WORLD TRADE
ORGANIZATIONTN/RL/W/48/Rev.1 *
5 February 2003
(03-0736)
Negotiating Group on Rules Original:  English
ANTI-DUMPING ACTIONS IN THE AREA OF TEXTILES AND CLOTHING:
DEVELOPING MEMBERS' EXPERIENCES AND CONCERNS
Revision
The following communication, dated 30 January 2003, has been received from the delegations
of Bangladesh;  Brazil;  the People's Republic of China;  Colombia;  Costa Rica;  Egypt;  Guatemala;Hong Kong, China;  India;  Indonesia;  Korea;  Macao, China;  Maldives;  Pakistan;  Paraguay;  Peru;
Thailand and Vietnam.
_______________
I. INTRODUCTION
1. With respect to anti-dumping practices, the Ministerial Conference in Doha agreed to the
following negotiating mandate:
"28. In the light of experience and of the increasing application of these
instruments by Members, we agree to negotiations aimed at clarifying and improving
disciplines under the Agreement[s] on Implementation of Article VI of the GATT
1994 […], while preserving the basic concepts, principles and effectiveness of the[se]
Agreement[s] and their instruments and objectives, and taking into account the needs
of developing and least-developed participants. In the initial phase of the
negotiations, participants will indicate the provisions, including disciplines on tradedistorting practices that they seek to clarify and improve in the subsequent phase.
[…]"
1.
2. Reflecting a widespread concern among deve loping country Members about the disruptive
effects of anti-dumping actions involving their exports, Ministers also adopted a number of decisions
pertaining to the subject (under their Decisions on Implementation-related Issues and Concerns).  Thesewill be brought out, as appropriate, in this paper.
II. PURPOSE OF THIS PAPER
3. In accordance with the Ministerial mandate quoted above, the purpose of this paper is:
(A) To share developing countries’ experience as regards anti-dumping activity affecting
their exports of textiles and clothing – the largest industrial export sector for them.
(B) To spell out developing countries’ needs in the area. It may be emphasised in this
connection that the Ministerial mandate specifically requires that “the needs of
developing and least-developed participants” be taken into account.
                                                     
* In English only.
1 WT/MIN/(01)/DEC/1 dated 20 November 2001TN/RL/W/48/Rev.1
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(C) To illustrate one of the particularly important aspects of anti-dumping – initiations – as
a matter for improved discipline.
It is without prejudice to any other submissions by the sponsors of this paper.
A. THE EXPERIENCE
A.1: A preliminary observation
4. The textile and clothing sector has seen the initiation of a large number of anti-dumping actions
during the last several years.  With 197 initiations during 1990 – 99 it ranked 5th among all sectors.2
5. The European Communities (EC) has been by far the biggest user of anti-dumping cases in thetextile sector, targeting it for as many as 53
3 new initiations during 1994 – 2001 or 3rd among all sectors.
The only other sectors witnessing higher numbers of EC initiations were iron and steel (77 initiations) or
chemicals (56 initiations). 4
6. Of the above total of 53 new initiations by the EC in the textile sector , 465 (or 87%) targeted
imports from developing countries.  And all but two were initiated on complaints by interested industry
associations.
7. Although the anti-dumping activity involving textile and clothing products in the United States,
the other major importing Member, has been less-pronounced, the few actions taken by it are indicative
of similar effects on developing exporting countries concerned.
8. It is also pertinent to point out at the outset that the sector has long been subject to quota
restrictions in these markets.
A.2: Experience with specific ca ses and their distorting effects
9. It is impracticable to present a comprehensive analysis of each and every aspect of anti-
dumping activity in the span of a single paper.  The following is therefore based on major predilections
gleaned from representative cases.
(i) The European Communities
10. To start with, it may be instructive to glance through the following table.  It depicts the EC
initiation and disposal of investigations into alleged dumping, and consequent injury to its domestic
producers, of three product groups from a number of developing countries.
                                                     
2 UNCTAD (2000), Impact of Anti-dumping and Countervailing Duty Actions , page 21.
3 This number does not include 11 anti-subsidy investigations.
4 Annual reports of the EC Commission to the European Parliament on the Community’s Anti-dumping
and anti-subsidy activities .
5 Of the remaining seven, two involved imports from developed countries and five from transition
economies.TN/RL/W/48/Rev.1
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Table 1
A protectionist pattern
Product Synthetic fabric Cotton fabric Bed linen
Complainant Eurocoton Eurocoton Eurocoton
Complainant’s status Industry A ssn. Industry Assn. Industry Assn.
Complaint lodged September 93 September 93 September 93
EC Investigation initiated 20.1.94 20.1.94 25.1.94
Imports from targeted countries6ECU 251.4 mn ECU 478.7 mn ECU 246.5 mn
Import share, targeted countries Volume 66.6% 43.9% 57.5%
Value    50.2% 32.3% 57.0%
Result of investigation No action No action No action
Investigation dropped 19.2.96 19.2.96  9.7.96
Time taken in investigation 2 years 2 years 2 ½ years
Whether product under QR Yes Yes Yes
Note: Import data in this table, and elsewhere in this paper, is based on Eurostat, Intra and Extra – EU trade.
11. A few conclusions stand out from the facts recapitulated in the above table:
• It is noticeable that the initiations of investigations were launched on motivated complaints by
the same industry association.
• All the complaints proved to be wrongful, with  no positive determination by the investigating
authorities.
• The simultaneous initiations covering such a large segment of the production chain were in
themselves indicative of a protectionist bias, considering in particular that, in its submission tothe EC Commission, the complainant Association had asserted that “Among other things, the
majority of the countries named have been recognized as practising dumping of upstreamproducts in the production chain”.
Obviously, the notion that countries practise dumping (as opposed to companies) was/is
misconceived.
• The very fact that developing exporting countries accounting for 44% to 67% of EC imports in
these products were alleged to be dumping was also indicative of a strong protectionist purpose.
• It is significant, too, that during the year preceding the launch of these initiations (1993), the
value of extra-EC imports in these three products from the targeted countries amounted to a
massive ECU 976.6 million
7 ($ 1.14 billion).
• Finally, it is also notable that the investigations were prolonged over two years or even longer.
In this connection it is pertinent to recall that according to the Tokyo Round Code, which
applied to the cases under reference, investigations were required to be concluded within one year after
their initiation. Likewise, the Uruguay Round Agreement on Anti-dumping also requires that
investigations be concluded within one year and in no case more than 18 months after their initiation.
                                                     
6 Based on product coverage of  first investigations and import data for 1993, i.e., the year preceding
the investigations.  For later investigations, the product coverage and the targeted countries were changed (for
which please see paragraph 13 of this paper and the table at Annex).
7  Based on the product coverage and exporting countrie s, the subject of first investigations, i.e., India,
Indonesia, Pakistan, Thailand for synthetic fabrics; China, India, Indonesia, Pakistan, Turkey for cotton fabrics;and India, Pakistan, Thailand, Turkey for bed linen.TN/RL/W/48/Rev.1
Page 4
Pattern of Investigations continues
12. The cases did not close with the termination of first investigations brought out in Table 1 above,
however.  The same industry association, Eurocoton, persisted with the complaints which led to the re-
initiation of further investigations by the Commission.  These complaints were lodged within a matter of
days of the close of previous investigations, in some cases even earlier. Developments with respect to
these, and yet more back-to-back, investigations are summarized in Table 2 below.
Table 2
The pattern continues
Product Cotton fabrics Bed linen
Second investigation
Previous investigation terminated   19.02.96       9.07.96
New complaint lodged by Eurocoton     8.01.968    30.07.96
EC investigation initiated   21.02.969    13.09.96
Provisional duties announced   20.11.96     13.06.97
Provisional duties lapsed   18.05.97
Definitive duties imposed      None     28.11.97
Third investigation
Yet another complaint by Eurocoton   26.05.9710
EC investigation initiated   11.07.97
Provisional duties announced     7.04.98
Provisional duties lapsed     5.10.98
Panel/Appellate Body fault EC methodology 3.10.2000(Panel)11
1.03.2001(AB)12
Still further investigation
Yet another complaint by Eurocoton 3.9.2002 (India)
4.11.2002 (Pak)
EC investigation initiated 4.12.2002 (India)
18.12.2002 (Pak)
13. The product coverage for the first investigation in cotton fabrics was much wider (118 EC
Combined Nomenclature – CN – positions.13)  However, out of these 118 positions, the coverage was
reduced to 15 and 14 CN positions for the second and third investigations respectively.14  The countries
targeted were also changed. Egypt was added for cotton fabrics.  For bed linen Egypt was added
whereas Thailand and Turkey excluded.  The result was that the share of extra-EC imports targeted for
alleged dumping investigations became even larger:  59 per cent compared to 44 per cent in the first
investigation in terms of volume, and 56 perr cent compared to 32 per cent in terms of value.
                                                     
8 Notice that the complaint is lodged even before the termination of first investigation.
9 Notice also that this new investigation is initiated just two days after the first investigation closed.
10 Here also, a new investigation is launched within 9 days after the previous case is closed.
11 Panel Report, European Communities – Anti-Dumping Duties on Imports of Cotton-Type Bed Linen
from India , WT/DS141/R.
12 Appellate Body Report, European Communities – Anti-Dumping Duties on Imports of Cotton-Type
Bed Linen from India , WT/DS141/AB/R.
13 Which is based on the harmonized classification system (HS).
14 For details of product coverage in each of the three successive investigations, please see the table at
Annex.TN/RL/W/48/Rev.1
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14. The following conclusions flow from the enumeration in Table 2 above:
• The alacrity with which the initiations were launched tells a lot and is worthy of note.
• Also apparent is the persistence of a protectionist bias in these initiations, as are flaws in the
automatic initiation of investigations following a lleged complaints by an interested party, the
concerned industry association in these cases.
• The initiations nevertheless resulted in significant distorting effects on businesses and the
exporting developing countries involved (brought out in Table 3 below).
• The damage proved to be unjustified, especially as the very methodology used by the EC in
dumping determinations has since been discredited by a Panel and the Appellate Body.
The distorting effects of EC initiations
15. It is perhaps best to demonstrate the damaging effect of initiations referred to in Tables 1 and 2
by bringing out the declines in import shares suffered by the targeted countries.
Table 3
Changes in targeted countries’ import shares
Product Before Following After Remarks/Countries
Action action termination Targeted
Synthetic fabrics 1993 1995 1997
Value 50.24% 52.89% 56.53%
Volume 66.64% 63.57% 70.44%Investigation terminated in 199
India, Indonesia, Pakistan, Thailand
Cotton fabrics 1993 1998 2000
Value 55.83% 38.58% 42.36%
Volume 59.04% 37.60% 40.44%Duties lapsed in 1998; China,
Egypt, India, Indonesia,Pakistan, Turkey
Bed linen
1993 1994 2000
Value 49.00% 47.56% 41.31%
Volume 51.84% 50.90% 44.65%Definitive duties ended in 20011
Egypt, India, Pakistan, Thailand
16. Notice the declines in import shares of affected countries, particularly in cotton fabrics where
back-to-back investigations continued from January 1994 to October 1998! In a nutshell the followingconsequences stand out from the initiations under reference.
• In the case of synthetic fabrics, the import share of the targeted countries dropped from 66.6 per
cent before the initiation of investigations to 63.6 per cent after the initiation.
• In the case of cotton fabrics, where three back-to-back investigations continued over several
years, the import share of targeted countries showed the most pronounced declines, from 59 per
cent to 37.6 per cent.  Their share could not r ecover to pre-initiation levels even after the
proceedings lapsed.
• In the case of bed linen, too, the shares of targeted countries dropped markedly.
                                                     
15 However, the proceedings were only suspended in case of India.TN/RL/W/48/Rev.1
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17. Thus by merely provoking the initiation of investigations, the complainant industry
association was able to cause substantial harm to the trade interests of the targeted countries, besides a
host of related costs on the businesses concerned.  All this, despite that the products involved were
already under severe quota restrictions.
Another glaring reality
18. To conclude the experience with these cases, it is also pertinent to point out that exporting
firms in developing countries are generally small or medium- sized, with small export volumes,
creating a strong doubt about the very capacity of dumping on their part.  It is instructive in this
regard to draw some indications fr om the initiations reviewed earlier.
19. Throughout the process of these cases, it was known both to the complainant industry
association and the EC authorities that there were large numbers of exporters in the countries
concerned.  This was confirmed by subsequent events, especially when the Commission announced
the imposition of provisional duties in cotton fabric and bed linen cases.
20. In this regard it is interesting to look at the average export volumes by firms on whom anti-
dumping duties were announced.  The following calculations have been made on the basis of the
number of companies named in the relevant EC notices.
Table 4
Average exports by firms from targeted countries
Values in Million Ecu
Product Targeted country Import value
From countryFirms from
country (No.)Average import
value per firm
Cotton fabrics16EgyptIndia
Indonesia
Pakistan      45.42
    111.81
      45.32
      73.79         14
         98
         22
       136       3.24
       1.14
       2.06
       0.54
Bed linen Egypt
India
Pakistan      25.14
      91.79
    130.66           8
         86
         62       3.14
       1.07
       2.11
21. Considering that there might be even more firms than those named in the notice,  and the fact
that duties were also announced for such other firms,  the final averages per firm would in fact amount
to be even lower.
22. In any event, the following points arise:
• The number of firms alleged as dumping is so large!
• Could small companies, sometimes accounting for as little as ECU 0.5 million worth of exports,
be capable of dumping and causing injury?
• How might such small companies be expected or able to defend their interests by taking
advantage of any procedural rights in investigations, even if these rights might theoretically be
                                                     
16 Note:  The number of firms from China whose exports were also the subject of these investigations
not indicated in the relevant EC notice.  The data in this table are on the basis of imports in the investigationperiod (1995 in the case of cotton fabrics and 1996 in the case of bed linen).TN/RL/W/48/Rev.1
Page 7
available to them (especially when the costs of  defence are recognized to be daunting even by
large businesses)?
(ii) The United States
23. In the case of the United States, the following anti-dumping orders and the results of sunset
reviews with respect to them bear reviewing:
Table 5
Anti-Dumping Duties can stay for years
Product Exporting
CountryDuty first
imposedSunset
ReviewResult of
Sunset review
Greige polyester printcloth China 16.  9.1983 2.11.1998 Duty continued
Cotton shop towels Bangladesh 20.  3.1992     1999 - do -Cotton shop towels China   4.10.1983 - do - - do -Cotton shop towels (CVD) Pakistan   9.  3.1984 - do - - do -
Source:  G/ADP/N/92/USA and G/SCM/81/USA.
24. The details of the problems highlighted by these cases are beyond the limited scope of this
paper. A few points however deserve to be noted:
• Notice the length of time the duties have been in effect:
In the case of greige polyester printcloth 19 years
In the case of cotton shop towels
From China 19 years
From Pakistan  18 ½ years
From Bangladesh 10 ½ years
• In all cases, imports in these products had also been under quota restriction for the countries
concerned.
• During the sunset review process, the US domestic industry association – American Textile
Manufacturers Institute (ATMI) – petitioned the investigating authority with a response in thereview pertaining to greige printcloth.  With respect to cotton shop towel cases, a sole US
producer, known to champion the cause of protection to domestic industry filed a response to
the investigating authority.
• In neither of the reviews were any responses filed by any parties from the exporting countries
concerned, apparently due to lack of resources.
• In all cases, the continuing duty orders were passed on the ground that revocation of duty orders
would be likely to lead to continuation or r ecurrence of dumping (or subsidization) and of
material injury to US industry within a reasona bly foreseeable time. Interestingly, in China’s
case, there have been no imports of greige polyester printcloth since the imposition of anti-
dumping duties.
A.3: Pressure for protection remains acute
25. At this juncture it is pertinent to recall that trade in textile and clothing has remained under
quota restriction for four decades.  In the face of the impending elimination of these restrictions,TN/RL/W/48/Rev.1
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domestic lobbies in major restraining countries which have long enjoyed blanket protection have of
late shifted their attention to contingent trade remedies.  They are prone to equating reduction in
import prices with dumping (irrespective of whether it be due to heightening of competition or other
causes such as declines in prices of inputs for downstream production).
26. Thus, for example, in comments filed with the United States Trade Representative in
connection with the US approach to negotiations in the area of rules under the Doha work programme,
the ATMI proceeds on the following presumption:  “After all quantitative restrictions on textile and
apparel imports are abolished, some exporting countries will undoubtedly turn to subsidies or
dumping in order to give them the edge needed to maintain a presence in our market.  The industry
cannot be disarmed during this trade firefight”.17
27. It is also pertinent that, earlier, the US Secretary of Commerce assured the textile caucus inthe House of Representatives in return for its support to the passage of the Trade Promotion Authority
legislation that “I want to emphasize the Admini stration’s commitment to enforcing our trade remedy
laws generally, and on behalf of our textile industry in particular ”.
18
28. A recent IMF/World Bank study has also concluded that “the back loading of effective
liberalization under the ATC is particularly unhelpful, as it turns what could have been a gradual
adjustment process into a shock at the end of the transition period…  This raises concerns that
political pressures might spark greater recourse to other forms of protection once quotas are phased
out, with trade remedy actions… becoming a new ‘line of defence’”.19
B. THE DEVELOPING COUNTRY NEEDS
29. The importance of trade in textile and clothing for developing countries is well-known.
Historically, the sector has been the first in the process of development of a number of countries.  It
accounts for about 20 per cent of developing countries’ exports of manufactured products.  For some
developing countries, especially the least-developed among them, its share in their export earnings iseven larger.  Manufacture of clothing, in particular, is a labour-intensive activity.  The sector is,
therefore, particularly important for the creation of employment opportunities in these economies.
30. Furthermore, in many cases, employment in text iles and clothing in developing countries has
a strong gender dimension, implying th e employment and empowerment of women.
31. Thus it is especially vital that:
• Developing countries are protected from unjustified recourse to trade remedy actions.
• The market access due to developing countries is not undermined by frivolous complaints and
initiations of investigations into allegations of dumping.
• And developing countries are also spared the costs associated with the investigative process,
bearing particularly in mind that developing country firms in general are small or medium sized.
                                                     
17 Comments dated 1 May 2002 by the American Textile Manufacturers Institute in response to request
by USTR in Federal Register Notice 02-6606. (See ATMI web site, www.atmi.org )
18 Letter dated December 6, 2001 by Commerce Secretary Donald L. Evans to Textile Caucus of the
House of Representatives.
19 International Monetary Fund / The World Bank,  26 September 2002, “Market Access for Developing
Country Exports – Selected Issues”, paragraph 68.TN/RL/W/48/Rev.1
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C. IMPROVING THE DISCIPLINE
32. As brought out in this paper, most often investigations are triggered by motivated complaints
by industry interests/associations seeking to preserve their corner of production.  Once the
investigative process starts, its adverse effects begin to reflect on purchase orders.
33. In this connection it is significant that the European Community has also now recognized20
that:
• “… Anti-dumping investigations bind considerable and increasing human and financial
resources from the economic operators concerned” and that “this is not satisfactory foranyone”.
• “The very initiation of an investigation can already put a heavy burden on exporters,
importers”, etc.
• “A special and clearly defined developing country package should be prepared…”
34. Finally, it may be recalled that, with respect to textiles and clothing, the Ministers in Doha
decided that “Members will exercise particular consideration before initiating investigations in the
context of anti-dumping remedies on textile and clothing exports from developing countries
previously subject to quantitative restrictions under the Agreement [on Textiles and Clothing] for a
period of two years following full integration of this Agreement into the WTO”
21.
III. CONCLUSION
35. This paper reveals how wrongful complaints about alleged dumping lodged for protectionist
aims and the resulting initiation of investigations caused harm to the trade interests of developing
countries concerned.  It also brings out how anti-dumping duties can remain in place for very long
periods.
36. In light of concrete experience with the cases reviewed in this paper, it is apparent that a
particularly important aspect of the Anti-Dumping Ag reement that needs to be improved relates to the
initiation of investigations.  Once the investigative process is started, its adverse effects begin to
reflect.  As the industry associations in restraining developed countries, which have long enjoyed
blanket protection due to the existence of quota restrictions on textile and clothing, appear pre-disposed to equating any price declines with dumping and pressures for protection continue to persist,
it is imperative that adequate disciplines are provided to protect developing country firms from
unnecessary initiations, particularly as these firms are generally small or medium-sized.
37. In the meantime, the restraining Members are invited to indicate as to how they would
propose to give effect to the Doha Ministerial decision
22 cited in paragraph 34 above.
                                                     
20 See WTO document TN/RL/W/13, Submission by the European Communities Concerning the
Agreement on Implementation of Article VI of GATT 1994 (Anti-Dumping Agreement) .
21 Paragraph 4.2 of the Ministerial Decisions on Implementation-Related Issues and Concerns
(WT/MIN(01)/17).
22 Ditto.TN/RL/W/48/Rev.1
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38. We reserve our right to provide further elaborations, make submissions in relation to any
other aspect of anti-dumping activity in light of experience in cases mentioned in this paper, and
submit specific proposals in due course.TN/RL/W/48/Rev.1
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Annex
A glaring example of protectionist initiation
Evolution of product coverage for cotton fabric investigations
Investigation CN codes Brief description
1st 5208 11 10 – 5212 25 90
(118 CN positions)Woven cotton fabric, all (unbleached, bleached, dyed, o
yarns of different colours, printed)
2nd 5208 11 – 5208 19
5209 11 – 5209 19(15 CN positions)Woven cotton fabric, only unbleached
5208 11 90 – 520819 *
5209 19
(12 CN positions)Woven unbleached cotton fabric (certain construction
excluded)3rd
5208 11 90 – 5208 19 **
5209 11 – 520919
(14 CN positions)- ditto -,              However 5209 11, 5209 12 added back
___________
*   As announced at time of initiation of investigation.
** As in notice imposing provisional anti-dumping duties.
__________