./. RESTRICTED  WORLD TRADE  
ORGANIZATION  TN/RL/M/31 
1 September 2005 
 (05-3821) 
Negotiating Group on Rules  
  
 
SUMMARY REPORT OF THE MEETING 
HELD ON 11 JULY 2005 
 
Note by the Secretariat
 
 
 
1. The Negotiating Group on Rules ("the Group") held a formal meeting on 11 July 2005. 
A. ADOPTION OF THE AGENDA  
2. The Group adopted the following agenda: 
A. ADOPTION OF THE AGENDA ...................................................................................................... 1  
B. ANTI -DUMPING ("AD")............................................................................................................. 1  
C. OTHER BUSINESS ...................................................................................................................... 2  
 - Statement regarding Cairo Declara tion and Road Map on the Doha Work 
  Programme   - Date of the Group's next meetng 
 
B. 
ANTI -DUMPING ("AD") 
3. The Group discussed a paper entitled "Currency Conversions"  (TN/RL/W/183).  The paper 
sought to highlight the importance of the issue of currency conversions for investigating authorities, 
exporters, importers and the business community as a w hole.  The paper identified two elements.  The 
first was to formulate a definition for the term "fluctuations" and precisely set forth when currency 
conversion fluctuations were to be ignored pursuant to Article 2.4.1 of the AD Agreement.  The 
second was to define the term "sustained movement " and set forth how these movements in exchange 
rates would be shown, and the time periods during which such movements should be reflected.  The 
sponsor of the paper requested othe r Participants to share with the Group their experience with respect 
to currency conversions.  
4. Some Participants agreed that Article 2.4. 1 provides no guidance on how Participants should 
define currency fluctuations and su stained movements, or what to do if and when they were found, 
which in turn made it difficult for investigating auth orities, and particularly new users, to take into 
account unusual currency movements that could either  mask or create dumping margins.  It was  
submitted that the lack of guidance can also lead to  arbitrary application of different methodologies in 
different cases in order to obtain particular outcom es.  Thus, the two concepts of fluctuation and 
sustained movements should entail quantifiable parame ters to ensure consistency on how these terms 
should be interpreted.  This Ar ticle could be improved and clar ified by establishing guidelines 
explaining when fluctuations and exchange rates sh ould be ignored, what would constitute sustained 
movements in exchange rates, and how investig ating authorities should apply the 60 day-rule for 
allowing exporters to adjust export prices.  It wa s regarded as reasonable to require investigating 
authorities to use exchange rates from sources of recognized authority which sources should be TN/RL/M/31 
Page 2  
 
 disclosed to interested parties.  As regards the sponsor's suggestion that Participants share their 
experiences, a number of Participants expressed their readiness to do so and drew other Participants' 
attention to the discussions that took place in th e Ad-Hoc Group on Implementation and the papers 
submitted to the said Group in this regard. 
5. Some Participants, though ac knowledging the usefulness of reviewing the methods by which 
other Participants have implemente d these provisions, believed that it would be more useful to review 
the intent of these particular provisions as there might be other ways to address the problems these 
provisions were meant to resolve.  It was suggest ed that more clarification was required regarding 
setting the date of sale for purposes of establishing th e appropriate exchange rate.  One Participant 
proposed to add a text to Article 2.4.1. of the AD Agreement to reflect which sources of currency 
exchange rates should be a recognized authority a nd that the AD Agreement should be clarified to 
require increased transparency as to the source of exchange rates Participants apply, while any 
exception from the preferred recognized source should be adequately explained.  Another Participant 
mentioned that in its practice, the problem of exch ange rates would only occur if there were strong 
changes in exchange rates within  the investigation period where it normally would apply an average 
exchange rate over the investiga tion period.  In most of the cases this would not cause difficulties, 
except that if within this period there were  subs tantial changes in the exchange rates, the period 
would be then broken down into sub-periods, norm ally months, and comparis ons would be made on 
the basis of a monthly exchange rate.     
6. It was queried whether average rates would genera lly be better than the fluctuating day to day 
rates, what the sponsor meant by "fluctuations" and "sustained movements", whether the proposal 
meant to focus on real or nominal exchange rates, wh ether it meant to deal with the spot market or the 
future market, and whether any notification obliga tion would somehow preclude Participants that do 
not have a specific methodology from making any kind of  adjustment pertaining to exchange rates.  
The sponsor was urged to provide a text with sp ecific, concrete language on how the provisions 
should be amended.  
7. The sponsor explained that there was no cont radiction among the various elements of its 
proposal, as it focused solely on the notion of defining what could be meant by "fluctuations" and "sustained movements".  It clarified that it di d not intend to submit a mechanism for currency 
conversions for all WTO Participants.  Its proposal  should be viewed as a first step that would 
certainly lead to textual discussions later on.  It expressed its readiness to illust rate its own experience 
in this area.  
C. 
OTHER BUSINESS  
8. One Participant drew the Participants' attenti on to the Third Ordinary Session of the Trade 
Ministers of the Member States of the African Union Meeting held in Cairo on 5-9 June 2005.  In this regard, it referred to paragraph 16 of the Cair o Declaration and Road Map on the Doha Work 
Programme (WT/L/612) which focused on the negotiations on WTO Rules and the key issues for 
achieving progress in these negotiations.  
9. The next meeting of the Group will be held on 26-30 September 2005.  The deadline for any 
formal or informal elaborated proposals for c onsideration at that meeting will be Thursday, 
15 September 2005, close of business. 
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