RESTRICTEDWORLD TRADE
ORGANIZATIONG/ADP/AHG/W/135
18 April 2002
(02-2145)
Committee on Anti-Dumping Practices
Working Group on ImplementationOriginal:  English
IMPLEMENTATION-RELATED ISSUES REFERRED TO THE
COMMITTEE ON ANTI-DUMPING PRACTICES AND ITS
WORKING GROUP ON IMPLEMENTATION
Replies from INDIA to Questions from the EUROPEAN COMMUNITIES,
CANADA and the UNITED STATES
Replies to Questions from the EC  (G/ADP/AHG/W/129 )
According to para. 3 of India's submission, the first sentence of Article 15 imposes an
obligation on the investigating authorities that the special situation of developing countriesshould be an element to be taken into consid eration when making an evaluation as to the
application of anti-dumping measures.
Q4. Is India suggesting that the first sentence of Article 15 ADA imposes a separate
obligation on developed country Members from th e one laid down in the second sentence of this
article?  If so, what would this obligation add in  practical terms to the obligation set out in the
second sentence?
Reply
The first sentence of Article 15 of the Agreement on Implementation of Article VI of the
General Agreement on Tariffs and Trade 1994 (the “Anti-Dumping Agreement”) requires that“special regard” must be given by developed country Members to the situation of developing country
Members when “considering the application of anti-dumping measures”.  On the other hand, the
second sentence of Article 15 only provides for exploration of the possibility of constructive remedies
“before applying anti-dumping duties”.
In India’s view, the distinction between the language of the first and second sentences of
Article 15 is crucial.  In India – Quantitative Restrictions on Imports of Agricultural, Textile and
Industrial Products1, the Appellate Body interpreted the term “application” in the context of balance-
of-payment restrictions imposed under Article XVIII:B of the General Agreement on Tariffs and
Trade 1994 as meaning the “use” or “employment” of such restrictions and refused to interpret theterm as excluding the balance-of-payments justification of such restrictions.  Therefore, the term
“considering the application of anti-dumping measures” must be interpreted as including the
consideration during the investigative process of the pre-conditions for the use or employment of anti-
dumping measures as well.  Any other interpreta tion would mean that the drafters of the Anti-
Dumping Agreement did not take into account the special situation of developing country Members inrelation to the investigative process even though Article 6.13 of the Anti-Dumping Agreement
evidences a special concern for the problems of small companies, including from the developed
country Members.
                                                     
1 Report of the Appellate Body dated 23 August 1999, WT/DS90/AB/R.G/ADP/AHG/W/135
Page 2
In fact, this interpretation is reinforced by the Decision of 5 May 1980 of the  Committee on
Anti-Dumping Practices, which interpreted the obligations of developed country Members under the
first sentence of Article 13 of the 1979 Anti-Dumping Code, the language of which was identical to
Article 15 of the Anti-Dumping Agreement.  The Committee interpreted Article 15 as permitting it tomodify the provisions relating to the determination of the existence of dumping under the 1979 Code.
2
What is important is that the Decision of 5 May 1980 clearly did not proceed on an interpretation ofArticle 13 that limited the applicability of the first sentence to the stage of imposition of anti-dumping
duties contemplated by the second sentence of that provision.
Viewed in this manner, it is clear that the first sentence of Article 15 imposes an obligation on
developed country Members to pay special regard to the special situation of the developing countriesduring the entire anti-dumping investigation beginn ing with the initiation of an investigation and
extending through the imposition of anti-dumping duties and the process of review, if any.  On the
other hand, the second sentence of Article 15 concretizes the nature of the obligation imposed under
the first sentence at the specific stage of imposition of duties.  It imposes a positive obligation on the
developed countries to explore all constructive remedies before actually imposing anti-dumpingduties.
The Decision of 5 May 1980 contains good examples of how the first sentence of Article 15
has been operationalized.  To take just one additional example of how the first sentence of Article 15
can be operationalized during the investigative process, exporters from developing country Membersface considerably more problems in responding to detailed anti-dumping questionnaires than those
from developed country Members.  These problems are attributable to the paucity of physical and
human infrastructure, lack of financial and administrative resources and the less developed nature of
accounting systems in developing countries.  Rather than resorting to “facts available” and rejecting
the entire questionnaire response, the first sentence could be operationalized by imposing thefollowing obligations on developed country Members:
1. To attempt to fill in the gaps in the questionnaire responses of developing country
exporters by asking specific questions and to give them additional time to reply; and
2. In all cases where the developing country exporter has attempted to cooperate by
responding to the questionnaire, to resort to facts available under Article 6.8 in amanner that is most favourable to the developing country exporter rather than most
adverse, as suggested by paragraph 7 of Annex II to the Anti-Dumping Agreement.
Q5. Could India please explain in more detail whether and, if so, why it thinks that essential
interests of a developing country are always affected when anti-dumping measures are imposedon imports from that developing country?
Reply
India would like to take the opportunity to modify its position as presented in its original
proposal.  India notes that the effect of anti-dumping duties on a product by a developed country
Member is generally to shut out the developing country Member’s exports to an important export
market.  India concedes that there may be some export-oriented or more advanced developing
countries with a significant share of world trade th at have successfully integrated their economies into
world markets whose “essential” interests may not be affected by being shut out from the developedcountry Member’s market.  In the context of these countries that are at a relatively more advanced
                                                     
2See A NALYTIC INDEX :  GUIDE TO GATT LAW AND PRACTICE (“Analytic Index”), Vol. 2, 1066 (Geneva,
1995).G/ADP/AHG/W/135
Page 3
stage of development, there could well be a distinction between “essential” as opposed to
“inessential” or “non-essential” interests relating to the imposition of anti-dumping duties by a
developed country Member.
In India’s view, however, in the case of the majority of developing countries, their essential
interests are always affected by the imposition of anti-dumping duties on any export product.  The
share of exports in the economies of most developing countries is very low, whether evaluated in
relation to the size of their own economies or their share of world trade.  Increasing the level of
exports, not merely sustaining existing exports, is vital to their economic development strategies.
For the majority of developing countries, exporting to developed markets requires the
attainment of export competitiveness and high quality standards as also effective marketing.  Thereare significant economic externalities to exploring alternative export markets, the cost of which can be
afforded more easily by governments or trade associations in developed country Members because of
their significantly higher resources as compared to developing country Members.  Also, exporting
firms in developed country Members are generally significantly larger than exporting firms from
developing country Members and, therefore, have a greater capacity to bear the costs of exploringnew markets.
Further, products where developing countries have export strength are limited.  Any adverse
impact on one export product significantly affects the overall export effort.  Potential exporters of
other products will hesitate to explore export markets, as they will perceive anti-dumping duties asbeing one of the consequences of export success in developed country export markets.  This factor is
especially important in the case of developing country exporters which find it difficult to provide the
level of cooperation demanded by an investigating authority from a developed country Member
because of their lack of financial and administrative resources and the high costs of hiring legal and
accounting professionals in the developed countries to defend themselves in anti-dumpinginvestigations.
Developed country markets are usually the largest export markets for the developing
countries.  For the reasons discussed above, the loss of a developed country market – which may seem
a relatively minor event in the overall context of the export basket of a developed country Member or
an export-oriented developing country Member – takes on a huge and oppressive dimension in the
context of the developing country Member’s export effort and certainly has an adverse effect on itsessential interests.
It is in this context that India has proposed that there should be a presumption that the
imposition of anti-dumping duties on imports affects the essential interests of developing country
Members.
Q6. Could India please clarify whether the presumption to be established according to its
proposal could be rebutted and, if yes, on what basis?
Reply
As explained in India’s reply to Question 5, in the case of most developing country Members,
essential interests are always affected when anti-dumping measures are imposed on imports from such
Members.  In these circumstances, in India’s view, an irrebuttable presumption would be fully
justified especially since the result would only be to impose an obligation on developed countryMembers an obligation to explain how and why there is no possibility of a constructive remedy.
Q7.  Could India please expand on the term " without there being any requirement of
cumulation " (emphasis added )?G/ADP/AHG/W/135
Page 4
Reply
Article 5.8 of the Anti-Dumping Agreement specifies two thresholds that must not be
exceeded if an investigation is to be terminated on the ground that the volume of dumped import isnegligible:
1. The volume of dumped imports must be less than 3 per cent of imports of the like
product; and
2. Countries that individually account for less than 3 per cent of the imports of the like
products in the importing member should collectively account for less than 7 per centof such imports.
Under Article 5.8, neither of these thresholds may be exceeded if investigations are to be
terminated.  India’s proposal seeks to raise the 3 per cent threshold to 7 per cent in the case of
developing country Members and to make the second inapplicable to them.  Thus, when India statedthat the cumulation requirement should not apply, India was only proposing that once a developing
country Member is shown to have less than a 7 per cent share of total imports in the importing
Member, the investigation should be terminated in respect of that developing country Member
without applying collective thresholds of any kind, whether for imports from all countries that
individually account for less than 3 per cent of total imports or for imports from developing countryMembers that individually account for less than 7 per cent of total imports in the importing Member.
Q8. The rationale behind Article 5.8 seems to be that imports below a certain threshold only
cause 'negligible' injury.  Could India please explain why the volume of imports would have a
different impact on the injury suffered by th e domestic industry depending on whether the
exporter is situated in a developing or a developed country?
Reply
In India’s view, the thresholds specified in Article 5.8 have no scientific basis and are really
an attempt to lay down “bright lines” in th e Anti-Dumping Agreement to prevent arbitrary
interpretations by investigating authorities and, at the same time, to avoid disputes.
In India’ view, the thresholds in Article 5.8 err on the side of caution in favour of the
importing Member that wishes to protect its domestic industry.  Further, the determination of the
existence of dumping is often made on the basis of facts available in accordance with Article 6.8.
Finally, the criteria for determining injury under the Anti-Dumping Agreement are as muchqualitative as quantitative.  Therefore, that injury is not negligible cannot be inferred automatically as
soon as imports cross the thresholds specified in Article 5.8.
The rationale behind India’s proposal for enhancing the negligible volume thresholds in the
case of developing country Members is that special rules should apply to developing countries.Depending on the exact nature of the proposal that is accepted by the Members, this proposal can be
justified either as a matter of special regard for the special situation of developing country Members
under the first sentence of Article 15 of the Anti-Dumping Agreement or as a constructive remedy
under the second sentence of that provision.
Q9. Could this proposal in India's view be  implemented without changing the Agreement?G/ADP/AHG/W/135
Page 5
Reply
In India’s view, it is desirable that the Anti-dumping Agreement should be formally amended
to incorporate the new de minimis thresholds for imports from developing country Members into
Article 5.8.  Alternatively, under Article IX:2 of the Marrakesh Agreement Establishing the WorldTrade Organization, India’s proposal may be implemented through a binding interpretation by the
Ministerial Conference and General Council of the provisions of Article 15.  In the meantime,
following the example of the Decision of 5 May 1980 of the Committee on Anti-Dumping Practices,
developed country Members could implement the new de minimis  thresholds on the basis of an
understanding arrived at in the Committee on Anti-Dumping Practices.
Q10. Could India please explai n whether in her view this proposal can be implemented
without changing the Agreement ?
Reply
Please see the answer to Question 9 above.
Replies to Question from Canada (G/ADP/AHG/W/130)
Q1. In paragraph 5, India mentions the possibility that the criteria of “where they affect the
essential interests of developing country me mbers" might be determined on the basis of
objective standards.  What objective standards would India propose be used to make this
determination and which country would make the determination?
Reply
As explained in India’s reply to Question 5 from the European Union, in the case of most
developing country Members, essential interests are always affected when anti-dumping measures are
imposed on imports from such Members.  In these circumstances, in India’s view, an irrebuttable
presumption would be fully justified especially since the result would only be to impose an obligation
on developed country Members to explain how and why there is no possibility of a constructive
remedy.
Q2. In paragraph 9, India suggests that a duty less than the full margin of dumping be
mandatory with respect to imports from developing country members, and that the "margin of
injury" be calculated in addition to the margin of dumping. How would India propose that the
"injury margin" be calculated?
Reply
The European Union and India, among others, have already started implementing (in respect
of imports from all countries) the suggestion in the second sentence of Article 9.1 of the Anti-Dumping Agreement that:
It is desirable that … the duty be less than the margin [of dumping] if such lesser duty
would be adequate to remove the injury to the domestic industry.
India’s proposal is limited in nature and seeks a commitment that investigating authorities should also
calculate injury margin, in addition to the dumpin g margin and the lesser duty rule should be made
applicable to imports from developing countries. The issue of how injury margin should be calculated
is a larger issue to be addressed during the course of ongoing negotiations.G/ADP/AHG/W/135
Page 6
Replies to Questions from the United States (G/ADP/AHG/W/131)
Q1. With regard to India's statement that "an examination of whether imposition of anti-
dumping duties would affect the essential interests of developing countries needs an enquiry
which is specifically economic in character", what measures and standards of economic impact
would India propose using for this purpose?
Reply
As explained in India’s reply to Question 5 from the European Union, in the case of most
developing country Members, essential interests are always affected when anti-dumping measures are
imposed on imports from such Members.  In these circumstances, in India’s view, an irrebuttable
presumption would be fully justified especially since the result would only be to impose an obligation
on developed country Members to explain how and why there is no possibility of a constructive
remedy.
Q2. With respect to the applicability of Article 15, India states that "cooperation by
exporters from developing countries during the co urse of an anti-dumping investigation results
in financial costs which these concerns are ill positioned to bear".
Would India please elaborate upon this view that the financial position of the exporter
in question has a bearing on whether the essentia l interests of the relevant country are affected?
Reply
India does not contend that the financial position of the exporter facing an anti-dumping
investigation has a direct bearing on whether the essential interests of the relevant country are
affected.
However, the financial position of exporters from the developing countries does have an
indirect bearing on the essential interests of these countries.  As pointed out in India’s reply to
Question 5 from the European Union, any adverse impact on one export product significantly affectsthe overall export effort.  Potential exporters of other products will hesitate to explore export markets,
as they will perceive anti-dumping duties as being a likely consequence of export success in
developed country export markets.  This is an especially important consideration for developing
country exporters because they know that they cannot provide the level of cooperation demanded by
an investigating authority from a developed country Member because of their lack of financial and
administrative resources and because of the high cost of hiring legal and accounting professionals in
the developed countries to defend themselves in anti-dumping investigations.
Q3. India has proposed that a higher de minimis  standard may be an appropriate
"constructive remedy" under Article 15. To what extent does a higher de minimis  standard
constitute an alternative to anti-dumping duties?
Reply
With respect to the issue of whether a higher de minimis  standard can be considered an “an
alternative to anti-dumping duties”, it is not clear why a constructive remedy must always be an
alternative to anti-dumping duties.G/ADP/AHG/W/135
Page 7
In any case, as India pointed out in its reply to Question 8 from the European Union, the
thresholds specified in Article 5.8 have no scientific basis and are really an attempt to lay down
“bright lines” in the Anti-Dumping Agreement to prevent arbitrary interpretations by investigating
authorities and, at the same time, to avoid disputes.
In India’s view, the thresholds in Article 5.8 err on the side of caution in favour of the
importing Member that wishes to protect its domestic industry.  Further, the determination of the
existence of dumping is often made on the basis of facts available in accordance with Article 6.8.
Finally, the criteria for determining injury under the Anti-Dumping Agreement are as much
qualitative as quantitative.  Therefore, that injury is not negligible cannot be inferred automatically as
soon as imports cross the thresholds specified in Article 5.8.
The rationale behind India’s proposal for enhancing the negligible volume thresholds in the
case of developing country Members is that special rules should apply to developing countries.  This
can be justified either as a matter of special regard for the special situation of developing country
Members under the first sentence of Article 15 of the Anti-Dumping Agreement or as a constructive
remedy under the second sentence of that provision.
India would also like to be constructive in its approach to operationalizing Article 15 and is
open to any suggestions from developed country Members.  For example, as in the case of India is
willing to agree that Article 15 would be observed in letter and spirit if the developed country
Members agree that anti-dumping duties will be imposed only when imports from a developingcountry Member exceed the level of 7 per cent of total imports into the importing developed country
Member.
Q4. To what extent would India's proposals require a change to the Anti-Dumping
Agreement?
Reply
In India’s view, it is desirable that the Anti-dumping Agreement should be formally amended
to incorporate the new de minimis thresholds for imports from developing country Members into
Article 5.8.  Alternatively, under Article IX:2 of the Marrakesh Agreement Establishing the World
Trade Organization, India’s proposal could be implemented through a binding interpretation by theMinisterial Conference and General Council of the provisions of Article 15.  In the meantime,
following the example of the Decision of 5 May 1980 of the Committee on Anti-Dumping Practices,
developed country Members could implement the new de minimis  thresholds on the basis of an
understanding arrived at in the Committee on Anti-Dumping Practices.
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