WORLD TRADE
ORGANIZATIONTN/RL/W/98
6 May 2003
(03-2400)
Negotiating Group on Rules Original:  English
IDENTIFICATION OF ADDITIONAL ISSUES  UNDER THE ANTI-DUMPING
AND SUBSIDIES AGREEMENTS
Paper Submitted by the United States
The following communication, dated 5 May 2003, has been received from the Permanent
Mission of the United States.
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Trade remedies form an integral part of the current rules-based international trading system.
In Doha, the Ministers stressed the importance of the trade remedy rules by mandating that Members
should clarify and improve the rules while “preserving the basic concepts, principles and effectiveness
of the Agreements and their instruments and objectives, and taking into account the needs ofdeveloping and least developed participants”.  The United States is using  these principles to guide its
participation in the Rules negotiating process.
The United States believes that the Rules Negotiating Group may usefully explore
clarification and improvement of the rules with respect to the following issues under the Agreement
on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 (the “ADA”)
and the Agreement on Subsidies and Countervailing Measures (the  “ASCM”).  We reserve the rightto identify additional areas for clarification and improvement in the future.
1. Interpretation of Domestic Production
Articles 4.1 of the ADA and 16.1 of the ASCM define the domestic industry as “the domestic
producers as a whole of the like products or ... those of them whose collective output of the products
constitutes a major proportion of the total domestic production of those products...”.  Some Members
define “major proportion of the total domestic production” by reference to the proportion of the
domestic industry which supported the application providing the basis for initiation under ADA
Article 5.4 or ASCM Article 11.4.  In some cases, those Members may limit the injury analysis solelyto those firms which supported the application, even though this practice could obviously lead to a
distorted picture of the condition of the domestic industry, and is very difficult to square with the
authority’s obligation in ADA Art. 3.1 and ASCM Article 15.1 to conduct an “objective” examination
in the injury determination.  Members should consider whether Articles 4.1 of the ADA and 16.1 of
the ASCM should be clarified to specifically prohibit this practice.
2. Fragmented Industries
Another area where clarification may be desirable pertains to the collection of data for the
injury investigation where the domestic industry may consist of as many as several thousand different
producers.  Sometimes the production operations for a particular product vary considerably in size,
ranging from large corporate operations to such small operations as looms or farms operated byTN/RL/W/98
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individual families.  As noted, under Article 4.1 of the ADA and Article 16.1 of the ASCM, the
domestic industry is defined, subject to certain exceptions, as “the domestic producers as a whole of
like products or ... those of them whose collective output of the products constitutes a major
proportion of the total domestic production of those products…”.  This Group should consider
whether the Agreements need to be clarified to en sure that an investigating authority can satisfy its
obligation to obtain reliable and objective data on a domestic industry containing an extremely large
number of producers within the confines of an investigation of limited duration.  Issues that may be
addressed in such a clarification include relian ce by investigating authorities on information from
industry groups or governmental statistical authorities.  The United States notes that it touched upon
this issue in a recent submission.1
3. Causation
Pursuant to Article 3.5 of the ADA, when making a determination of injury, investigating
authorities must demonstrate whether there is a causal relationship between the dumped imports and
the injury to the domestic industry by conducting an examination of the effects of dumped imports
through application of Articles 3.2 and 3.4 of the ADA.  As part of that examination, in accordancewith Article 3.5 of the ADA, investigating authoritie s must consider other known causes of injury in
order to ensure that they are not attributing that injury to the dumped imports.  The third sentence of
Article 3.5 of the ADA regarding the negative obligation of  “non-attribution” thus helps to clarify the
analysis previously articulated in the first two sentences of Article 3.5.
However, in United States - Hot-Rolled Steel , WT/DS184/AB/R (adopted 23 August 2001),
the Appellate Body found that the “non-attribution” language of Article 3.5 imposes an affirmative
obligation that an investigating authority separate and distinguish the injurious effects of different
causal factors, despite the fact that Article 3.5 makes no reference at all to “separating” or
“distinguishing” the effects of such factors.  Moreover, the Appellate Body explicitly recognized that,as a practical matter, it may not be easy for an authority to conduct the analysis required by the
affirmative obligation it fashioned.
This Group should consider whether the ADA needs to be clarified to provide authorities
practical guidance in implementing the negative obligation of non-attribution and on how this
obligation should relate to the examination of the effect of dumped imports, while ensuring that any
affirmative obligations are clearly set forth in the Agreement and are workable for authorities toimplement.  Likewise, consideration should be gi ven to clarifying Article 15.5 of the ASCM with
respect to the same issue.
4. Cumulation
Article 3.3 of the ADA and Article 15.3 of the ASCM each provide that where imports of a
product from more than one country are simultaneously  subject to investigation, the investigating
authorities may cumulatively assess the effects of such imports only if they find (1) a more than
de minimis  margin in relation to the imports from each country and the volume of imports from each
country is not negligible and (2) a cumulative assessment of the effects of the imports is appropriate inlight of the conditions of competition between the imported products and the conditions of
competition between the imported products and the like domestic product.  At the heart of the ADA
and ASCM is the consensus about a need for remedies to address injurious dumping and injurious
subsidization of imports.  Members should consider whether the ADA and ASCM should be clarified
to expressly provide for the cumulation of dumped im ports with subsidized imports, in order to assess
the effects of the unfair imports on the domestic industry.
                                                     
1 See “Subsidies Disciplines Requiring Clarification and Improvement”,  Communication
From the United States, 19 March 2003 (TN/RL/W/78).TN/RL/W/98
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This of course assumes that all other prerequisites for cumulation are met, and that where
imports from a particular country are found to be both dumped and subsidized that the volume of such
imports is only counted once for purposes of any injury determination.
5. Favoured Exporter Treatment
Under the ADA, Article 6.10 requires authori ties to determine an individual margin of
dumping for each known exporter or producer concerned of the product under investigation, unless
the exception to that provision applies.  The exception permits authorities to limit their examination of
interested parties or products when the number of exporters, producers, importers or types of products
involved is so large as to make such a determination impracticable.  Nonetheless, even where thatexception applies, the non-investigated companies are covered by any resulting anti-dumping measure
and have a right to request calculation of an indivi dual rate of duty.  However, in some circumstances,
certain favoured exporters have been excluded by name, ab initio , from any investigation and from
coverage of any eventual anti-dumping measure, even though they produce merchandise like that
which is under investigation.  Members should consider whether changes to the Agreement should bemade to specifically prohibit this abusive practice.  Likewise, consideration should be given to
clarifying the ASCM provisions with respect to the same issue.
6. Exclusion of Companies
Pursuant to Articles 9.2 of the ADA and 19.3 of the ASCM, an anti-dumping or
countervailing duty imposed in respect of any product 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 or subsidized and causing injury, except for imports subject to a price undertaking.  The
practice of many Members under these provisions is to exclude from coverage of the measure anyexporter or producer which has been investigated and found not to have engaged in dumping, or
investigated and found not to have received a countervailable subsidy, during the period of
investigation.  However, this practice may not be universal.  Members should consider whether the
Agreements need to be clarified specifically to ensure that any examined exporter or producer found
not to be dumping, or found not to have received a countervailable subsidy, during an investigation
may not be covered by any measure which results from that investigation.
7. Disclosure of Essential Facts
In a previous submission
2, the United States suggested clarification of Article 6.4 of the ADA
and Article 12.3 of the ASCM (1) to explain what constitutes “timely” disclosure of all
non-confidential information used by the authorities in anti-dumping and countervailing dutyinvestigations and (2) to identify  a mechanism for giving interested parties access to non-confidential
information used by national authorities in an investigation.
Additionally, Articles 6.9 of the ADA and 12.8 of  the ASCM provide that before a final
determination is made, the authorities shall inform all interested parties of the essential facts underconsideration which form the basis for the decision whether to apply definitive measures.  As these
provisions explain, this disclosure should take place in sufficient time for the parties to defend their
interests.
The Agreements do not define what constitutes “sufficient time for the parties to defend their
interests”.  The Agreements also do not define what constitutes the “ essential facts under
                                                     
2 See “Investigatory Procedures under the Anti-Dumping and Subsidies Agreements”,
Submission by the United States, 3 December 2002 (TN/RL/W/35).TN/RL/W/98
Page 4
consideration which form the basis for the decision whether to apply definitive measures”, and in a
given investigation any number of documents might contain such  “essential facts”.
This Group should consider whether the Agreements should be clarified as to what constitutes
“sufficient time for parties to defend their interests” as well as clarification of what constitutesadequate disclosure of the “essential facts” in the context of these provisions of the Agreements.
8. Accrual of Interest
Articles 9.3.1 and 9.3.2 of the ADA provide for refunds of duties paid in excess of the final
assessment or margin of dumping, depending on whether Members assess duties on a retrospective or
prospective basis.  However, there is nothing in the Agreement that requires payment of interest onany excess monies collected and held by the importing Member.  As a result, exporters may, in effect,
be making an interest-free loan to the importing Member.  Members should consider whether changes
to the Agreement may be necessary to address this  situation.  Likewise, consideration should be
given to clarifying the ASCM provisions with respect to the same issue.
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