conducted pursuant 
to Articles 9.3 and 9.5,  to decisions under Article 10 to apply duties retroactively and to  the initiation 
and completion of reviews pursuant to Ar ticle 11 and to decisions under Article  10 to apply duties 
retroactivel y. 
 
 
Article 13  
 
Judicial Review  
 
 Each Member whose national legislation cont ains provisions on anti-dumping measures shall 
maintain judicial, arbitral or administrative tribunals or procedures for the purpose, inter alia , of the 
prompt review of administrative ac tions relating to final determinati ons and reviews of  determinations  TN/RL/W/254 
 Page 27 
 
 
  within the meaning of Article 11.  Such tribunals or procedures shall be independent of the authorities 
responsible for the determina tion or review in question. 
  
Article 14  
 
Anti-Dumping Action on Behalf of a Third Country  
 
14.1 An application for anti-dumping action on beha lf of a third country shall be made by the 
authorities of the third country requesting action. 
 
14.2 Such an application shall be supported by pri ce information to show that the imports are being 
dumped and by detailed informati on to show that the alleged dumping is causing injury to the 
domestic industry concerned in the third country.  Th e government of the third country shall afford all 
assistance to the authorities of the importing country to obtain any further information which the latter 
may require. 
 14.3 In considering such an application, the aut horities of the importing country shall consider the 
effects of the alleged dumping on the industry concerne d as a whole in the third country;  that is to 
say, the injury shall not be assessed in relation only to the effect of the alleged dumping on the industry's exports to the importing country or even on the industry's total exports. 
 
14.4 The decision whether or not to proceed with a case shall rest with the importing country.  If the importing country decides that it is prepared to take action, the initiation of the approach to the 
Council for Trade in Goods seeking its approval for su ch action shall rest with the importing country. 
 
[THIRD COUNTRY DUMPING: Some delegatio ns support new rules that would 
eliminate the requirement for Council for Trade in Goods approval to take anti-
dumping action on behalf of a third country, as in their view the current rules are unworkable.  Other delegations do not rule out such new rules, but consider that many other issues about how such actions would be  taken would need to be resolved before 
they could reach a judgment on the desirability of operationalizing anti-dumping action 
on behalf of a third country.  Yet other de legations question whether it is desirable to 
operationalize this provision at all, with certain delegations preferring that the provision be deleted entirely.] 
  
Article 15  
 
Developing Country Members  
 
 It is recognized that special regard must be given by developed country Members to the 
special situation of developing country Members wh en considering the application of anti-dumping 
measures under this Agreement.  Possibilities of  constructive remedies provided for by this 
Agreement shall be explored before applying anti-dumping duties where they would affect the 
essential interests of developing country Members.  
[SPECIAL AND DIFFERENTIAL TREATMENT/TECHNICAL ASSISTANCE:  The 
Group has continued to examine issues relating  to special and differential treatment for 
developing Members, both as exporters a nd as users of anti-dumping.  While some 
delegations advocate flexibilities for the investigating authorities of developing Members, for example in respect of initiati on of investigations, other delegations are 
cautious about such flexibilities, particularly in light of the fact that many developing TN/RL/W/254 
Page 28  
 
  Members are now active users of anti-dumping.  Regarding technical assistance, some 
delegations propose creation of a trade remedi es facility that would assist smaller and 
resource restricted developing Members to deve lop the capacity to use such remedies.  
While some delegations oppose any facility that would assist Members to use trade 
remedies, others consider that all Members have  an equal right to use trade remedies in 
a WTO-consistent manner.] 
 
 
PART II 
 
 
Article 16  
 
Committee on Anti-Dumping Practices  
 16.1 There is hereby established a Committee on An ti-Dumping Practices (referred to in this 
Agreement as the "Committee") composed of repr esentatives from each of the Members.  The 
Committee shall elect its own Chairman and shall meet  not less than twice a year and otherwise as 
envisaged by relevant provisions of this Agreemen t at the request of any Member.  The Committee 
shall carry out responsibilities as assigned to it unde r this Agreement or by the Members and it shall 
afford Members the opportunity of consulting on  any matters relating to the operation of the 
Agreement or the furtherance of its objectives.  Th e WTO Secretariat shall act as the secretariat to the 
Committee.  16.2 The Committee may set up subsidiary bodies as appropriate.  
16.3 In carrying out their functions, the Committe e and any subsidiary bodies may consult with 
and seek information from any source they deem ap propriate.  However, before the Committee or a 
subsidiary body seeks such information from a sour ce within the jurisdiction of a Member, it shall 
inform the Member involved.  It shall obtain the c onsent of the Member and any firm to be consulted. 
 16.4 Members shall report without delay to the Committee all preliminary or final anti-dumping 
actions taken.  Such reports shall be available in  the Secretariat for inspection by other Members.  
Members shall also submit, on a se mi-annual basis, reports of any anti-dumping actions taken within 
the preceding six months, and a list of definitive me asures in force as of the end of that period
.  The 
semi-annual reports shall be submitt ed on an agreed standard form. 
 
16.5 Each Member shall notify the Committee (a) which of its authorities are competent to initiate 
and conduct investigations re ferred to in Article 5 and (b) its domestic procedures governing the 
initiation and conduct of such investigations. 
  
Article 17  
 
Consultation and Dispute Settlement  
 
17.1 Except as otherwise provided herein, the Dis pute Settlement Understanding is applicable to 
consultations and the settlement of  disputes under this Agreement. 
 
17.2 Each Member shall afford sympathetic consid eration to, and shall afford adequate opportunity 
for consultation regarding, repr esentations made by another Member with respect to any matter 
affecting the operation of this Agreement.    TN/RL/W/254 
 Page 29 
 
 
  17.3 If any Member considers that any benefit accruing to it, directly or indirectly, under this 
Agreement is being nullified or impaired, or that the achievement of any objective is being impeded, 
by another Member or Members, it may, with a view to reaching a mutually satisfactory resolution of the matter, request in writing consultations with th e Member or Members in question.  Each Member 
shall afford sympathetic consideration to any re quest from another Member for consultation.   
 
17.4 If the Member that requested consultations considers that the consultations pursuant to 
paragraph 3 have failed to achieve a mutually agreed solution, a nd if final action has been taken by 
the administering authorities of the importing Member to levy definitive anti-dumping duties or to accept price undertakings, it may refer the matter to the Dispute Settlement Body ("DSB").  When a 
provisional  measure has a significant impact and the Member that requested consultations considers 
that the measure was taken contrary to the provisio ns of paragraph 1 of Article 7, that Member may 
also refer such matter to the DSB.  17.5 The DSB shall, at the request of the comp laining party, establish a panel to examine the 
matter based upon:  
 
(i) a written statement of the Member making the request indicating how a benefit 
accruing to it, directly or indirectly, u nder this Agreement has been nullified or 
impaired, or that the achieving of the objec tives of the Agreement is being impeded, 
and 
 
(ii) the facts made available in conformity with appropriate domestic procedures to the 
authorities of the importing Member. 
 17.6 In examining the matter referred to in paragraph 5: 
 
 (i) in its assessment of the facts of the ma tter, the panel shall determine whether the 
authorities' establishment of the facts w as proper and whether their evaluation of 
those facts was unbiased and objective.  If the establishment of the facts was proper 
and the evaluation was unbiased and objectiv e, even though the panel might have 
reached a different conclusion, the evaluation shall not be overturned; 
 
 (ii) the panel shall interpret the relevant provisions of the Agreement in accordance with 
customary rules of interpretation of public international law.  Where the panel finds 
that a relevant provision of the Agreemen t admits of more than one permissible 
interpretation, the panel shall find the author ities' measure to be in conformity with 
the Agreement if it rests upon one of  those permissible interpretations. 
 17.7 Confidential information provided to the pa nel shall not be disclosed without formal 
authorization from the person, body or authority prov iding such information.  Where such information 
is requested from the panel but release of such information by the panel is not authorized, a 
non-confidential summary of the information, authorized by the person, body or authority providing 
the information, shall be provided. 
 TN/RL/W/254 
Page 30  
 
  PART III 
 
Article 18  
 
Final Provisions  
 
18.1 No specific action against dumping of exports  from another Member can be taken except in 
accordance with the provisions of GATT 199 4, as interpreted by this Agreement.
39 
 18.2 Reservations may not be entered in respect of any of the provisions of this Agreement without 
the consent of the other Members. 
 18.3 Subject to subparagraphs 3.1 and 3.2, the provisions of this Agreement shall apply to 
investigations, and reviews of exis ting measures, initiated pursuant to  applications which have been 
made on or after the date of entry into force for a Member of the WTO Agreement. 
 
 18.3.1 With respect to the calculation of margins of dumping in refund procedures 
under paragraph 3 of Article 9, the rules used in the most recent determination or review of dumping shall apply. 
 
18.3.2 For the purposes of paragraph 3 of Article 11, existing anti-dumping 
measures shall be deemed to be imposed on a date not later than the date of 
entry into force for a Member of the WTO Agreement, except in cases in 
which the domestic legislation of a Member in force on that date already included a clause of the type provided for in that paragraph. 
 
18.3bis The results of the DDA shall apply to inv estigations, and reviews of existing measures 
pursuant to Articles 9.3, 9.5, and 11, initiated pursu ant to applications which have been made on or 
after the date of entry into force of those results or , where an investigation or review is initiated by the 
authorities without those authorities having received an  application, the investigation or review was 
initiated on or after the date of entry into force of those results.  
 
18.4 Each Member shall take all necessary steps, of a general or particular character, to ensure, not 
later than the date of entry into force of the WTO Agreement for it, the conformity of its laws, 
regulations and administrative procedures with the provisions of this Agreement as they may apply for the Member in question.  
18.5 Each Member shall inform the Committee of an y changes in its laws a nd regulations relevant 
to this Agreement and in the administ ration of such laws and regulations. 
 18.6 The Committee shall review annually the impl ementation and operati on of this Agreement 
taking into account the objectives thereof.  Th e Committee shall inform annually the Council for 
Trade in Goods of developments during the peri od covered by such reviews. In addition, the 
Committee shall review the anti-dumping policy and pr actices of individual Members according to the 
schedule and procedures set forth in Annex III.  
 18.7 The Annexes to this Agreement c onstitute an integral part thereof. 
                                                     
 
39 This is not intended to preclude action under other relevant provisions of GATT 1994, as 
appropriate.  TN/RL/W/254 
 Page 31 
 
 
  ANNEX I 
 
PROCEDURES FOR ON-THE-SPOT INVESTIGATIONS PURSUANT 
TO PARAGRAPH 7 OF ARTICLE 6 
 
 
1. Upon initiation of an investigation, the au thorities of the exporting Member and the firms 
known to be concerned should shall be informed of the intention to carry out on-the-spot 
investigations.  
2. If in exceptional circumstances it is intended to include non-governmental experts in the 
investigating team, the firms and the authorities of the exporting Member shall
should  be so informed.  
Such non-governmental experts shall should  be subject to effective sanctions for breach of 
confidentiality requirements.  
3. It should be standard practice to obtain e xplicit agreement of the firms concerned in the 
exporting Member before the visit is finally scheduled.  4. As soon as the agreement of the firms conc erned has been obtained, the investigating 
authorities shall 
should  notify the authorities of the exporting Member of the names and addresses of 
the firms to be visited and the dates agreed. 
 
5. Sufficient advance notice shall should  be given to the firms in question before the visit is 
made.  To afford the firms adequate opportunity to prepare for on-the-spot investigations, the 
investigating authorities shall provide each firm at least 14 days advance notice of the time period 
within which the authorities expect to conduct an y on-the-spot investigation of the information 
provided by that firm.40 
 6. Visits to explain the questionnaire should
 may only be made at the request of an exporting 
firm.  Such a visit may only be made if (a) the authorities of the importing Member notify the 
representatives of the Member in question and (b) the latter do not object to the visit. 
 
7. As the main purpose of the on-the-spot investig ation is to verify information provided or to 
obtain further details, it shall should  be carried out after the response to the questionnaire has been 
received unless the firm agrees to the contrary an d the government of the exporting Member is 
informed by the investigating authorities of th e anticipated visit and does not object to it.  
 
7bis No less than 10 days prior to each on-the-spot investigation, the inves tigating authorities shall 
provide to the firm a document that sets forth the topics the firm should be prepared to address during 
the on-the-spot investigation, and describes the ty pes of supporting documentation that shall be made 
available for review. ;  further, it should be standard practice prior to the vis it to advise the firms 
concerned of the general nature of the information to  be verified and of any further information which 
needs to be provided, though t This shall should  not preclude requests to be made on the spot for 
further details to be provided in the light of information obtained. 
 8. Enquiries or questions put by the authoriti es or firms of the exporting Members and essential 
to a successful on-the-spot investigation shall 
should , whenever possible, be answered before the visit 
is made. 
 
                                                      
40 This does not prevent the auth orities from adjusting the date, where necessary in light of 
developments in the investigation, and after consultation with the firm concerned.  TN/RL/W/254 
Page 32  
 
  9. The investigating authorities shall disclose in the form of a written report their factual 
findings resulting from the on-the-spot investigation.   In addition to the factual findings, the report 
shall describe the methods and procedures followed in carrying out the on-the-spot investigation.  The 
report shall be made available to all interested par ties in sufficient time for the parties to defend their 
interests, subject to the requirement to protect confidential information.  
 
  TN/RL/W/254 
 Page 33 
 
 
  ANNEX II 
 
BEST INFORMATION AVAILABLE IN TERMS OF PARAGRAPH 8 OF ARTICLE 6 
  
1. As soon as possible after the initiation of the investigation, the investigating authorities 
should 
shall specify in detail the information required fro m any interested party, and the manner in 
which that information should be structured by the interested party in its response.  The authorities 
shall should  also ensure that the party is aware that if  information is not supplied within a reasonable 
time, the authorities will be free to may make determinations on the basis of the facts available, 
including those contained in the application for the initiation of the investigation by the domestic 
industry.  2. The authorities may also request that an inter ested party provide its response in a particular 
medium (e.g. computer tape) or computer language .  Where such a request is made, the authorities 
shall 
should  consider the reasonable ability of the interested party to respond in the preferred medium 
or computer language, and shall should not request the party to use for its response a computer system 
other than that used by the party.  The authority ies should shall  not maintain a request for a 
computerized response if the interested party does not maintain computerized accounts and if 
presenting the response as requested would result in  an unreasonable extra burden on the interested 
party, e.g. it would entail unreasonable additiona l cost and trouble.  The authorities should shall  not 
maintain a request for a response in a particular medium or computer language if the interested party 
does not maintain its computerized accounts in such  medium or computer language and if presenting 
the response as requested would result in an unreasonabl e extra burden on the interested party, e.g. it 
would entail unreasonable additional cost and trouble.  
3. All information which is verifiable, which is a ppropriately submitted so that it can be used in 
the investigation without undue difficulties
41, which is supplied in a timely fashion, and, where 
applicable, which is supplied in a medium or com puter language requested by the authorities, should  
shall be taken into account when determinations are ma de.  If a party does not respond in the preferred 
medium or computer language but the authorities find that the circumstances set out in paragraph 2 have been satisfied, the failure to respond in th e preferred medium or computer language should
 shall  
not be considered to significantly impede the investigation. 
 4. Where the authorities do not have the ability to process information if provided in a particular 
medium (e.g. computer tape), the information should
 shall  be supplied in the form of written material 
or any other form acceptable to the authorities. 
 
5. Even though the information provided may not be ideal in all respects, this should  shall  not 
justify the authorities from disregarding it, provided th e interested party has acted to the best of its 
ability.  6. If evidence or information is not accepted, the supplying party should
 shall  be informed 
forthwith of the reasons therefor, and sh ould shall  have an opportunity to submit further evidence or 
information, or to provide further explanations,  within a reasonable period, due account being taken of 
the time-limits of the investigation42.  If the further evidence or information submitted, or the  
explanations provided, are considered by the authorities as not being satisfactory, the authorities shall 
                                                      
41 Submitted information cannot be used without undue difficulties if, inter alia , an assessment of the 
accuracy or relevance of that information is dependent upon other information that  has not been supplied or 
cannot be verified.    
42 Provided that the authorities need not consider any further evidence or information that is not 
submitted in time such that it can be verified during any on-site investigation conducted pursuant to Article 6.7.  TN/RL/W/254 
Page 34  
 
  inform the interested party concerned of 
the reasons for the rejection of such the evidence or 
information and should shall set forth such reasons be given  in any published determinations. 
 7. If the authorities have to base their findings, including those with respect to normal value, on 
information from a secondary source, including th e information supplied in the application for the 
initiation of the investigation, they should
 shall  do so with special circumspection.  In such cases, the 
authorities should  shall , where practicable, check the information from other independent sources at 
their disposal or reas onably available to them , such as published price lists, official import statistics 
and customs returns, and from the information obt ained from other interested parties during the 
investigation43.  It is clear, however, that if an interest ed party does not cooperate and thus relevant 
information is being withheld from the authorities, th is situation could lead to a result which is less 
favourable to the party than if the party did cooperate.  
                                                     
 
43 The sources consulted shall be identified in the disclosure conducted pursuant to Article 6.9.   TN/RL/W/254 
 Page 35 
 
 
  ANNEX III  
 
PROCEDURES FOR THE REVIEW OF MEMBERS'  
ANTI-DUMPING POLICY AND PRACTICES PURSUANT TO ARTICLE 18.5  
 
1. The anti-dumping policy and practices of Members shall be subject to periodic review by the 
Committee.  
 
A. Objectives  
 
2. The purpose of the review is to contribute to  the transparency and understanding of Members' 
policies and practices in respect of anti-dumping.  Th e review is not intended to serve as the basis for 
enforcement of specific obligations under this Agre ement or for dispute settlement procedures, or to 
impose new policy commitments on Members.  
 
B. Procedures for Review  
 
3. The review shall be conducted on the basis of the following documentation:  
  (a) a factual report, to be drawn up by the Secretariat on its own responsibility;  and 
 
 
 (b) if the Member under review so wishes, a report supplied by that Member.  
 4. The factual report by the Secretariat shall be based on the information available to it and that 
provided by the Member under review.  The Secretariat should seek clarification from such Member 
regarding its anti-dumping policies and practices making use of the indicative checklist identified in 
paragraph 8 of this Annex.  The Member under review shall provide the information requested for the 
preparation of the report, and shall be provided w ith an opportunity to comment on the draft report 
prior to its circulation.    
 5. The first cycle of reviews shall begin three y ears after the date of entry into force of the 
results of the Doha Development Ag enda.   During the ensuing five years, the Committee shall review 
the anti-dumping policies and practices of the 20 Members with the most anti-dumping measures in 
force as of the date of entry into force.44 
 6. The list of the Members to be reviewed duri ng each subsequent five-year review period shall 
be established on the basis of the number of origin al investigations initiated during the most recent 
five-year period for which information is availabl e.  The list shall include the 20 Members that 
initiated the most investigations pursuant to Artic le 5 during that period, as well as any additional 
Members that have initiated five or more original in vestigations during that pe riod;  provided, that the 
Committee may adjust the list of Members to be revi ewed and/or the cycle for review in light of 
subsequent developments and experience.  
 
7. The Committee shall agree on the order of, an d schedule for, the conduct of these reviews, 
taking into account the resource constraints of the Secretariat and of developing country Members.45 
 
                                                      
44 Least-developed country Members shall be subject to review pursuant to this Annex on a voluntary 
basis only.  
45 In the event that the Committee fa ils to agree, the Direct or-General shall decide  on the order of, and 
schedule for, the reviews.  TN/RL/W/254 
Page 36  
 
  8. The factual report of the Secretariat shall describe in detail the anti-dumping policy and 
practices of the Member under review including, wher e relevant and applicable, with respect to the 
following matters:  
 
• institutional organization of the investigating authorities  
• statistics on proceedings carried-out  
• pre-initiation procedures and practices  
• determination of export price and nor mal value (and adjustments thereto)  
• details of comparison methods  
• calculation of dumping margin  
• details and methodology of analysis and determination of injury and causal link  
• application of a lesser duty  
• application of public interest considerations  
• level of co-operation obtained  
• use of facts available  
• procedural requirements  
• treatment of confidential information  
• practice with regard to on-the-spot verifications  
• duty collection and assessment system  
• acceptance of undertakings  
• review investigations (under Articles 9 and 11)  
• anti-circumvention procedures  
• judicial/administrative review  
 9. The report by the Secretariat and any report by the Member subject to review shall be 
circulated to the Members on an unrestricted basis, a nd shall be considered at a special meeting of the 
Committee convened for that purpose.  
 10. Members recognize the need to minimize th e burden for governments that might arise from 
unnecessary duplication of work pursuant to this proc edure and the Trade Policy Review Mechanism.  
 
C. Developing Country Members  
 
11. The Secretariat shall make technical assistance available, on request of a developing country 
Member, to facilitate that Member's  effective participation in the review.  The Secretariat shall also 
consult with the developing country Member subject  to review and shall, where appropriate, include 
in its report to the Committee an assessment of that Member's broader technical assistance and 
resource needs with respect to anti-dumping.  
 
D. Appraisal of the Mechanism  
 
12. The Committee shall undertake an appraisal  of the operation of these procedures upon 
completion of the first cycle of reviews.  The Co mmittee should seek to identify any changes which 
would enhance the operation of these procedures, and may, if appropriate, recommend that the 
Council for Trade in Goods submit to the Ministeria l Conference any proposals for the amendment of 
these procedures necessary to effectuate such changes.  
   
_______________ 
  TN/RL/W/254 
 Page 37 
 
 
  NEGOTIATIONS ON SUBSIDIES AND 
COUNTERVAILING MEASURES  
 
REPORT BY THE CHAIRMAN 
   
I. INTRODUCTION 
1. As foreseen in the fax of 8 April 2011 fro m the Chairman of the Trade Negotiations 
Committee, I am circulating this report on the ne gotiations on horizontal subsidies disciplines and 
countervailing measures.  I have prepared this report on my own responsibility as Chairman of the 
Negotiating Group, as representative of the current st atus of the Group's work on this issue.   
2. After careful consideration of the current state of play – described below – I have concluded 
that there is an insufficient basis at this time for me to present a revised legal text of the Agreement on 
Subsidies and Countervailing Measures.  There are a numbe r of reasons for this.  First, in spite of an 
extremely intensive programme of work in a variet y of formats since the beginning of the year, there 
have been no significant signs of convergence on the bracketed issues as contained in the 2008 Chair 
text.  Second, on unbracketed issues, there are only a relatively small number of such issues compared 
with anti-dumping, and a number of these have pr oven to be controversial.  While there is 
considerable convergence on a handful of unbracketed  changes, not only are these very few but they 
are confined to essentially technical issues.  Third, in the area of transposition of possible changes in 
anti-dumping provisions into their counterpart CVD provisions, to date there has been insufficient 
discussion to allow the identification of legal language  reflecting convergence.  Fourth, also unlike the 
situation for anti-dumping, the negotiations on ho rizontal subsidies and CVDs have seen the 
submission of a number of substantive new proposals in recent months.  Due to time pressure, the 
Negotiating Group has not yet fully explored the degr ee to which any elements of convergence can be 
found in respect of these proposals.   
3. In short, particularly in view of the clear mes sage from delegations that they wish to remain in 
a bottom-up mode, and would not welcome compromi se proposals from Chairs where there is no or 
little convergence among Members, I see no advantage to preparing a new SCM text at this juncture.  
To the contrary, given all of the above considerat ions, in my view a narrative report outlining the 
issues and explaining in detail the areas of convergen ce and divergence is the best and most objective 
vehicle to capture in a bottom-up way the current s ituation in these negotiations, and thus to frame the 
issues for further work.   
4. This report is organized in four sections, co rresponding to how the negotiations have been 
structured over the past year:  (1) bracketed i ssues; (2) unbracketed issues;  (3) new proposals; and 
(4) transposition.  Each section describes the issues on the table and the range of positions on each.   
II. BRACKETED ISSUES 
A. C
ERTAIN FINANCING BY LOSS-MAKING INSTITUTIONS  
5. This issue originated in a proposal by the European Union to create a new category of 
prohibited subsidies covering the provision by virtue  of government action of financing to a wide 
range of industries on terms and conditions inadeq uate to cover the long-term operating costs and 
losses of such financing, where this benefited expor ted goods.  The proposal in its original form, for a 
prohibition, did not attract a consensus, including because some opposed singling out any form of government-provided financing for tightened discip lines, and because some queried why there should 
be a prohibition of certain measures that in their vi ew were not necessarily specific subsidies, and thus TN/RL/W/254 
Page 38  
 
  not necessarily even covered by the SCM Agreement.  Discussions moved to exploration of possible 
benchmarks for calculating benefits  from such financing as an alte rnative, and the 2007 Chair text 
reflects this approach, proposing a deeming provision for the existen ce of a benefit, based on whether 
the provider institution incurred long-term losses on the provision of  loans and loan guarantees as a 
whole.  This text proved contr oversial, including because some delegations continued to reject the 
introduction of strengthened disciplines on any gover nment-provided financing,  and others queried 
the appropriateness of deeming the existence of a benefit to the recipient based on a cost-to-
government standard.   
6. The 2008 Chair text thus moved this issue into  a bracket summarizing the range of positions, 
rather than providing a revised legal text.  The issu es reflected in that bracket continue to characterize 
the discussions of this issue since then.  In pa rticular, questions remain  over which particular 
situations would be targeted; the relevance of loss es by financial instituti ons to whether a subsidy 
exists; the potential relevance of  the nature and of the creditwor thiness or equityworthiness of the 
recipients of the financing; and how key concepts would be defined.   
7. This spring, to see whether progress could be made in clarifying concepts and finding 
elements of convergence, I established a Contact  Group, composed of representatives of a small 
number of delegations representing a spectrum of view s, to consider this issue.  Although further 
developing some of the concepts, and further artic ulating delegations' positions, that work revealed 
that the same divergences in position persist.   
8. Those favouring the creation of new disciplines seek to address the provision of loans and 
loan guarantees by government financial institutions that do not operate on an independent, 
commercial basis, and that benefit from long-term g overnment support to state enterprises unable to 
obtain financing from commercial lenders, and th e provision of equity capital under the same 
circumstances to the same sorts of enterprises on term s inconsistent with the usual investment practice 
of private investors.  They see these as systemic, long-term situations not adequately disciplined by 
the existing rules.  Those opposed to any such ne w disciplines consider that such provisions would 
discriminate against state-owned enterprises, and that  subsidy benchmarks for any such situations are 
not clear.  Other concerns raised are how the vari ous terms could be defined in a way that addressed 
egregious situations without jeopa rdizing various legitimate governme nt policies including prudential 
measures taken in regard to financial crises and si milar situations, how to avoid a disproportionate 
impact on developing Members (where, it is argued,  state enterprises tend to be more common), how 
to ensure that concepts of uncreditworthiness a nd unequityworthiness were fully reflected, and why 
any such rule would address the covered government financing only when the recipients were state-
owned, and not also when provided to uncreditworthy or unequityworthy privately-owned enterprises.   
B. E
XPORT COMPETITIVENESS  
9. This issue originated in a proposal by Egypt, India, Kenya and Pakistan, proposing various 
changes to the export competitiveness provisions in  Articles 27.5 and 27.6.  The proposal would 
lengthen the period over which export competiveness in a product is determined from the current two 
consecutive calendar years to a five-year moving av erage, and would create a mechanism to allow 
reintroduction of export subsidies where export comp etitiveness in a product was lost after having 
been reached.  The proponents argue that th e moving average would prevent aberrational 
determinations of export competitiveness due to temporary fluctuations, and that the proposal 
addressing loss of export competitiveness after it h as been reached is nece ssary as the Agreement 
contains no guidance in respect of such situations.  The language in the bracket on this issue in the 
2008 Chair text indicates that while many delegatio ns support clarifying the export competitiveness 
provisions, there are differing views as to how do so, including changing the period involved, or clarifying the definition of "product", and that ther e also were divergences on whether and under what  TN/RL/W/254 
 Page 39 
 
 
  conditions to allow reintroduction of export subsidies if export competitiveness is lost after being 
reached.   
10. With a view to further clarifying the issues and exploring whether there were possible bases 
for convergence this spring I appointed a Friend of th e Chair to conduct consultations on this issue.  
That process did not, however, succeed in br idging the previously-identified gaps.   
11. On the period over which to calculate expor t competitiveness, some delegations have 
indicated some flexibility, but consider a five-year  base period excessive, while others are concerned 
over the delay this would imply for the date on wh ich export competitiveness would be found to have 
been reached.  Regarding the defi nition of "product", a number of  delegations have stressed the 
uncertainty over export competitiveness  that is caused by the ambiguity in the current text, and some 
have insisted that their ability to analyse the pr oposal, and any flexibility they might have regarding 
other changes to the export competitiveness provisions, are contingent on satisfactorily clarifying that 
definition.  The proponents, howev er, consider this to be a separate issue that should be addressed 
separately from their proposal.  Finally, regarding the possibility to reintroduce export subsidies if 
export competitiveness is lost after having been reache d, most delegations consider the proposal to be 
complex and difficult to operationalize, although some  delegations are sympathetic to the concerns 
behind it and are willing to explore possible solutions, subject to transparency and monitoring requirements.  Others, however, express considerab le scepticism over allowing such reintroduction of 
export subsidies, which they consider would upset  the delicate balance in the export competitiveness 
provisions between the need to minimize trade distorti ng effects of subsidies and the important role of 
subsidies for economic development in developing countries.   
C. 
EXPORT CREDITS – MARKET BENCHMARKS  
12. This issue was first raised in a proposal by Brazil to amend item (j) and the first paragraph of 
item (k) of the Illustrative List of Export Subsidies (Annex I) to reflect a benefit to recipient basis for 
identifying prohibited export subsidies in the forms of export credits and guarantees, in place of the 
existing cost to government-based language.  On e concern underlying the proposal is that the 
generally higher government costs of funds in de veloping compared with developed countries means 
that a cost-to-government standard for export cr edits and guarantees will put  developing country 
exports of capital goods at a structural disadvant age.  If the developing Member provides export 
credits at rates covering its cost of funds, the rates will be systematically higher than those offered by 
developed countries using their own cost of funds as the benchmark.  If the developing country were 
to match the terms offered by the developed country, it would have to provide credits at below its own 
cost of funds, and thus would run afoul of the prohibi tion in the first paragraph of item (k).  A further 
concern behind the proposal is that the cost to gove rnment language of the provision is inconsistent 
with the Agreement's general definition of "subsi dy".  Other delegations, however, opposed this 
proposal, arguing that cost-to-government is the appr oach in the pertinent in ternational arrangement 
(see next section), and that a change to benefit-to -recipient would increase uncer tainty for providers of 
export credits and would raise costs to purchasers of financed goods.    
13. The 2007 Chair text proposed replacing the cost to government language in the first 
paragraph of item (k) with language  referring to the rates available to the recipient on international 
capital markets (i.e., a benefit to recipient basis).  That text proved to be controversial, and the 2008 
text thus addressed the issue in a bracket describing the range of views expressed.   
14. This spring, I composed a Contact Group to work  on this issue with a view to clarifying 
positions and exploring whether ther e were any possible bases of c onvergence, regarding the language 
in item (k), and the similar language in item (j) ( on export credit and other guarantees and insurance).  
This proved not to be the case, however.  While ther e were some useful clarifications regarding the 
positions and reasoning of delegations, those pos itions remained essentially unchanged.  Some TN/RL/W/254 
Page 40  
 
  delegations are strongly of the view that the benef it-to-recipient standard should apply in respect of 
export credits, for reasons of fairness to devel oping Member providers of export credits, and for 
consistency with the rest of the SCM Agreement.  Some linked this issue to the especially trade 
distortive nature of these types of export subsidies.   These delegations thus support amending item (j) 
and the first paragraph of item (k) to reflect the be nefit-to-recipient basis, and they support as well 
retaining the unbracketed language in footnote 6 (rega rding the role and operation of the Illustrative 
List of Export Subsidies), which is discussed in the ne xt section of this report.  Others are strongly of 
the opposite view, that the cost-to-government languag e in item (j) and the first paragraph of item (k) 
should be retained as is, and that the proposed amen dments to footnote 6 shoul d be dropped.  In their 
view, a benefit-to-recipient standard would incr ease uncertainty over benchmarks, and hence the 
existence of subsidization, which could reduce the am ount of financing available.  They also consider 
that the overall cost of export financing would in crease under a benefit-to-recipient standard, and that 
lower financing costs are beneficial to the importin g countries in question, and that most developing 
countries are importers rather than exporters of  capital goods.  Concerns have been expressed, 
however, that flows of imports with cheap fina ncing can be disruptive to competing domestic 
industries in the importing countries. 
D. E
XPORT CREDITS – SUCCESSOR UNDERTAKINGS  
15. This issue originated in the same proposal by Brazil on export credits, which in respect of the 
second paragraph of item (k) proposed that any chang es made to the "undertaking" referred to therein 
following the conclusion of the Uruguay Round woul d need to be adopted by consensus of WTO 
Members.  For Brazil this is an issue of systemic  concern, as the "undertaking" in question is the 
Arrangement on Officially Supported Export Cred its, to which only a small number of WTO 
Members are parties, and changes to which are ne gotiated and approved at the OECD.  Via the second 
paragraph of item (k), however, that undert aking establishes a safe harbour from the SCM 
Agreement's prohibition for certain export credit prac tices, and panels have in terpreted the provision's 
reference to "successor undertaking"  to mean the most recent version of the Arrangement adopted by 
its parties.  Brazil thus is concerned that this interpretation means that a small group of countries 
operating outside the WTO can change WTO rules applicable to all Members.  A number of 
delegations including some parties to the Arrangement  objected to this proposal, which in their view 
would be fatal to the Arrangement.  They consider  that the Arrangement works well to discipline 
export credits, and that the frequent updating that  it requires to remain current with market 
developments could easily be blocked at WTO by a Member for political reasons unrelated to the 
Arrangement itself.   
16. The 2007 Chair text proposed that the parties to  the Arrangement notify any changes to it to 
the WTO, for review upon request of a Member within  a given period, after wh ich it would take effect 
for purposes of the second paragraph of item (k).  Th is proposal failed to attract convergence, so the 
issue was addressed via a descriptive bracket in the 2008 Chair text.   
17. The Contact Group on export credits also consider ed this issue, and their discussions revealed 
that the divergences in positions persist.  On the one hand some delegations consider that any rules 
that will be binding on WTO Members must be adopted  by consensus decision of those Members.  (In 
this regard, the clarification was made that only changes to the "interest rates provisions" of the 
Arrangement would need to be submitted to the WTO for approval, as only these provisions are 
relevant to the safe harbour in the second paragraph of item (k)).  Others, however, remain concerned 
over the potential for WTO Members to veto evoluti ons of the Arrangement.  They note that only a 
small number of non-OECD countries actually pr ovide medium- and long-term export credits, and 
that these countries often are invited to participate in negotiations of revisions to the Arrangement.  
They consider that the OECD has expertise in the area, and note its recent outreach initiatives to 
expand participation in the Arrangement.  In thei r view, WTO Members with no interest in export 
credits should not have the opportunity to bloc k necessary changes to the Arrangement, and one  TN/RL/W/254 
 Page 41 
 
 
  institution should not be able to block the coming  into force of agreements reached in another 
institution.  The Contact Group also explored some practical questions, including whether to be able 
to participate in decision-making regarding adoptin g agreed changes to th e Arrangement, a Member 
would have to demonstrate an interest in e xport credits, and how transparency regarding the 
Arrangement could be increased.   
III. UNBRACKETED LANGUAGE 
18. In addition to the brackets on a range of difficult issues, the 2008 Chair text also proposed a 
number of unbracketed changes to certain provisi ons of the SCM Agreement.  While there is 
considerable convergence in respect of some of th ese proposed changes, others have proven to be 
controversial.   
19. One unbracketed change which as noted above is c ontroversial due to its link to the issue of 
export credits – market benchmark is that in footnote 6 .  In effect, the proposed language would 
prevent any item in the Illustrative List of Export Subsidies from being read in an a contrario  sense to 
establish when a measure is not  an export subsidy.  A number of  delegations oppose this change for 
the same reasons that they oppose pro posed changes to items (j) and (k).  In particular, they consider 
that the language would render the cost-to-governme nt language in items (j) and (k) inoperative by 
effectively replacing it with a benefit-to-recipient sta ndard.  Some also consider that the footnote as 
amended is unnecessarily broad, as it would apply to  the entire Illustrative List, whereas the specific 
proposals relate only to items (j) and (k).  Other delegations, however, consider it important that 
benefit-to-recipient be the sole standard in the SCM Agreement for determin ing whether a financial 
contribution provides a subsidy, and for this reason support the changes to footnote 6. 
20. Another highly controversial set of unbracketed changes are those in Article 2.1(c) and 
14(d),  regarding "regulated pricing" , an issue first raised in a pr oposal from the European Union.  
The language in Article 2.1(c) would introduce guide lines for determining the specificity of subsidies 
conferred through the provision of goods or services at regulated prices, and the language in 
Article 14(d) would introduce guidelines for determ ining the existence of a benefit from goods or 
services provided at regulated prices.  The concern be hind the proposal is the trade distortion that can 
result from subsidized provision of inputs used to produce exported goods.   
21. I referred the issue of regulated pricing to a Contact Group for further work, but that work 
revealed no narrowing of positions.  Some delegati ons question the definition of "regulated", and 
wonder what sorts of "regulations" would and would not be covered.  Some also question what is 
meant by a "predominant" role of the government.  So me consider that the issue of concern is "dual" 
pricing (selling inputs for less domestically than their export or international market price), rather than 
regulated pricing.  Concerning the specificity la nguage, some consider that the proposal would 
inappropriately reverse the specificity test, while others believe that the proposed amendment is 
redundant.  Regarding the benefit guidelines, ther e are major concerns over the basis on which 
"distortion" of prices in the country of provision of the good or service would be determined, and over 
the possibility to resort to external benchmarks (whether world prices, export prices or some other 
external prices), and how it could be ensured that such external benchmarks would sufficiently "relate 
to" the conditions inside the country in question.  Those holding this view consider that estimates of 
in-country benchmarks should be used instead.   
22. Other unbracketed language, while less controversial, nonetheless has not yet reached the 
stage of real convergence.  One such instance is the proposed amendment to footnote 1 , defining the 
term "benefit"  in Article 1.1(b).  While a number of delegations support the objective and general 
direction of this footnote, many questions remain  over its drafting, including but not limited to cross-
referencing part or all of Article 14, and certa in terminology such as "otherwise commercially 
available".   TN/RL/W/254 
Page 42  
 
  23. Regarding the proposed change to the title of Article 14 , most delegations disagree that any 
amendment is necessary or desirable, and support retaining the original title.   
24. Concerning the new unbracketed Article 14.2, on pass-through  of benefits, many 
delegations support the introduction of guidelines on this issue.  There are a number of questions 
about the drafting, however, such as the meaning of "unrelated", whether the situation to be addressed 
is one between related or unrelated parties or both, and the phrase "terms more favourable than 
otherwise would have been commercially available".  Footnote 46 to Article 14.2  is controversial 
due to its references to use of world market pri ces as benchmarks in some situations, for reasons 
similar to those identified in respect of external benchmarks in the context of regulated prices.   
25. New language in Article 14.3, on allocation of subsidy benefits over time , has considerable 
support, with most delegations considering the intr oduction of guidelines on this issue to be very 
useful.  Some differences have been expressed, howev er, over a number of the concepts and language 
used, including "large" and "small" subsidies, whet her the recurring or non-recurring nature of a given 
subsidy may vary over time, how the average useful  life of assets should be determined, and how 
provisions on the time value of money could be made  operational if this concept is included.  Views 
differ as well over how prescriptive or open-ended the guidelines should be.   
26. Finally, Members have indicated a strong degree of convergence over a number of essentially 
technical changes to various provisions.  These are amendments to Article 6.4  (displacement or 
impedance); A rticle 26 (periodicity of subsidy notifications); footnote 63 (to item (d) of the 
Illustrative List of Export Subsidies); item (j) of the Illustrative List (parallel construction to that in 
the first sentence of item (k)); and Annex VII (to reflect the technical rectification of the list of 
Members in paragraph (b); and to amend the defi nition in footnote 74 of the $1,000 threshold to 
reflect the respective Ministerial Decision on Implementation-Related Issues and Concerns). 
IV. NEW PROPOSALS 
27. Contrary to anti-dumping, where the range of issues before the Group has progressively 
narrowed, there have been a significant number of recent proposals on new or renewed issues relating 
to subsidies and countervailing measures.  This lik ely reflects significant developments in the real 
world outside the negotiations.  Be that as it may, the Group has, since the 2008 Chair text was issued, 
received one or more new proposals on the followi ng issues: (i) export financing benchmarks for 
developing Members; (ii) countervail procedures;  (iii) tax and duty rebate schemes; (iv) phase-out 
period for developing Members graduating from A nnex VII; and (v) the presumption of serious 
prejudice.  A brief discussion of the status of these proposals follows. 
28. Export financing benchmarks for developing Members .  In April 2010 India submitted a 
proposal regarding benchmarks for export finance in developing countries.  Specifically, India proposed that the benchmark to be used for e xport finance in a countervailing duty investigation 
involving a developing Member expor ter be based on the benchmark fo r government securities of the 
nearest maturity plus 100 basis points.  India expl ained that it was seeking an approach to short-term 
export finance benchmarks for developing Memb ers that paralleled the OECD Arrangement's 
Commercial Interest Reference Rate ("CIRR") for l ong-term export finance.  While some delegations 
shared India's concerns about finding appropriate  commercial benchmarks in developing Members, 
other delegations were concerned about introduc ing a cost-to-government based benchmark into 
Article 14, and in any event doubted that a fixed 100 basis points premium would properly reflect 
risks.  More technically, some delegations ques tioned whether the proposed text properly captured 
India's intent to limit its proposal to export fina nce, much less to short-term export finance.  
29. Countervail procedures . Proposals regarding countervail procedures submitted since the 2008 
Chair text include papers from China in 2009 re garding new subsidy alle gations and pre-initiation  TN/RL/W/254 
 Page 43 
 
 
  consultations1, and proposals from both India and China in 2010 regarding the creation of a new 
annex to the Agreement relating to facts available.2  Regarding new subsidy allegations, China would 
in effect require that the investigating authorities initiate an investigation of the new programme on 
the basis of a written application, consultations and a finding of suffi cient evidence of subsidization, 
injury and causation.  Regarding pre-initiation consultations, China proposes to require that 
investigating authorities identify and provide ev idence regarding the subsidy programmes to be 
investigated, to provide sufficient preparation time to exporting Members, and to fully consider, and 
reply in writing to, points raised during consultations, before initiating.   Both India and China propose 
to transpose to the SCM Agreement, with various  revisions, the facts available annex in the AD 
Agreement.    
30. All four proposals have been discussed in plenar y and plurilateral formats, and have been the 
subject of work by Friends of the Chair.  On ne w subsidy allegations, there were clear divergences of 
view as to whether an investigation is initiated with r espect to a subsidized product, or with respect to 
specific subsidy programmes, as well as to whethe r the procedure proposed by China would result in 
an additional burden on investigating authorities an d undermine the ability to expeditiously complete 
investigations.  On pre-initiati on consultations, concerns were e xpressed on various aspects of China's 
proposal, including most notably the meaning and imp lications of the proposed requirement to fully 
consider, and reply in writing, to points raised.  In consultations with the Friend of the Chair, it was 
examined whether the transposition of aspects of the proposed revision to Article 5.5 of the AD 
Agreement might not address China's timing concerns.  Concerning a possible facts available annex, 
there was broad support for the principle that such an  annex should be created in the SCM Agreement.  
There were however divergent views about the extent  of the changes that would be required if the 
annex in the AD Agreement were tr ansposed to the SCM Agreement. 
31. Tax and duty rebate schemes .  India first submitted a proposal on various topics related to tax 
and duty rebate schemes in 2007 and has submitted  two subsequent revisions, most recently in 
February 2011.  There are three aspects to India's proposal.  First , India asks that "consumables and 
capital goods" be treated as "inputs consumed in th e production process" under footnote 61, such that 
taxes and duties paid on such goods could be reba ted if used for the production of an exported 
product.  Second , India proposes that investigating authorities must consider a procedure for 
confirming which inputs are consumed in the pr oduction process as "reasonable and effective" if, 
inter alia , the procedure is "developed fairly and syst ematically for determining the average amount 
of various inputs consumed in the produc tion of one unit of the exported product." Third,  India 
proposes to specify that, in a countervailing duty investigation, only the excess amount of a tax or 
duty rebate shall be treated as a subsidy. 
32. India's proposal has been discussed in plenary an d plurilateral meetings, and has also been the 
subject of work by a Friend of the Chair.  Regarding "consumables and capital goods", many delegations considered that the proposal inapprop riately expanded the inputs for which rebates should 
be allowed, and expressed concerns about the prac tical difficulties associated with allocating those 
duties and taxes to particular units of an expor ted product; India however considered that such 
allocations did not present insuperable difficulties.  Regarding "reasonable and effective" verification 
procedures, some delegations considered that the proposal was too closely tailored to India's specific 
system, that it left insufficient discretion to authorities, and more fundamentally that it based the assessment on industry averages rather  than on the actual inputs consumed by a particular firm.  India 
responded that its proposal gave sufficient latitude to  authorities, and that it was unrealistic to expect 
thousands of exporters of varying sizes and sophistica tion to maintain an exacting standard of record-
keeping for imported inputs.  Regarding the proposal th at only the excess amount of rebate be treated 
                                                     
 
1 TN/RL/GEN/160 and 161. 
2 TN/RL/GEN/164 and 169. TN/RL/W/254 
Page 44  
 
  as a subsidy, while there was support for the principle underlying the proposal, some delegations 
considered that it would pose significant practical problems for investigating authorities. 
33. Annex VII graduation .  One of the most recent proposals before the Group relates to the 
phase-out period for export subsidies of developi ng Members graduating from Annex VII.  This 
proposal was submitted by six developing Members listed in Annex VII (Plurinational State of 
Bolivia, Egypt, Honduras, India, Nicar agua and Sri Lanka) in March 2011.
3  The proponents seek to 
ensure that a Member that graduates from Annex VI I (on the basis of GNP per capita)  can benefit as 
of that point from the eight-year phase-out period for the elimination of export subsidies provided to 
other developing Members in Article 27.2(b), as well  as the possibility of further extensions pursuant 
to Article 27.4.  The proponents consider that this is a matter of equality of treatment with other 
developing Members; that it would not be reasonabl e to expect Annex VII countries, who are at the 
bottom of the development scale, to eliminate their e xport subsidies overnight; and that this is a mere 
clarification of the existing Agreemen t, not a demand for enhanced S&DT. 
34. The proposal was the subject of initial discussi ons in plenary and plurilateral session, and 
provoked significant discussion.  Some delegations di sagreed with the suggestion that this proposal 
involved a mere clarification, noting that the eight -year transition period in the current Agreement did 
not apply to Annex VII Members.  It was also observed that decisions at Doha, as reflected in 
footnote 74 to the 2008 Chair text, had already changed the balance struck in the Uruguay Round in respect of Annex VII, and that Annex VII count ries now have some forewarning because they only 
graduate after their GNP per capita, recalculate d in constant terms, exceeds $1000 for three 
consecutive years.  Finally, it was observed that some of the proponents represent an important share 
of world trade. 
35. Presumption of serious prejudice .  The most recent proposal received by the Group, from 
Canada
4, revives, with revisions, an earlier proposal to  restore the presumption of serious prejudice 
that expired at the end of 1999.  More specifically , Canada would restore Ar ticle 6.1, would add a 
fifth category of subsidy giving rise to a presumption,  would delete the footnote carving civil aircraft 
out from the presumption under Article 6.1(a) arising from a 5% ad valorem  rate of subsidization, and 
would adjust the rules relating to the calculation of th e rate of subsidization.  This issue has not been 
discussed in the Group since mid-2006, and because the revised proposal was only received in mid-
March 2011, it has not yet been discussed by the Negotiating Group.   
V. TRANSPOSITION 
36. From an early stage in the negotiations, ther e has been recognition within the Negotiating 
Group that much of the work being done on anti-dumpi ng, and particularly with respect to provisions 
on injury and procedures, was also potentially rele vant in the context of countervailing measures.  
Thus, many of the proposals tabled on anti-dumping issues specifically call for or raise the possibility of parallel changes in the SCM Agreement.
5  When the previous Chair of the Negotiating Group 
                                                      
3 TN/RL/GEN/177/Rev.2. 
4 TN/RL/GEN/112/Rev.2. 
5 This includes, for example, proposals or discussion papers by:  Brazil, China, the EU, India and the 
United States concerning "facts available" (respec tively, TN/RL/W/19, TN/RL/GEN/169, TN/RL/GEN/93, 
TN/RL/GEN/164 and TN/RL/W/153); Brazil and the United States on identification of parties 
(TN/RL/GEN/89); the United States on causation (TN/RL/GEN/128), anti-circumvention (TN/RL/GEN/106), 
access to non-confidential in formation (TN/RL/GEN/90), on-the-spot investigati ons (TN/RL/GEN/132) and 
preliminary determinations (TN/RL/GEN/133); Canada  on product under consideration (TN/RL/GEN/73), 
sunset (TN/RL/GEN/61) and public interest (TN/RL/GEN/8 5); Canada and the United States on explanations of 
determinations and decisions (respectively, TN/RL/GEN/21 and TN/RL/W/35), and the EU on lesser duty rule 
(TN/RL/W/13 and TN/RL/W/30).   TN/RL/W/254 
 Page 45 
 
 
  issued the first Chair texts in December 2007, he specifically noted his intention to transpose anti-
dumping rules to the countervail context, where relevant and appropriate.6   
37. Despite this general recognition, the Group did not begin serious work on transposition issues 
until 2009.  In response to the sugg estions of various delegations, my  predecessor in June 2009 issued 
two side by side documents as a basis to begin tec hnical work.  One of these identified all differences 
between the un-bracketed language in the 2008 Chai r anti-dumping text and counterpart language in 
the countervail text, while the other identified all differences between the existing (Uruguay Round) 
AD Agreement and counterpart pr ovisions in the SCM Agreement.7  By this point, the 2008 Chair 
text contained no proposed text on a number of important "bracketed" issues, and therefore it was of 
course not possible to prepare a comparator doc ument on these issues, much less to consider 
transposition on these issues. 
38. The Group conducted a first, preliminary review of these differences in a series of plenary 
meetings between the summer of 2009 and the spri ng of 2010.  The discussions revealed a notable 
degree of convergence on the transposition of much, but by no means all, of the un-bracketed text in TN/RL/W/236, although sometimes with necessary m odifications, and subject of course to final 
agreement regarding the anti-dumping text itself.  There was less convergen ce regarding the possible 
transposition of language from the existing AD Agre ement into the SCM Agreement (or vice-versa).  
It is clear in any event that further work is requi red to consider the desirability of transposing anti-
dumping language into the countervailing context, as we ll as what adjustments would be required in 
such cases to ensure that  the language is fully suited to the di ffering circumstances of countervail.  
Concrete proposals from delegations on tran sposition could facilitate such work.   
 
 
_______________ 
 
 
 
                                                     
 
 6 "…since the beginning of these negotiations, there ha s been a broad acceptance that changes to the 
anti-dumping rules should, where relevant and appropriate,  also be made to the rules regarding countervailing 
measures, and that is also my intention.  I have not in  these texts transposed the draft revisions in the anti-
dumping rules into the countervail cont ext because our discussions have fo cused on anti-dumping and because 
such a transposition will require further technical discussion."  (TN/RL/W/236)    
7 TN/RL/W/238 and 240, respectively. TN/RL/W/254 
Page 46  
 
  NEGOTIATIONS ON FISHERIES SUBSIDIES 
 
 
REPORT BY THE CHAIRMAN 
 
 
I. INTRODUCTION 
 
1. As foreseen in the fax of 8 April 2011 fro m the Chairman of the Trade Negotiations 
Committee, I am circulating this report on the fisher ies subsidies negotiations.  I have prepared the 
report on my own responsibility as Chairman of the Negotiating Group on Rules, as representative of 
the current status of the Group's work on this issue.  I must emphasize in this regard that the structure 
and indeed the content of this report of course are without prejudice to the position of any delegation. 
2. After careful consideration of the current state of play – described below – I have concluded 
that I am not now in a position to present a revised legal text on fisheries subs idies.  Rather, the only 
option available to me at this juncture for both capturing such progress as has been made, and more significantly, for identifying the numerous remaini ng gaps in Members' positions, is to present a 
detailed narrative report.   
3. In reaching this conclusion in these difficult circ umstances, I have heard very clearly the main 
message from Members to Chairs that for now, an y Chair-produced documents must be of a bottom-
up nature.  That is, Members have made plain that they would not welcome compromise proposals from Chairs that would seek artificially to bridge the real gaps in positions that  remain.  Applying this 
standard to the fisheries subsidies negotiations, at  present there is too little convergence on even the 
technical issues, and indeed virtually none on the co re substantive issues, for there to be anything to 
put into a bottom-up, convergence legal text, and ther e are no fisheries subsidies disciplines already in 
existence to which we could refer or revert.  Nor w ould a text with either a small range of options, or 
with all positions and proposals pr esented as "options", be feasible.  The former would require me to 
pick and choose, and thus would not be bottom- up.  The latter would probably be impossible to 
produce as one text that was comprehensible.  In an y case, such a text would be nothing more than a 
compilation of proposals, which I consider could only impede movement toward convergence.   
4. As will be apparent from the report's descri ption of the issues, this negotiation poses 
significant challenges, not only for me as the Chair, but also for the negotiato rs.  One main reason is 
the interlinked nature of the issues involved.  In pa rticular, the main elements of the negotiation – the 
prohibition, general exceptions, special and differe ntial treatment, and fisheries management – are 
interdependent, and need to be internally balanced  for any proposed package of disciplines, whatever 
its level of ambition, to be coherent.  Thus, adjust ments to any one of these elements will generally 
require adjustments in the others.  A further main challenge is the lack of agreement over the scope 
and definition of some of the basic terms and c oncepts under negotiation, many of which are highly 
technical and pertain to areas that are new to  WTO.  These factors underlie and explain the 
complexity of the proposals on the table and of the discussions, and the difficulty of evaluating alternative visions of the disciplines.   
5. The original Chair text, circulated in late  2007 by my predecessor, Ambassador Valles, was 
an arbitrated, unbracketed comprehensive text, prese nted in response to the Ministerial mandate from 
Hong Kong that he should prepare such a text, to serve as the basis for the final stage of the 
negotiations.  Although many delega tions supported some elements of that text, it proved to be 
controversial, and did not attract sufficient converg ence even in respect of its approach and core 
concepts for the Chair to be able in late 2008, wh en he circulated revised draft anti-dumping and SCM 
Agreement texts, also to table a revised text on fish eries subsidies.  Instead, he circulated a range of 
detailed questions with the same structure as the 2007 fisheries subsidies text (referred to as the  TN/RL/W/254 
 Page 47 
 
 
  "Roadmap") to guide the further discussions, in the hope that by returning to a less-detailed, more 
conceptual debate, some clarity would emerge as to the best way to generate the needed convergence.  
Discussions based on the Roadmap occupied mo st of 2009, but little convergence was evident; 
delegations' comments generally reflected their pr eviously expressed positions.  Thus, while some 
conceptual clarification was achieved, little ne w flexibility was expressed during the Roadmap 
discussions.   
6. After those discussions ended, Members began to  submit new proposals.  While initially there 
were only a few, by late 2010 and to date in 2011 proposals proliferated, with much of the 
Negotiating Group's time in our intensive meeting schedule since January spent on considering these 
proposals.  While many of the proposals contain new ideas and some suggest new approaches on 
certain issues, unfortunately in their totality (and with a few exceptions) these could not be 
characterized as convergence proposals.  Rather, they generally reflect and elaborate on the already well-known positions of their proponents.  Nor h as there been movement toward convergence over 
the course of the debate on the proposals.  Thus, in spite of many meetings since the beginning of the 
year – indeed a nearly-continuous session of the Negotiating Group – and in spite of the wealth of 
new proposals, little tangible progress on the core issu es has been made.  In short, notwithstanding 
intensive work and greater clarity in scoping several issues, the fisheries subsidies negotiations remain 
in more or less the same imp asse as at the end of 2008 when th e Roadmap was circulated, with 
positions if anything hardening since then.   
7. In this report I describe in a detailed and stru ctured way the positions and in particular the 
blockages on the main issues in the negotiations.  It is my hope that as we move forward, this 
comprehensive presentation will assist negotiators to reframe the debate and refocus the work in a 
way that has the best chance of increasing converg ence in respect of the most difficult and critical 
issues.  I also describe the areas of convergence th at have emerged in our discussions.  While this 
convergence is limited, often conditional, and mainly  restricted to technical issues, it is nonetheless 
important and thus is memorialized in detail.   
8. The structure of the report follows that of the 2007 Chair text.  Virtually all delegations have 
indicated that that structure is a valid basis for discussions, and most consider it an acceptable 
structure for eventual disciplines.  Furthermore, mo st of the proposals that have been submitted since 
circulation of the 2007 text follow its structure.   
9. By way of background, the structure of the 2007 Chair text consists of  a prohibition, general 
exceptions, special and differential treatment, genera l disciplines (mainly related to adverse effects of 
certain subsidies), fisheries management provisi ons, notification and surveillance provisions, and 
transitional and dispute settlement provisions.   
10. The proposed prohibition in the 2007 Chair text is  in the form of a positive list of subsidies 
(in the sense of Article 1.1 of the SCM Agreemen t, insofar as they are sp ecific in the sense of 
Article 1.2 of the Agreement).  The scope of the prohi bitions of certain of the listed types of subsidies 
would be modulated by general exceptions, acce ss to which would be conditional upon compliance 
with certain fisheries management provisions.  Fo r developing Members, in addition to the general 
exceptions, there would be special and differential treatment consisting of a sliding scale of further 
exceptions from particular prohibitions, calibrated to  the nature, scale and geographic scope of the 
activities involved.  As in the case of general ex ceptions, access to most of S&DT exceptions would 
be conditional upon implementing certain fisher ies management obligations.  The fisheries 
management obligations would be to establish and implement fisheries management systems based on 
internationally-recognized best practices, including  regular science-based stock assessments, with the 
operation of the systems and the results of the stock assessments subject to peer review (in a relevant body of the UN Food and Agriculture Organization ("FAO")) prior to the granting of a subsidy for which an exception was being invoked.   TN/RL/W/254 
Page 48  
 
  11. Under the 2007 Chair text, the general discipline would provide for a remedy where any 
Member caused, through the use of any specific s ubsidy (in the sense of Articles 1.1 and 1.2 of the 
SCM Agreement), certain adverse effects in respect of fish stocks in which another Member had an identifiable fishing interest.  It also would a ttribute subsidies to the Member conferring them, 
regardless of the flag of the vessel involved or application of rules of origin to the fisheries products.  
The notification and surveillance provisions woul d, among other things, require notification in 
advance of the granting of a subsidy for which an  exception (general or S&DT) was invoked, and 
such notification would need to contain sufficient information demonstrating that the subsidy met the 
terms and conditions to qualify fo r the particular exception.  Under the dispute settlement provisions, 
among other things, non-notified subsidies for wh ich exceptions are invoked would be rebuttably 
presumed to be prohibited.  Finally, transition pe riods (longer for developing than for developed 
Members) would be provided for Members to bring their (notified) existing inconsistent programmes 
into conformity with the new disciplines.   
II. ASSESSMENT BY THE CHAIR OF THE MAIN CHALLENGES 
12. The longstanding blockage in these negotiations exists in spite of the strong consensus among 
delegations of all sizes and levels of development that the state of global fisheries resources is 
alarming and getting worse.  Indeed all delegations, wh en referring to data, rely on the same statistics 
– those published by the FAO – the latest of which show that 85 per cent of world fish stocks are either fully- or over-exploited.  All recognize that this  is a crisis of exceptionally serious implications 
for all humankind, and particularly for the poor in many countries who are heavily dependent on fisheries as a source of nutrition and employment.  No r is there disagreement that developing as well 
as developed countries are major participants in globa l capture fishing, and that all countries face a 
common problem and share responsibility to contribu te to finding solutions, although not necessarily 
on a uniform basis.  Furthermore, most agree that s ubsidies play a major role in contributing to these 
problems, and that this is what is behind the ne gotiating mandate to strengthen disciplines on fisheries 
subsidies, including th rough a prohibition.  
13. Given this strong convergence as to the nature and extent of the problem, and as to the role of 
subsidies, what then is the problem?  Why have these negotiations been underway for 10 years with 
little tangible progress in finding a solution?  In my view, it seems that most (although not all) delegations, rather than seeking to build convergence by indicating acceptance of the appropriate level 
of disciplines (and of the policy changes that this would imply), to effectively address what is undeniably a common and rapidly worsening problem, appear to be focusing principally on 
maintaining their own status quo by placing on "others" the main responsibility to implement 
solutions, while minimizing the impact of disciplines on their own activities.  Thus in spite of the nearly universal calls for disciplining subsidies in an effective way, many delegations in practice seem 
to elevate the exceptions above the disciplines.  Fo r some developed Members, a main reason given is 
that subsidies are necessary to protect traditional wa ys of life, vulnerable coastal communities, and 
jobs in the fisheries sector.  For many developing Members, a main reason often cited is the need for 
policy space to subsidize in order to harness fisher ies as a basis for development, economic growth, 
and employment.  In the face of the sharp and con tinuing declines in the fisheries resources, however, 
it is hard to see how such strategies can either pr otect communities and jobs or be a source of food 
security and stable growth over the long-term.   
14. In spite of all this, I see the logic behind th e negotiating mandate as essentially optimistic.  
That is, that a unified, long-term strategic appro ach to cooperating to rationalize economic signals – 
including by giving priority to collectively re ducing the level of capacity- and effort-enhancing 
subsidies – can actively promote and contribute to profitability of global fisheries, with the hugely 
advantageous additional benefits of economic and environmental su stainability.  In particular, 
fisheries are often compared to the prisoner's dile mma:  non-cooperative pursuit of individual payoffs 
leads to overfishing, which in turn imposes econom ic loss (not to mention negative environmental  TN/RL/W/254 
 Page 49 
 
 
  effects) on all parties involved.  In fact, it is wi dely-accepted that the economic benefits lost due to 
overfishing are significant – a World Bank Report gives an estimate of US$50 billion annually, without counting the out-of-pocket additional costs of subsidies (estimated to be at least $US16 
billion annually).  To put these figures in context, th e value of the total global marine fish catch is 
around $US90 billion.  Like the pr isoner's dilemma, however, fisheries are not a zero-sum game.  
Successful subsidy negotiations can help bring abou t a situation where profitability and economic and 
environmental stability are mutually reinforcing,  contributing to sustainable wealth creation. 
15. In order for the negotiations to make significant progress, I am of the view that negotiators 
will have to focus more on these incontrovertible  realities no matter how inconvenient, and less on 
protecting their short-term defensive interests.  Un less this happens, I do not hold great prospects for 
the fisheries subsidies negotiations.   
III. SPECIFIC AREAS WHERE GAPS REMAIN WIDE  
A. 
PROHIBITION AND GENERAL EXCEPTIONS  
1. Underlying situation 
16. Concerning the basic discipline to be established,  the relevant part of the negotiating mandate 
from Ministers at Hong Kong is to "strengthen  disciplines on subsidies in the fisheries sector, 
including through the prohibition  of certain fisheries subsidies  that contribute to overcapacity and 
over-fishing" .   
17. Views are quite divided over the breadth of th e eventual prohibition (as modulated by general 
exceptions).  Much of this divergence is a reflec tion of delegations' differe nt positions as to which 
types of subsidies should be targeted by new di sciplines, given their different views over which 
subsidies (under what circumstances) cont ribute to overcapacity and overfishing.   
18. Thus, while much of the debate and many propo sals continue to be based on the prohibitions 
as proposed in the 2007 Chair text, there is little or no outright agreement within the Negotiating 
Group as to how a prohibition of any given type of s ubsidy should be framed.  In particular, although 
some delegations, while preferring a top-down appr oach, strongly support both the categories of 
subsidies proposed for prohibition in the Chair text  and the proposed scoping of each category, others 
strongly disagree, considering the proposed prohibitions  in the Chair text to be too numerous and too 
strict.  These latter Members' support for prohibition of  certain categories of subsidies is often hedged 
by proposed reductions in its scope, proposed ge neral exceptions, and proposed conditionalities on the 
prohibition itself.  In turn, however, such proposed limitations on the possible prohibitions are very controversial with the Members a dvocating a broad and strict prohib ition.  Such convergence as exists 
regarding subsidies to be prohibited therefor e is limited and in many cases conditional.   
2. Horizontal issues and proposals 
19. As noted, some delegations strongly support a broad and strict prohibition  of fisheries 
subsidies, subject to narrowly defined exceptions .  In the view of these Members, a broad 
prohibition is the best way to ensure that the discip line is effective in constraining harmful subsidies, 
as any subsidy that reduces the costs of fishing and related activities contributes to structural 
overcapacity, creates incentives to overfish, and places additional pressure on the management 
systems themselves.  Other delegations, while acknowledging the existence of overcapacity and 
overfishing, attribute this largely to Illegal, Unre ported and Unregulated ("IUU") fishing, and consider 
that there is no a priori  link between subsidies and overcapacity or overfishing.  They therefore favour 
a more conditional approach to prohibition .  Specific proposals of this type are to apply a 
prohibition only if a subsidy has been proven in a pa rticular situation to have caused overcapacity or TN/RL/W/254 
Page 50  
 
  overfishing, or only if there is no fisheries manageme nt in place or inadequate management, or only in 
the event that such a subsidy would be contrary to  certain parameters such as capacity or purpose.  
Although all delegations have been willing to engage on the basis of a positive list approach as in the 
2007 Chair text, they have very different views as to the length, content and operation of the list, 
reflecting their underlying differences as to the effect of subsidies on overcapacity and overfishing.   
20. One cross-cutting issue where views have remained divided since the outset of the 
negotiations has to do with whether at least some forms of subsidies benefiting the "artisanal" or 
"small-scale" fisheries  of all Members should be exempted from any prohibition.  Advocates of a 
general exception for subsidies to such fisheries point  out that regardless of the development status of 
a Member, small-scale or artisanal fisheries tend to  be conducted by individuals who are economically 
and socially disadvantaged in relation to the r est of the population, and who live in remote, 
underdeveloped coastal areas, and that due to thei r small scale, these fisheries have little or no 
possibility to contribute to global overcapacity or overfishing.   
21. Others, however, see no justification for su ch an exception for developed Members, 
considering that those Members' artisanal and small-scale fisheries are much wealthier and better-
equipped than the artisanal and small-scale fisheries of developing countries, such that no one set of 
definitions or parameters could be used to describe the potentially eligible fisheries of all Members.  
These delegations also take the position that the de mandeurs for a general exception have advanced 
neither clear descriptions or criteria for identifying  "small-scale" fisheries of developed Members, nor 
convincing justifications why those fisheries need s ubsidization.  Their view therefore is that any 
exceptions for subsidies to artisanal and small-scale fi sheries should be strictly limited to the special 
and differential treatment provisions.   
22. A somewhat related horizontal issue that h as been raised in several proposals is a de minimis  
general exception, with a higher threshold for deve loping Members, possibly differentiated according 
to their size and/or share of global capture.  Under this approach, Members would be able to provide 
subsidies of any type, up to the threshold (expressed either in absolute terms or as a percentage of 
total catch value or some other indicator).  Advocates of this approach argue th at it would be a simple, 
easily-administered way to address the concerns of developed as well as developing Members in 
respect of their artisanal or small-scale fisheri es, without having to grapple with the difficult-to-
resolve definitional issues.   
23. Many Members, however, are concerned that the accumulation of individual de minimis  
amounts would add up to large sums of money, with  potentially large consequences, and further that 
individual de minimis  amounts, if concentrated in a given type of subsidy, or a given fishery, also 
could have a significant impact on the fisheries involve d.  In this regard, questions have been raised 
concerning the relationship of a de minimis  provision to other provisions, such as a prohibition on 
subsidies in relation to overfished fisheries, or to the general disciplines.  In addition, some 
delegations have indicated that without knowing the size of the de minimis  cap (no proponent has 
suggested a specific figure), they cannot assess the impact of such pr oposals – a cap set at 0.1 per cent 
of landed value, for example, would be far different from a cap set at 1 per cent or more, or from a cap 
based on another parameter.  Some also question the simplicity of the approach, noting the potential 
difficulty of measuring both the subsidy amounts a nd the thresholds.  Furthermore, as noted, many 
Members are sceptical about the comp arability of the small-scale sector s of developed and developing 
Members, and of the former's need for subsidization.   
24. Finally, most if not all delegations  take the view that subsidies for natural disaster relief  
should be allowed as an exception from the prohibition.  Most consider that the nature and level of 
such subsidization should be aimed at restoring the activity to its pre-disaster state, subject to the 
results of scientific assessment to establish the post- disaster state of the fisheries resources.  Some 
argue that other sorts of disaster relief subsidies also should be permitted (e.g. for man-made disasters,  TN/RL/W/254 
 Page 51 
 
 
  economic or financial crises, wars, etc.).  Views remain considerably divi ded over such a broadening 
of this possible exception.   
3. Specific categories of subsidies proposed for prohibition (modulated by general 
exceptions) 
(a) Subsidies in respect of which differences of view are greatest 
(i) Subsidies for vessel construction, repair, modification 
25. Most delegations consider that in principle s ubsidies for construction of fishing and service 
vessels should be prohibited, on the basis of the la rge overhang of excess capacity in relation to 
sustainable fishing levels (estimated at more than twice the level needed).  Delegations also generally 
agree that subsidies for vessel modifications ex clusively for improving on-board safety, or for 
adoption of environmentally-friendl y gear and techniques, or for equipment necessary for compliance 
with fisheries management, should be exempted fro m the prohibition, and many also support vessel 
modifications to improve food safety, so long as none of these sorts of modifications increase vessel capacity.  There are, in this context, different vi ews on which parameters to use to define capacity, 
and whether any list of such parameters should be cl osed or indicative.  Most Members also consider 
that any such exemptions should be conditional on adequate fisheri es management being in place.  
One delegation has proposed, however, based on the argument that fisheries management should be 
the core of the discipline or central to determini ng the scope and application of the prohibition, that 
subject to fisheries management and adverse effects rules, such a prohibition would be inapplicable in 
a variety of circumstances (including for new vessel s with lower total capacity than older ones being 
replaced, for vessels for certain small-scale operati ons, and for certain vessel modifications, including 
for safety or fisheries-management reasons that do not increase certain capacity-related parameters).  
Many others consider that such carve-outs would render a prohibition on vessel capital cost subsidies 
completely ineffective, and disagree as well with th e premise that fisheries management, rather than 
subsidies disciplines, should be the core element of the disciplines.  
(ii) Subsidies for operating costs of vessels and of in- or near-port processing activities 
26. In respect of subsidies for operating costs of fishing and service vessels, a number of 
Members consider that all such subsidies should be prohibited because they contribute directly to 
overcapacity and overfishing, allowing vessels to operate  at lower cost, thus to fish longer and further 
from shore than otherwise would be possible, and thus to continue to exploit overfished stocks in spite 
of diminishing yields.  Some others consider th at with proper fisheries management, operating cost 
subsidies will not contribute to overcapacity and overfishing, and one proposal would move operating 
cost subsidies from the prohibited list to an advers e effects provision.  Some who generally favour a 
prohibition of operating costs nevertheless consider that different operating cost subsidies may have 
different natures and degrees of severity and th us should not necessarily all receive the same 
treatment.  For example, one proposal would limit the prohibition to "direct" operating costs, with exemptions in respect of certain small-scale fishi ng activities, and for certain social welfare purposes.  
A number of delegations have qu estioned how subsidies for personnel costs can be differentiated from 
income supports and social welfare payments, and wh ether different rules should apply.  Some have 
questioned the link between subsidies for on-shore activities such as processing and overcapacity or 
overfishing, while others consider that such subsid ies artificially stimulate demand for fish and fishing 
by increasing the profitability of such activities.   
27. Among the operating costs proposed by most delega tions for prohibition, fuel subsidies are by 
far the most controversial.  Some delegations poi nt to fuel subsidies as the most harmful of all 
operating cost subsidies, indeed of all fisheries subs idies, given their absolute magnitude (estimated at 
$6 billion annually), their direct relationship to fish ing effort, and the large share of operating costs TN/RL/W/254 
Page 52  
 
  (approximately 60 per cent) accounted for by fuel, especially in respect of high seas fishing.  It has 
been suggested that fuel subsidies perhaps be broke n out into a separate category in the disciplines, 
given their importance and particularities.  Some cons ider that all fuel subsidies, whether provided on 
a specific or horizontally-available basis, should be prohibited, and some have indicated a willingness to find a tailored solution to this issue.  Some go fu rther, considering that the questions related to fuel 
in the fisheries sector go beyond subsidies and in fa ct involve Members' fuel pricing policies, which 
in turn are a function of their fuel tax policies.   For these Members it would be an unfair and anti-
environment outcome if fuel tax exemptions for the fisheries sector by Members with environmentally-motivated high fuel taxes and pr ices were treated as prohibited subsidies, while 
Members that as a matter of policy maintained low fuel taxes and prices and gave no tax exemptions 
were thus not affected by the disciplines.  Othe rs, however, are greatly concerned over the possible 
intrusion of WTO rules into Members' domestic taxation policies and systems as such.  Furthermore, some doubts have been expressed over the link be tween fuel subsidies and overcapacity and 
overfishing.   
(iii) Subsidies for certain infrastructure 
28. Views are considerably divided regarding "gen eral" and other infrastructure, and regarding 
what if any infrastructure subsidies should be proh ibited under new disciplines.  On the first issue, 
some delegations consider that all forms of "port"  infrastructure (even that which is exclusively or 
predominantly for marine wild capture fishing) constitute "general" infrastructure, which is not 
covered by the SCM Agreement and thus should not be captured by or  even referred to in the new 
disciplines.  Some others, however, consider that while certain kinds of port infrastructure may be 
"general", port infrastructure and other physical  port facilities exclusively or predominantly for 
activities related to marine wild capture fisherie s do not fall within the rubric of "general" 
infrastructure, and that subsidies for such infrastructure thus are covered by the SCM Agreement and 
are relevant to new disciplines on fisheries subsidies.   
29. Concerning whether any port infrastructure subsid ies should be prohibited, some delegations 
take the view that to the extent that any port infr astructure subsidies related to marine wild capture 
fishing are covered by the SCM Agreement, these s hould not be subject to new fisheries subsidies 
disciplines.  In the opinion of these delegations , such subsidies do not and cannot contribute to 
overcapacity and overfishing, and to the contrary ar e beneficial for sustainability, as fishing ports are 
often the centres for management operations (meas uring catch, inspecting and monitoring vessels, 
etc.)   
30. The opposite view also is held, however.  A number  of delegations consider that at least some 
kinds of infrastructure in ports (e.g. fish landing and storage facilities) are directly related to fishing 
activities, and that subsidies to these kinds of infr astructure would directly reduce costs that fishers 
otherwise would have to bear themselves, thus encouraging increased fishing effort.  Thus, they 
advocate prohibiting infrastructure subsidies of this sort .  Some have noted that if user fees reflecting 
the value of the services were collected, there would be no subsidy.   
31. Finally, the further proposal has been made to  discipline infrastructure subsidies on the basis 
of an adverse effects test.  That is, rather than being prohibited outright, such subsidies would subject 
to remedies if in particular cases they were f ound to contribute to over capacity and overfishing. 
(iv) Income support 
32. Views are divided regarding the meaning and sc ope of the term "income support", including 
the extent to which it overlaps with the term "per sonnel costs", and regarding whether some or all 
income supports for natural and/or  legal persons engaged in marine  wild capture fishing should be 
prohibited.  Concerning the term "income support", di fferent types of supports have been identified,  TN/RL/W/254 
 Page 53 
 
 
  including payments to fishworkers not to fish or wh ile not fishing, payments to fishworkers to top up 
their income while fishing, unemployment insuran ce payments to fishworkers, payments to vessel 
owners/employers for personnel costs, social charges, et c.  One issue pointed out in this regard is that 
in some countries, fishworkers do not qualify for the generally available unemployment or social 
security payments, necessitating the establishment of  fisheries-specific schemes.  No consensus has 
been found as to which sorts of payments should be  considered "income suppor ts", and which if any 
should be prohibited under new disciplines.   
33. Some consider that disciplines should disti nguish between income support payments to 
enterprises and those to individuals.  In this regard, one suggestion is to make clear in the context of a 
prohibition on operating cost subsidies that "personnel  costs" and "social charges" referred to therein 
do not cover early retirement or  redeployment payments.   
34. Delegations favouring a prohibition on income s upports argue that such subsidies contribute 
to maintaining in the industry individuals and en terprises that otherwise might exit the business, and 
that this in turn maintains overcapacity and cr eates pressure to overfish.  In the view of some, 
temporary payments to respond to unexpected crises are not the problem, but rather structural, on-
going payments, which have a systemic effect – if the fishers know that they will receive the 
payments they will have every incentive to continue to fish without regard to the profitability of the 
activity, and no incentive to seek other economically  self-sustaining occupations.  One proposal in 
this regard is to define prohibited income suppor ts as including support for active or latent fishing 
effort.  
35. Those opposed to a prohibition on income supports consider that paying fishworkers not to 
fish is beneficial to fisheries resources, and that  if good fisheries management is in place overfishing 
will not occur.  Some also consider all such payments  to be part of the "social safety net" that should 
be completely exempt from new disciplines, on the gr ounds that this is necessary government policy.   
(v) Price support for products of marine wild capture fishing 
36. Views also remain divided on price supports .  Many delegations strongly support a 
prohibition, considering that such subsidies are among those most directly contributing to 
overcapacity and overfishing, by enhancing the reve nues and profits of fishing.  Some delegations 
have concerns, however, that a prohibition on pri ce supports could interfere  with domestic food 
security programmes, including government purchasing programmes.  One delegation proposes 
instead of prohibiting price supports to subject them to a discipline based on adverse effects.  Some 
point to the adverse trade effects that can be caused by price supports, while others consider that any 
such trade effects already are covered by the existing provisions of the SCM Agreement.   
(vi) Subsidies that support destructive fishing practices 
37. Some proposals address the issue of destructive fishing practices.  One such proposal would 
add to the prohibited list any subs idy provided to vessels engaged in practices that have or may have 
negative effects on vulnerable marine ecosystems and habitats (examples given being bottom fishing 
and large scale drift-net fishing), which practices are not conducted in accordance with relevant 
international instruments.  Some delegations support such a prohibition in principle, in view of the 
importance of the issue of destructive fishing prac tices, but note that the drafting would need to be 
precise.  Others, while supporting the international wo rk being done in other fora to halt destructive 
fishing practices, question whether the WTO is the right  institution to take the lead on this issue given 
the absence of an international con sensus to ban such practices.  So me disagree with the proposal on 
the grounds that its scope, and that of the subsid ies it would affect, could not be known in advance, 
such that the discipline would be unclear a nd potentially very sweeping in its impact.   TN/RL/W/254 
Page 54  
 
  38. Other proposals refer to destructive fishing pr actices (examples – dynamiting, poisoning) in 
the context of conditionalities for S&DT exceptions.  In particular, under these proposals, engaging in 
destructive fishing practices would disqualify a v essel or fisher from access to the exceptions in 
question.   
(vii) Subsidies in respect of overfished fisheries 
39. Many delegations consider that if the prohibi tion is to take the form of a positive list of 
prohibited subsidies, it must be backed up with a further prohibition on any other types of subsidies 
(not contained in the prohibited list) that are pr ovided in respect of any fishing vessel or fishing 
activity affecting fisheries in an already-overfished  condition.  These delegations further argue that 
the shorter the eventual list of prohibited subsid ies, the more important this back-up prohibition 
becomes.  In the view of these delegations, there is  no possible justification for subsidized fishing on 
stocks that already are depleted, and a major loophole  for harmful subsidization in respect of the most 
vulnerable fish stocks would be opene d without such a backup prohibition.  
40. A number of other delegations strongly disagree with the concept of such a back-up 
prohibition.  Reasons include that the scope of a pr ohibition of this type w ould be unclear and could 
potentially be very broad, even possibly sweeping in subsidies necessar y for stock recovery; that the 
particular subsidies that would be subject to such a prohibition could not be known with certainty; that 
it is unclear how and by whom the overfished fish eries, in respect of which the prohibition would 
apply, would be identified; and that the overall e ffect of such a provision would be to convert the 
bottom-up list to a top-down broad prohibition.   
(b) Subsidies in respect of which some convergence exists 
(i) Subsidies for transfer of vessels 
41. The 2007 Chair text proposes the prohibition of subsidies on the transfer of fishing or service 
vessels to third countries, including through the creati on of joint ventures with third country partners.  
This proposed prohibition is relatively uncontrovers ial, and a number of dele gations have pointed out 
that such transferred vessels often become enga ged in IUU fishing activities.  Most delegations 
support elimination of such subsidies as a way to  contribute to control of those activities.   
42. One (developed) Member has proposed exempting developing Members from this 
prohibition, subject to certain conditionalities.  There has been little interest from developing Members in this proposal, however.   
(ii) Subsidies to IUU vessels 
43. The 2007 Chair text also proposes the prohibition of subsidies on vessels engaged in IUU 
fishing.  Delegations generally support the principl e behind this provision, but a number question how 
it would work in practice, as no government would knowingly subsidize such activities.  Rather, it 
would be the individuals operating the vessels that w ould make the decision to engage in IUU fishing, 
after receiving a subsidy that was otherwise permitt ed.  Given these considerations, some alternative 
proposals have been tabled, including establishi ng domestic procedures to address IUU fishing, 
requiring repayment of subsidies, and certain legal presumptions concerning subsidies to IUU fishing.  
Questions have been raised over how far in to the substance of addressing IUU fishing per se  the WTO 
can go, beyond disciplining subsidization supporting such activities.  TN/RL/W/254 
 Page 55 
 
 
  (iii) Subsidies for onward transfer by a payer govern ment of foreign access rights acquired under 
fisheries access agreements, subject to  provisions for developing Members 
44. The 2007 Chair text proposes the prohibition of subs idies arising from the further transfer, by 
a payer government, of access rights that it has acquired from another Member government to fisheries within the jurisdiction of the other Member , subject to the clarification that government-to-
government payments for access rights are not deemed to be subsidies.  Thus, it is the subsidized 
transfer of the rights by the payer government to its own distant water fishing fleet that would be 
prohibited.  In recognition of the economic im portance to a number of developing Members, 
particularly certain Pacific Island States, of the access fees that they receive from foreign governments, the Chair text further proposes, howev er, that the payer government's subsidized 
transfer of the fishing rights to its distant water fleet would be exempt from the prohibition if the 
access is to fisheries in the waters of a developing Member, and provided that a range of sustainability 
and transparency conditions are met.  
45. Most Members support these provisions as propo sed in the Chair text, although some 
question that text's placement of the exception in th e S&DT provisions, given that the principal distant 
water fleets benefitting from it would be from develope d Members.  Delegations also see a distinction 
between these situations, which involve cash for access in distant waters, and arrangements between 
neighbouring countries for reciprocal access to one  anothers' Exclusive Economic Zones ("EEZs") or 
jurisdictional waters.  Most consider that the la tter situations should not be subject to the new 
disciplines.   
B. 
SPECIAL AND DIFFERENTIAL TREATM ENT OF DEVELOPING MEMBERS  
1. Underlying situation 
46. The two negotiating mandates make clear that speci al and differential treatment of developing 
Members is to be an integral part of new disciplin es on fisheries subsidies, and this view is shared by 
all delegations.  As a gene ral matter, virtually all of the proposal s for special and differential treatment 
are based on permanent exceptions from various proh ibitions, in various circumstances and subject to 
various conditions.  That said, there are fundament ally different visions as to how S&DT should be 
structured, what particular exceptions should be prov ided in which particular circumstances, and what 
conditions should apply to the different exceptions.   
47. Among the considerations cited fre quently in this context is the important role of developing 
countries in world marine capture production.  Accord ing to FAO statistics, six of the top ten fishing 
nations, and 11 of the top 15, are developing count ries, and developing countries collectively account 
for about 70 per cent of global capture production.   For many Members, given these facts S&DT 
cannot simply be a blanket carve-out from the disci plines for all developing Members, as in their view 
this would render the overall discipline ineffectiv e.  A number of developing Members, while 
stressing that they do not seek a simple blanket carve-out, nevertheless consider the absolute figures to be misleading in that they mask the compara tive efficiency and magnitude of countries' fishing 
activities, and thus their relative impacts on global fish eries resources.  They argue instead that the use 
of catch per capita, or catch per fisher, as altern ative measures, show that developing countries make 
less impact on global resources than do developed countries.   
48. Some of the differences in the approaches advanced  by different Members appear to relate to 
the different rationales advanced for S&DT in the par ticular context of fisheries subsidies disciplines.  
In this regard, objectives of S&DT that have been referred to in the discussions and proposals include: 
(1) poverty alleviation, i.e., assistance for vulnerabl e, disadvantaged populations; (2) development of 
the fisheries sector as a source of jobs, income a nd trade, both to lift people out of poverty and to 
create new opportunities for economic development and linkages; (3) building up domestic capacity TN/RL/W/254 
Page 56  
 
  to exploit the fisheries resources within the nationa l jurisdiction; (4) enhan ced policy flexibility for 
Members with a small share of global fish catch, on th e grounds that they have at most a negligible 
impact on global overcapacity and overfishing; (5 ) extending domestic fishing activities beyond 
coastal areas, both into the EEZ and (in some cases) into the high seas, to relieve pressure on coastal 
fisheries resources, including spawning and juvenile populations; (6) "catching up" to the developed 
world in terms of vessels, technology, scale, a nd areas of operation; and (7) exercising rights under 
international law to exploit commercially valuable fi sh stocks in internationa l waters, the products of 
which are traded internationally.  All proposals a nd discussions emphasize the need for the subsidies 
to be deployed and the subsidized activities to be  conducted in a sustainable manner, although like the 
different approaches to the S&DT exceptions, the proposed approaches to the accompanying 
sustainability conditionalities vary greatly. 
2. Treatment of LDCs 
49. There is general agreement that least-devel oped country ("LDC") Members should have the 
greatest degree of flexibility under new discip lines, given their needs and their economic 
vulnerability.  Under the 2007 Chair text, this view is reflected in a complete carve-out from all of the 
prohibitions as well as from the fisheries manage ment provisions.  Subsequent discussions and 
proposals have revealed, however, that many de legations are concerned over the potential for 
circumvention if a non-LDC Member worked thr ough an LDC Member to take advantage of the 
latter's exemption from disciplines.  Other concerns raised by some delegations are that any agreed 
disciplines related to IUU fishing should apply to  all Members, and that all Members should be 
subject to rules relating to overfished fisheries and to  adverse effects.  Thus, while there seems to be 
substantial comfort with LDC Members having th e most flexibility under the new disciplines, and 
while some LDC delegations have explicitly indicated  willingness to be subject to at least some of 
these additional provisions, this issue requires further clarification.   
3. Whether S&D treatment provisions should be further subdivided beyond the separate 
treatment of LDCs   
50. One important issue regarding S&D treatment is  whether for developing Members other than 
LDCs the special and differential tr eatment should be uniform (one-si ze-fits-all), or instead should be 
differentiated on some basis.  Most proposals suggest some sort of differentiation, on the basis of two 
main possible approaches, which could stand al one or be combined.  These are differentiated 
treatment of subcategories of developing Member s themselves (i.e., an approach analogous to that 
under Article 27 of the SCM Agreement), and/or differentiated treatment of different types of 
fisheries activities of developing Members.   
51. The proponents of proposals that would establish an essentially uniform S&DT for all non-
LDC developing Members have expressed a certain pr eference for some differentiation, in the first 
instance in respect of certain small-scale activities from othe r activities, but they would address 
subsidization of such activities via general exceptions and/or de minimis  provisions.  Some have 
indicated they would consider providing higher de minimis  caps for the smallest developing Members 
as measured by share of global capture.   
52. The 2007 Chair text proposes a differentiated S&DT for different types of fisheries activities.  
In particular, subsidies to the smallest-scale, le ast commercial, near-shore activities would be subject 
to the fewest restrictions and conditionalities, with  increasing levels of discipline as the scale, degree 
of commercialization, and area of operation of the subsidized activity expanded, and no subsidization 
would be permitted for any fisheries activities on th e high seas.  The categories of fisheries activities 
and the associated limitations as proposed in the 2007 Chair text have  proven controversial, however, 
and a variety of alternative proposals re-scoping a nd redefining the categories have been submitted.  
No one proposal has generated significant convergence, however.    TN/RL/W/254 
 Page 57 
 
 
  53. In addition, some proposals would provide extra flexibilities for fisheries activities of 
Members that have only a small percentage share (v ariously defined) of the global marine wild fish 
harvest, either via particular exceptions or, as noted above, via a higher de minimis  level under a 
general exception for such a subset of developing Members.  These proposals as well have proven to 
be controversial, principally due to concerns  about creating new subcategories of developing 
Members.  Thus, there is only limited convergence as to the basic structure of the S&DT provisions, 
and even less regarding their content.   
4. Expanded flexibilities for developing Members with a small share of global wild fish 
capture 
54. Delegations favouring expanded flexibilities for developing Members with not more than a 
defined, small, share of global wild fish capture argue that the impact on global fisheries resources of 
developing countries with a small fishing presence is not comparable to that of larger fishing countries.  For some, if all developing Members ne ed to be subject to the same S&DT provisions, 
those provisions will have to be stricter than if a differentiation based on the level of fishing activity is 
possible.   
55. One of the proposals for such differentiated fl exibilities uses a two-part criterion, combining 
the share of global fish capture and the share of  NAMA trade during a reference period.  Another 
proposes as its unitary criterion a (smaller) share of global fish capture during a reference period.  
Under both of these proposals, developing Members falling below the proposed thresholds would be 
allowed to subsidize vessel capital costs and operating costs, including but not limited to fuel, for all 
of their fisheries activities, regardless of scale or area of operation, subject to fisheries management 
conditionalities.  The proponents' main argument in favour of these expanded flexibilities is that any 
country with such a small share of total fishing act ivity cannot have contributed in the past to the 
global problems of overcapacity and overfishing, and will not be able to do so in the future.  They 
further argue that they do not want to remain small forever, and need to be able to subsidize to help 
their fisheries sectors to become larger-scale and more commercial.  A third proposal would allow 
subsidization of capital and operating costs, and pr ice supports by developing Members with a small 
share of global catch, but limited to operations within the Member's EEZ.  Finally, as noted, some 
proposals for a de minimis  general exception would set a higher de minimis  cap for developing 
Members with a small share of global capture.   
56. As indicated, a number of delegations are concerned over these proposals due to systemic 
concerns over sub-categorization of developing Members in the context of WTO rules.  They consider 
that the only acceptable subdivision of developing Members is between LDCs  and all others.  A 
further objection is that figures on absolute shares of global fish capture are misleading and that per 
capita or per fisher figures are more appropriate i ndicators of which countries are "large" and "small" 
fishers.  Other suggested criteria (level of developmen t, fleet size or tonnage, etc.) also have failed to 
attract convergence. 
57. A number of other questions and concerns have been raised concerning these proposals.  One 
has to do with the thresholds proposed.  Some delegations consider these thresholds to be both 
arbitrary and too high.  On the latter point, they no te that if all of the developing Members that are 
currently below the threshold were to increase their shares of global capture up to the threshold, the 
Members involved would cumulatively account for a very large share of total global capture 
(approximately 25 per cent under one of the propo sals).  Another question is whether the list of 
eligible Members would be permanently fixed or instead would vary as Members' shares of global 
fish capture rose or fell.  For some, a permanently fixed list would be unfair to those not on the list who met the criteria after the fact.  For others, if  the subsidization succeed ed in establishing a large-
scale, commercial fisheries sector, the initial ra tionale for the subsidization – small size and 
participation – would no longer exist.   TN/RL/W/254 
Page 58  
 
  5. Issues to be addressed if S&DT were to be based on subcategories of fishing activities 
(a) "Bottom" tier of activities (e.g. "subsistence", "artisanal", "small-scale") 
58. While there is substantial support for the princi ple of a "sliding-scale" approach to S&DT as 
proposed in the 2007 Chair text, as noted there is  no convergence on how many categories of fisheries 
activities there would be nor on how they would be defi ned.  One important question in this regard is 
what the "bottom" tier would cover and what flex ibilities would apply to it.  The 2007 Chair text 
proposes three categories, the first of which essentia lly corresponds to a subsistence-type activity, 
with parameters describing inshore activities using simple gear, principally for own consumption and 
with no major employer-employee relationships invo lved.  Under that text, governments would be 
able to provide all forms of subsidies listed in the prohibition provision, essentially without conditions 
(fisheries management provisions would be indica tive, not mandatory, and could draw on indigenous 
institutions and measures).   
59. Members in favour of a subsistence-based defi nition for the bottom tier of activities consider 
that these activities are less likely than larger- scale and more commercial activities to negatively 
affect fisheries resources.  In any case, in rec ognition of the extreme vulnerability of populations 
engaged in this sort of activity, they generally  consider that governments should have maximum 
flexibility to provide all necessary support to such ac tivities.  That said, these Members caution that 
because of the great degree of flexibility that they would envision for this category, the category itself 
must remain very narrowly defined.   
60. Many developing Members, however, consid er that this category is too narrowly 
circumscribed, and/or relies on para meters that are inappropriate.  In their view, concepts such as 
"small-scale" or "artisanal" fisheries are more relevant and closer to their reality than pure 
subsistence.  Some take the view that creating a cat egory of subsistence-type activities, to which extra 
flexibilities for subsidies would apply, would "in centivize backwardness", and that poor populations 
should not lose access to certain subsidies just becau se they move slightly beyond a subsistence level 
of activity.  The approach of most of these proposal s thus is to expand this bottom tier to encompass 
activities beyond the subsistence level, extending it to "artisanal" or "small-scale commercial" 
fisheries.   
61. Reflecting Members' significant differences of view as to its nature, a number of alternative 
proposals have been tabled relating to the "botto m tier" activities, cumulatively encompassing a wide 
range of suggested parameters a nd criteria, including:  socio-econom ic criteria (low income, resource 
poor, livelihood fishing activities, classified within th e lowest category of economic activity); mode of 
organization (individual or family basis, micro- enterprises, associations, individual boat owners, 
cooperatives, small producer organizations); purpose of the subsidies (food security, development of 
local communities, poverty reduction); physical char acteristics of the vessels involved (not more than 
15 meters in length, not equipped with on-board fre ezing or refrigeration); gear type and techniques 
(simple gear, tools and techniques, predominantly manual labour, no destructive fishing practices); 
area of operation (territorial waters , waters under national jurisdiction); use of catch (mainly for direct 
human consumption, not beyond a small profit trade).   
62. The proposals and the discussions thereon have revealed that very significant differences 
remain as to the nature and operation of a "botto m tier" of activities if special and differential 
treatment were structured on the basis of different  categories of fishing activities.  Some proposals 
point to economic vulnerability as the main or only criterion, and explicitly reject as arbitrary and 
unfair any "static" criteria related to physical char acteristics of vessels, area of operation, use of the 
catch, etc.; and refer instead to socio-economic cr iteria.  Other proposals, however, envisage a range 
of criteria that their proponents consider necessary to prevent the creation of a large loophole via this 
provision, in some cases combining static and socio-economic parameters , along with additional  TN/RL/W/254 
 Page 59 
 
 
  factors such as the purpose of the subsidy.  Some  proposals in respect of the bottom category would 
limit the activities to territorial waters, and some would limit them to the Member's EEZ.  Others 
would allow subsidization for activities in nei ghbouring countries' EEZs under reciprocal access 
arrangements, and still others cont ain no explicit geographical limits or references.  Most proponents 
for the time being appear to strongly prefer thei r own descriptions of and proposals concerning the 
bottom tier category of activity. 
63. Moving beyond the descriptors, there also are very  different views as to the extent of the 
exemption for subsidies to the activities covered by the bottom tier category.  As noted, many 
Members argue that the broader the coverage of this category, the more circumscribed the exemption will need to be, both in terms of which otherwise- prohibited subsidies should be available and what 
the conditions for accessing these should be.  These Members are sceptical of proposals that would, 
subject only to best-efforts fisheries management, permit provision of the entire range of otherwise-
prohibited subsidies to activities and actors descri bed exclusively by socio-economic or similar 
criteria, with no explicit limitations in respect of physical parameters (vessels, areas of operation, 
gear, techniques, etc.), or other more directly-observable criteria such as use of the catch and degree 
of employer-employee relationship.  In their view, such a definition is too loose and would create a 
category that was much too broad to warrant the expansive exemption contemplated.   
64. Reflecting this point of view, some proposals would allow only certain subsidies for bottom 
tier activities, and would establish limits as to the circumstances under which these could be given and 
the conditionalities that would have to be met.  Exam ples include limiting subsidies to this category to 
vessel construction and operating costs, and (certa in) infrastructure subsidies, and possibly income 
supports, with the category defined using a range of limitations, and in one case making fisheries 
management mandatory.  In the view of these prop onents, the subsidies envisaged are those most 
likely in practice to be needed by the most vulne rable fishing populations of developing Members.  
Members seeking a broader exemption for the bottom tier of activities, however, consider these proposals to be too restrictive, as to the subsidies that would be allowed and the conditions that would 
need to be met.   
65. An additional issue, which potentially cuts acr oss the entire S&DT debate, has to do with 
whether any subsidization of fishing activities on the high seas should be permitted and if so under 
what circumstances.  Because of its horizontal na ture, this question is addressed separately below. 
66. Finally, further complicating the discussion of wh at should be covered in the "bottom tier" of 
an S&DT provision based on categories of fishing activities, as noted some Members (almost all of 
them developed) consider that subsidization of certain "small-scale" fisheries activities is not an 
exclusive concern of developing Members, and in stead should be permitted for all Members, via a 
general exception, rather than being treated exclusiv ely as an S&DT issue.  In this context, proposals 
for such a general exception have advanced various descriptors and parameters for the activities that 
would be covered.  (As also noted, some proposals would address this issue via a generally available 
de minimis exception, with a higher threshold for developing Members.)   
67. The parameters used in the proposals for a general exception for certain "small-scale" 
activities in some cases vary considerably from tho se advanced in the various proposals on this issue 
in the S&DT context (including, for example, gross tonnage of the vessel, limits on refrigeration, flag 
of registry, domestic landing of catch without ca lling at a foreign port or  transhipping at sea, 
maintenance of livelihood, impoverished fishwo rkers, EEZ of adjacent Member providing access, 
coverage of household living expe nses by fishing activities, cap on total catch of the Member 
accounted for by such activities).  Furthermore, as noted, some delegations remain sceptical as to the 
definitions advanced for, and the need to subsidi ze, "small-scale" fisheries of developed Members.  
Efforts to try to identify and build on commonalities,  with a view to finding solutions for legitimate TN/RL/W/254 
Page 60  
 
  situations faced by vulnerable fishing populations  of developed Members in addition to those of 
developing Members, have faile d to generate convergence.   
(b) S&DT for activities beyond the bottom tier 
(i) How many additional tiers and how to define 
68. In the event that S&DT were to be based on a multi-tiered, sliding scale approach, another 
important question that has been debated but thus far not resolved is how many additional tiers 
beyond the bottom tier there would be, and how th ese would be defined.  While most proposals 
envisage just one additional category, some delegati ons prefer more subcategories, which in their 
view would permit better targeting of subsidies to where they were needed, and better monitoring and 
control of their impact. 
69. The 2007 Chair text, for non-LDC Members' activiti es beyond the first (subsistence) tier, first 
established a horizontal exception, for all such activities, from the prohibitions on infrastructure 
subsidies, income support and price support, and th en established two additional categories of fishing 
activities.  These were, first, (non-subsistence) ac tivities using "small" vess els (defined as decked 
vessels up to 10 meters in length, and undecked v essels of any size), which would be exempted from 
the prohibitions on subsidies fo r vessel construction and modification, and on operating cost 
subsidies.  Second, activities using all other types of vessels (i.e., larger decked vessels) would be 
exempted from the prohibition on subsidies for vessel  construction and modification, so long as the 
activities took place within the Member's EEZ.  In a ddition, as a horizontal condition for all of these 
exemptions, the developing Member would need to adhere to the fisheries management provisions.   
70. Subsequent proposals generally have suggest ed a single further category of fisheries 
activities, beyond the bottom tier of activities.  In this  respect, many delegations have taken issue in 
general with the use of static parameters such as vessel characteristics, and many also have indicated 
in particular that the 10-meter limit for decked vessels in the 2007 Chair text does not correspond to 
their smaller-scale commercial fisheries.  Thus, as indicated above, most proposals suggest characteristics for the bottom tier of activities th at would go beyond the subsistence level to 
encompass "artisanal" and/or "small-scale commercia l" activities, and then define the second tier as 
the residual.  As discussed, however, delegations are far from agreement on the characteristics of the 
bottom tier, meaning that discussion of the residu al second (larger-scale) tier has been similarly 
inconclusive.   
71. It has been suggested, in the light of this diffi culty, that it might be easier to find convergence 
regarding what artisanal or small-scale fisheries are not, than on what they are.  Suggested parameters 
include the type of fishing, the targeted species a nd the vessel characteristics.  No specific proposal 
has yet been made in this regard, however, and pres umably some of the same general issues (such as 
doubts about the appropriateness of static paramete rs) would arise in taking such a negative listing 
approach.   
(ii) What exemptions, under what conditions, for the additional tier(s) of activities  
72. The absence of convergence on the definition of th e additional tier or tiers of activities that 
might be established under S&DT provisions in tu rn has inhibited convergence on the nature and 
scope of the exceptions that would be allowed for such additional tier(s).  The main area of 
divergence in this respect is the extent to which subsidization should be lim ited to vessel construction 
and modification, or whether in addition subsidi zation of operating costs s hould be permitted.  Many 
although not all proponents seek exceptions in respect of both of these categories of subsidization for 
larger-scale activities, with fuel  subsidies being identified as the operating cost subsidy of highest 
priority for exceptions.    TN/RL/W/254 
 Page 61 
 
 
  73. Thus, the debate over which exceptions should be  allowed in respect of the tier(s) covering 
larger-scale activities essentially centres on fuel s ubsidies.  As discussed above, the issue of fuel 
subsidies, and how they should be addressed in the c ontext of the prohibition, is very divisive.  This 
divisiveness carries over into the S&DT debate, partic ularly as the scale of the activities in respect of 
which fuel subsidies (and other operating cost s ubsidies) would be perm itted under S&DT provisions 
increases.  In particular, a number of delegati ons have indicated openness to an exception for 
developing Members to subsidize construction a nd modification of vessels including for commercial 
or industrial-scale activities, up to a level of capacity  consistent with the sustainable exploitation of 
their own fisheries resources, on the basis that vessel capital costs can present an insurmountable 
hurdle for operators in developing countries.  Many  of these delegations, however, have concerns over 
an exception to provide fuel subsidi es to such activities.  In their vi ew, the rationales for the two types 
of subsidies are very different, and in particular  they see no convincing deve lopmental rationale for 
providing on-going operating support to industrial-scale fishing activities.  To the contrary, they 
consider that the activity should not be taking place at all if it requires such support in order to be 
profitable.  The concerns of these delegations become more pronounced the broader the proposed 
category is.   
74. Demandeurs, however, argue that subsidies for vessel capital costs, while necessary, are not 
sufficient.  They view operating cost subsidies as  integral to their fishers' ability to exploit the 
resources to which they have a right, noting inter alia  the difficulties brought on by fuel price spikes.  
Some point to their ambitions to grow beyond a small share of global fish catch, which they argue will 
be impossible to realize if they do not have th e ability to subsidize operating costs as they deem 
necessary.   
6. Subsidies to high seas fishing activities 
75. One of the most difficult issues in the S& DT discussions is whether flexibilities for 
developing Members should extend to subsidization of activities on the high seas, i.e., beyond the 
limits of the Member's EEZ.  Closely related to th is is the similarly controversial question of what 
role, if any, should be given to Regional Fisheri es Management Organizations ("RFMOs") in the new 
disciplines if such subsidies were allowed.  The question of RFMOs also is addressed below, more 
generally, in the context of fisheries management.   
76. Demandeurs for flexibilities in respect of high seas fisheries advance a number of arguments.  
One is equity-based, i.e., that developing countries are latecomers to high seas fisheries, and should be 
able to use whatever means they d eem necessary in order to catch up to the developed world.  In this 
respect, the demandeurs note that under international law, all countries have the right to a share of 
fisheries resources in international waters, but that the cost advantages of de veloped Members' fishing 
fleets are too great for them to overcome without subsidies.  They consider that, including through the use of subsidization, developed countries are res ponsible for the overfishing of high seas stocks and 
now are denying developing countries the use of s ubsidies, and thus are attempting to impose a 
standstill on high seas fishing, which would be unfair to  developing countries.  Some also argue that 
allowing subsidies only within a Member's ow n EEZ would put undue pressure on the vulnerable 
resources there (notably spawning stocks and juveniles).   
77. A further argument advanced is that the distinction between the EEZ and the high seas is 
artificial.  One point made in this regard is th at where straddling and highly migratory stocks spend 
only part of their time in a given EEZ and then  move beyond the EEZ boundary, as a practical matter 
the boats fishing those stocks cannot stop their ac tivity when they reach the boundary.  Another point 
made is that straddling and highly migratory stocks that are fished while inside a given Member's EEZ 
are subject to quotas set by RFMOs, and that those quotas cover the stock wherever it is at a given 
moment – inside or outside the EEZ.  Thus, the quota -holder has the right to fish where the stock is 
(including on the high seas), but also is subject to limi ts on fishing within the EEZ.  In the view of the TN/RL/W/254 
Page 62  
 
  demandeurs, for these reasons as well it would be un realistic to stop a boat at the EEZ boundary just 
because it had received a subsidy while within the EE Z.  Significantly, some of the demandeurs have 
identified the ability to subsidize high seas fisheries as critical.   
78. The demandeurs argue that allowing high seas subs idies could be done in a sustainable way, 
subject to the quotas and other rules set by the RFMO charged with managing the stock(s) in question.  
Some demandeurs indicate in this regard that they could accept RFMO-plus conditionalities, to 
address concerns of other Members over the weakness of at least some RFMOs in establishing and enforcing sustainable quotas and other management meas ures in respect of the fish stocks assigned to 
them.  RFMO-plus elements given as possible ex amples in this context include strengthening 
compliance with RFMOs' conservation and management measures as a precondition for S&DT, 
specific conditionality based on types of subsidies or  vessels, application to RFMOs of management 
conditionalities as proposed for Members, disciplines in  respect of vessels that use support vessels and 
thus tend to operate as part of distant water fleets , precautionary provisions, surveillance, collection of 
data, and production of reports , and similar measures.    
79. Many other delegations have gr eat concerns over the prospect of any Member being allowed 
to subsidize high seas fishing.  These delegations consider the high seas resources to be the most 
biologically and politically vulnerable, given th e absence of national jurisdiction, and thus 
accountability, in the high seas, and given the poor performance of many RFMOs in sustainably managing internationally-shared fisheries resources.  In  this regard, they point to the fact that RFMOs 
frequently set quotas at levels above those reco mmended by scientists, in response to political 
pressure, and express doubt that RFMO members will be able to agree to strengthen them.  While 
recognizing the rights of all countries under internati onal law to share in hi gh seas resources, these 
Members are concerned that enormous overcapacity already exists, and that creation of additional 
capacity with subsidies will further distort the ec onomic incentives involved in high seas fishing, to 
the detriment of the sustainability of the stocks, ma ny of which already are fully- or over-exploited.  
They also express concerns over the provision of fu el subsidies to such activities, given the large 
percentage of operating costs accounted for by fuel, especially for fishing far from shore.   
80. More generally, these delegations consider any fishing activity taking place so far off shore 
by definition to be highly industrialized, and argue th at all such activities by all Members, regardless 
of their development status, should face the same s ubsidy rules.  Thus, they do not see a development 
rationale for subsidizing high seas fishing comparable  to that advanced in favour of subsidies for 
developing Members' subsistence or artisanal or small-scale fisheries.  Nor do the delegations 
opposing S&DT exceptions for subsidies to high seas fi sheries accept the argume nt that subsidizing 
such activities is beneficial to fisheries resources by reducing fishing pressure within the EEZ.  In 
their view, the conservation of the fish stocks in  question within in the EEZ, including juveniles and 
spawning stocks, is in any case a responsibility of  national fisheries management, as required under 
international law, including the UN Convention on  the Law of the Sea and the UN Fish Stocks 
Agreement.   
81. By the same token, these delegations questi on how the sustainability conditionalities that 
would apply to S&DT exceptions for subsidies to high seas fishing could be e ffectively enforced in 
practice.  In this respect, they consider the con cept of the EEZ to be both meaningful and relevant, 
given that it demarcates the limits of national juri sdiction and responsibility.  In the view of these 
delegations, the absence of strong jurisdiction a nd enforcement power on the high seas is a principal 
reason for the poor performance of many RFMO s.  While recognizing that RFMOs are, under 
international law, the entities charged with managi ng internationally-shared fisheries, these Members 
are sceptical of relying on them too heavily in subsidy disciplines as the main instrument of or proxy 
for sustainability, unless and until RFMOs were subs tantially strengthened, which they consider 
unlikely in practice.  Significantly, some delegati ons consider a universally-applicable prohibition on 
subsidies to high seas fisheries to be critical.     TN/RL/W/254 
 Page 63 
 
 
  7. Technical assistance 
82. Technical assistance for developing Members to implement new obligations has been widely 
recognized as an important element that would n eed to be addressed in the fisheries subsidies 
disciplines.  There are considerably different visions as to what would be involved, and how it would be structured and implemented, however.  Th e 2007 Chair text proposes that Members give due 
regard to the needs of developing Members in  complying with the disciplines, including the 
conditionalities on S&DT and fisheries management in  general, and provides for the establishment of 
mechanisms for, and the facilitation of, th e provision of technical assistance.   
83. Proposals to expand and enhance the technical assistance provisions have been submitted.  
Some proposals would make the provision of such assistance essentially mandatory upon the request 
of a developing Member, and certain new instituti onal structures have been proposed, including the 
establishment of a dedicated sub-committee of th e SCM Committee to coordinate and monitor the 
implementation of the technical assistance provision s.  Questions and concerns over these proposals 
include whether it is appropriate or practicable to  create mandatory or near-mandatory technical 
assistance obligations; whether developing Members'  compliance with their obligations should be 
conditional upon their receipt of technical assistance (as some perceive the proposals to suggest); and 
how to ensure that technical assistance for the implementation of fisheries obligations does not 
indirectly facilitate the provision of additional subsidies, by freeing up government funds that 
otherwise could and should be spent on fisheries mana gement.  Some delegations also have linked the 
degree of their flexibility on technical assistance provisions in the disciplines to the level of 
obligations that developing Members are willing to a ccept.  In their view, if the obligations are light 
there is little to implement and thus little or no need for technical assistance to do so.   
C. 
GENERAL DISCIPLINES (ADVERSE EFFECTS ) 
84. As a complement to the prohibition, the 2007 Chair text proposes provisions on general 
disciplines.  These provisions would provide for a remedy where any Member caused, through the use 
of any specific subsidy (in the sense of Articles 1. 1 and 1.2 of the SCM Agreement), i.e., including 
non-prohibited subsidies, certain adverse effects in respect of fish stocks in which another Member 
had an identifiable fishing interest.  It also woul d attribute subsidies to the Member conferring them, 
regardless of the flag of the vessel involved or application of rules of origin to the fisheries products.  While there is considerable suppor t among delegations for the principle of such general disciplines, 
there also are considerable differences of view as to  the specific details of what should be covered and 
what the rules should be.   
85. Many delegations consider that such general disci plines or adverse effects provisions must be 
a complement to and not a replacement for the s ubsidy prohibition, and are concerned over the heavy 
emphasis in some proposals on general discipline provisions compared to prohibitions.  Others, however, consider that the prohibitions shoul d be limited and that fisheries management 
complemented by adverse effects provisions should be the core discipline.   
86. On the subsidies that would be covered, pr oposals on general disciplines would cover all 
specific subsidies in the sense of  the SCM Agreement, and many de legations support this.  Some are 
concerned, however, that imprecise drafting as to the covered subsidies c ould vitiate the general 
exceptions and special and differential treatment provi sions, or could give rise to trade barriers.   
87. As for covered effects, many delegations consider  that only adverse effects in relation to fish 
stocks and/or fishing interests should be addressed in  the fisheries subsidies disciplines, and that trade 
effects should be dealt with exclusively under th e existing provisions in the main body of the SCM 
Agreement.  Concerning the nature of adverse effect s, issues identified relate to both overcapacity and TN/RL/W/254 
Page 64  
 
  overfishing in respect of particular stocks, but view s differ as to the precise concepts and terminology 
to be used.   
88. Regarding the fish stocks in question, and Member s' interest in them, some consider that the 
general disciplines would have most relevance to straddling or highly migratory stocks which spend 
part of their time in a given Member's waters and part of their time elsewhere, including in the high 
seas.  In terms of demonstrating standing, in the sense of  having an interest in a given fish stock, some 
delegations consider that such interests should be lim ited to fishing interests in the stock in question, 
while others consider that cognizable interests al so should encompass trade and commercial interests, 
such as a commercial interest in fi sh from the same stock or in a directly competitive product.   
89. On establishing the existence of adverse effects a nd their causal link with subsidization, views 
diverge.  Some proposals contain deeming provisi ons, mainly based on the absence of management, 
but reject the idea that the existence of strong mana gement, on its own, would be sufficient to rebut an 
adverse effects claim.  Others consider that mana gement is the central consideration, however, and 
some caution that other factors, including environmen tal and natural influences, might cause harm to 
wild fish stocks that should not be attributed to s ubsidization.  Still others are concerned that deeming 
provisions could put developing Members at a disadvant age.  In addition, the need to avoid general 
disciplines inadvertently causing a race to subsidize by attributing adverse effects to the last to 
subsidize has been raised.  As fo r remedies, some take the view th at these should be the remedies set 
forth in Article 7 of the SCM Agreement, while ot hers would leave the question of remedy to the 
dispute settlement panels to decide.   
90. Finally, delegations generally support the proposal, in the 2007 Chair text and other 
proposals, that subsidies be attributed to the subs idizing Member, regardless of the flag of the vessel 
or the application of rules of origin to the fish pr oducts.  Some consider that this provision should be 
placed so as to make clear that it applies to the fi sheries subsidies disciplin es in their entirety.   
D. 
FISHERIES MANAGEMENT  
1. Role in the disciplines 
91. From the outset of the negotiations, the i ssue of fisheries management has figured 
prominently in the debates.  Some delegations argue that if proper management is in place, subsidies 
cannot cause either overcapacity or over-fishing.  Others, however, consider that while fisheries 
management is important, it cannot  on its own combat the pressure for overcapacity and overfishing 
brought to bear by subsidization.  In their view, th e global crisis in fish stocks is ample evidence that 
fisheries management by itself is inadequate to c ontrol overcapacity and overfishing.  In this regard, 
the example of the North Atlantic cod industry has been cited.  
92. These differences of view in turn are reflected in  very different proposals as to the role that 
fisheries management should play in the disciplines.   Delegations holding the former view consider 
that fisheries management should form the core of  the new rules, and that the subsidy disciplines 
should play the auxiliary role of creating incen tives for Members to adopt strong management 
systems.  Their proposals thus are to shorten the list of subsidies to be prohibited, and to make these 
prohibitions subject to certain management-related conditions (such as subsidiz ing the replacement of 
retired vessels with vessels of smaller capacity), and/or to put greater emphasis on adverse effects provisions, in which the existence and operation of the fisheries management system would play a 
pivotal role in determining whether subsidiza tion had caused overcapacity and overfishing in a 
particular situation.   
93. Other delegations, however, maintain that the co re of the disciplines must be a prohibition of 
certain subsidies, and that fisheries manageme nt should be a conditionality for making use of  TN/RL/W/254 
 Page 65 
 
 
  exceptions from the prohibition (whether genera l exceptions or exceptions under special and 
differential treatment).  They further consider that  while having fisheries management in place can be 
a relevant factor in assessing whether non-prohibited subsidies have caused adverse effects to fish 
stocks, this by itself should not be sufficien t for a successful rebuttal of a claim.   
2. Nature, prescriptiveness, possi ble bases for differentiation  
94. Regarding fisheries management, a consider able degree of convergence has emerged in 
respect of what should be the core, mandatory elemen ts of fisheries management that should apply to 
all Members, and that these core elements should be guided or insp ired by relevant international 
fisheries management instruments.1  Delegations also generally agree that Members should have 
considerable flexibility to implement the core elements  in a way that is adapted to different kinds of 
fisheries.  In this respect, it is recognized that di fferent kinds of management tools will be best suited 
to implementing core elements in di fferent kinds of fisheries.  For example, while all fisheries should 
be subject to stock assessments, the tools to perfo rm such assessments may be different for single-
species and multi-species fisheries.   
95. Notwithstanding this convergence, divergent vi ews remain as to the degree to which the 
requirements to be set forth in the new disciplines should be differentiated for different categories of 
Member and/or in respect of different kinds of fi sheries.  For example, some S&DT proposals would 
require that fisheries management systems be in formed by international fisheries management 
instruments only if the Member in question had ra tified those instruments.  Some others propose 
fisheries management on a "best-efforts" basis, at least for small-scale or artisanal fisheries of 
developing Members.  Other proposals would apply the core management elements uniformly, to all 
Members and all fisheries.  Finally, one proposal c ontains a list of core mandatory elements that 
would apply to all fisheries of all Members, except that certain developing Members with a small share of global fish capture would be subject to a shortened list, while de veloped Members and other 
"major fishing powers" would be subject to additional mandatory management elements.   
3. Role of RFMOs 
96. Finally, the question of what if any role RFMOs should have in management conditionalities 
remains unresolved.  As discussed in the context of high seas fisheries, views are divided as to how heavily RFMOs can be relied upon as instruments of  or proxies for fisheries management, and in 
particular the extent to which having a quota allo cation from an RFMO, and fishing within that quota, 
are sufficient indicators of sound fisheries management  and sustainable fishing.  In this respect, as 
already noted, a number of delegations point to instances where the scientific advisers to RFMOs are 
ignored by the member governments, who set the quotas not based on the science but at a higher level 
in response to political pressure.  Others however consider that for many stocks, management is 
delegated to RFMOs, that they are the main t ool for ensuring international cooperation on those 
stocks, and that they generally perform valuable f unctions in terms of monitoring, data collection, 
scientific research, etc.  Some c onsider that in spite of their lim itations, it would be better under the 
disciplines at least to have a basis to know what RFMOs are doing and to encourage them to improve 
their performance than to exclude them completely.   
E. 
NOTIFICATION AND SURVEILLANCE  
97. Delegations generally agree that the new disci plines should contain enhanced notification and 
surveillance provisions in relation to fisheri es subsidies, beyond those in the existing SCM 
                                                      
1 A legal and institutional framework for fisheries management; stock assessment; vessel and vessel 
composition control; effort control measures or "capacity management"; monitoring, control and surveillance 
measures; and enfo rcement measures.  TN/RL/W/254 
Page 66  
 
  Agreement.  A number of questions remain, however, where views are divided.  These include the 
nature of the information and the level of detail to  be notified, the timing of notifications, the forum 
for and timing of reviews of notifications, and wh ether non-notified subsidies should be presumed to 
be prohibited.  A further issue is whether the no tification requirements should be the same for all 
Members or instead should be reduced for developing Members.   
1. Content, level of detail, and timing of notifications 
98. Subsidy notifications under the new disciplines would be made where exceptions were 
invoked.  In this regard, delega tions generally agree that the information to be notified should 
correspond with, and be sufficient for Members to  evaluate compliance with, the conditions and 
criteria that have to be met for the exception in quest ion.  Differences arise, however, in respect of the 
notification of information related to fisheries activ ities as such.  Under the 2007 Chair text and in 
some proposals, a stock assessment would be requi red prior to the granting of certain subsidies 
pursuant to an exception, and the results of the st ock assessment would need to be notified.  Under 
some proposals, the pre- and expected post-subsidi zation level of capacity also would need to be 
notified, in advance, as a means to prevent subsidies from contributing to overcapacity.   
99. Both the issue of notification of fisheries-rela ted information in the context of WTO rules, 
and the question of advance notification of some or a ll of this information, are controversial.  Some 
Members consider it inappropriate and outside th e WTO's mandate to gather and review such 
information, and they are concerned lest the WTO become, de facto , a fisheries organization.  Others, 
however, consider that such information is a necessary element of monitoring implementation of the rules.   
100. In addition, some Members are concerned ove r the prospect of advance notification of 
subsidy-related informati on.  Reasons range from Cabinet privilege  to uncertainty, delays and burden, 
especially on developing Members.  Others consider  that advance notification is indispensable, given 
the long-term effects subsidies can have on fisheries resources, particularly when they are used to 
increase capacity and effort.   
2. Nature of and forum for review 
101. The question of how, where and by whom notif ications should be reviewed has been the 
subject of considerable debate , and positions remain divided.  Under the 2007 Chair text, the 
envisaged notifications of fisheries-related info rmation (stock assessments, laws and regulations, 
information as to the implementation of fisheries ma nagement systems) would be made to a relevant 
body of the Food and Agriculture Organization, wher e it would be subject to "peer review".  The 
references to such notifications and reviews woul d then be included in the subsidy notifications 
submitted to the WTO.  While the Chair text  does not define the term "peer review", 
Ambassador Valles explained to Members that  what he had had in mind was a multilateral 
transparency review (comparable to that in a WTO Committee or under the Trade Policy Review 
Mechanism).  He indicated that he had not conceived of it either as a review by a small "peer review" 
body, or as a process that would render a judgement on the notifier's compliance with the rules.  As 
for the subsidy-related information, the 2007 Chai r text proposes that that information would be 
notified to and reviewed by the WTO Committee on Subsidies and Countervailing Measures.   
102. Most delegations have expressed concerns over th e prospect of the FAO or any other outside 
organization receiving notifications or conducting s ubstantive reviews pursuant to WTO rules.  In 
their view, the WTO needs to monitor and enforce all aspects of its own rules.  A number of proposals 
and suggestions have been made for modifying the notification provisions of the 2007 Chair text 
along these lines, including the creation of a fish eries sub-committee of the SCM Committee.  While 
the delegations taking this view r ecognize that at present the WTO h as no in-house fisheries expertise,  TN/RL/W/254 
 Page 67 
 
 
  they believe that this could be addressed by hiri ng staff with a fisheries background and/or by drawing 
on resources of other, expert, organizations, princi pally the FAO, but also possibly some RFMOs and 
other fisheries organizations, as needed.  Some dele gations, however, prefer the approach in the Chair 
text, which they see as the most efficient and technically sound way to address the complex fisheries-related information that would be ge nerated under the new disciplines.   
103. Concerning the nature of the reviews that would be undertaken (in whatever forum), most 
delegations consider that these should be for the purposes of transparency only, and should not be 
aimed at rendering judgements as to the soundness of a fisheries management system, the accuracy of 
a stock assessment, the compliance of a given subsidy with the pertinent criteria, or similar questions.  Others however, favour a more binding outcome.  On e proposal in this regard is for a report that 
would render a legal judgement, which coul d be used in dispute settlement.   
3. Whether non-notified subsidies should be presumed prohibited 
104. A further proposal, contained in the 2007 Chair text and supported by a number of 
delegations, is that there should be a presumption th at a non-notified subsidy that is the subject of 
dispute settlement is prohibited, w ith the burden on the subsidizer to demonstrate that the subsidy is 
not prohibited.  Other delegations are concerne d over such a presumption, including because they 
disagree that the legal status of a measure should be  determined by a procedural failure, and because 
they do not consider burden shifting to be a useful incentive to comply with notification requirements.  
Some developing Members also have concerns that failure to notify might be the result of resource 
constraints rather than deliberate action and that this should be taken into account.   
F. 
OTHER ISSUES  
105. Other issues addressed in the 2007 Chair text and in some proposals include provisions on 
dispute settlement and transition rules.  Regarding dispute settlement , many delegations consider that 
the corresponding provisions in the 2007 Chair text are largely or entirely redundant, and should be at least partially deleted.  One issue that remain s to be resolved, however, is the above-described 
presumption that non-notified subsidies should be prohibited.  Another issue about which views 
remain divided is whether dispute settlement panels  should be required or me rely have the option to 
resort to outside fisheries experts where scientific or technical questions related to fisheries are raised.   
106. Regarding transition rules , while most delegations consider that disciplines would need to 
allow transition periods for Members to bring thei r existing inconsistent measures into conformity 
once the disciplines entered into for ce, the prevailing view is that this issue can meaningfully be 
discussed only once the substantive disci plines have been clarified.  It has been noted, in particular, 
that the need for and length of a transition period w ould directly depend on the scope and strictness of 
the discipline to be applied.   
 
__________