RESTRICTED
WORLD TRADE G/ADP/Q1/EEC/1
G/SCM/Q1/EEC/1
ORGANIZATION 1October 1996
(96-3935)
Original: English Committee onAnti-Dumping Practices
Committee onSubsidies andCountervailing Measures
NOTIFICATION OFLAWS AND REGULATIONS UNDER
ARTICLES 18.5AND 32.6OFTHE AGREEMENTS
Follow-up questions from HONG KONG
toreplies from theEUROPEAN COMMUNITIES1
Thefollowingcommunication,dated20September1996,hasbeenreceivedfromtheHongKong
Economic andTrade Office.
_______________
Prices ofother exporters
Question 1:Follow-up toHKquestion 1(a)&(b)(p.2)
Article 2.1provides that‘where theexporter intheexporting country doesnotproduce or
doesnotsellthelikeproduct, thenormal value maybeestablished onthebasisofprices ofother sellers
orproducers '.According totheanswer provided bytheEC,theWTO ADAgreement reflects a
preference fortheuseofprice when establishing normal value andArticle 2.1ismeant toreflect that
preference.
IftheECfindstheAgreement reflects apreference fortheuseofprice, whydoestheECnot
firstresort totheuseofexport price tothirdcountries?
Under Article 2.1,arethe‘other sellers orproducers 'necessarily under thesame AD
investigation? Ifnot,howwould theprice beestablished? Ifthere arenosuch‘other sellers or
producers 'intheexporting/originating country (andnosalestoathirdcountry other thantheEC),
howwould thenormal value beestablished?
According totheEC,theformer Article 2.3(c) isnolonger considered necessary. Itwould
beappreciated iftheECcould clarify itsprevious practice under theformer Article andalsoexplain
whytheArticle isnolonger necessary.
The5percentrule
Question 2:Follow-up toNewZealand question 1(a)(p.2)
Would theECclarify whatfactors would beusedtodetermine therepresentativity oftheprices
ofdomestic salesnotmeeting the5percentthreshold?
1G/ADP/W/301-G/SCM/W/309.G/ADP/Q1/EEC/1
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Start-up operations
Question 3:Follow-up toHKquestion 2,Singapore questions III(a) (b)(c)(p.2&3)
TheECinitsreply states thatastart-up phase exists where anexporter, when introducing
anewproduct, isinasituation ofhighcostandlowproduction volumes. Thisdefinition seems to
bedifferent from thescope ofthedefinition inArticle 2.5oftheRegulation, which would seem to
require theuseofnewproduction facilities. Would theECclarify whether theproduction ofanew
product inoldfacilities would beconsidered asastart-up phase?
Would theECexplain whyitconsiders that'theperiod ofcostrecovery 'ofproduct isnormally
12months andthatthestart-up phase isnecessarily shorter?
SGA andprofit inconstructed value
Question 4:Follow-up toHKquestions 3(b)(p.3)
Does Article 2.6(b) contemplate inclusion ofdatapertaining toprofitable salesonly? Isthe
firstparagraph ofArticle 2.4applicable tothedetermination ofsalesnotbeing intheordinary course
oftrade byreasons ofprice forthepurpose ofArticle 2.6(b)? Would theECalsoclarify howitwill
determine the'ordinary course oftrade'nature ofsalesofproducts notsubject totheinvestigation?
Does Article 2.6(c) contemplate inclusion ofdatapertaining toprofitable salesonly?
Constructed export price
Question 5:Follow-up toJapan question 3.1(p.3)
What isthekindofinformation onwhich theprofit amount iscalculated? Could any
generalization bemade frompastCommunity practice astotherough magnitude oftheprofit amount?
Allowances
Question 6:Follow-up toHKquestion 4&5(a)(p.4)
Incircumstances described inHong Kong'squestion 5(a),clearly there isadifference inthe
levels oftrade between export price andnormal value butitisnotpossible todemonstrate theeffect
onprice comparability inthemanner required byArticle 2.10(d). Iftheexporter candemonstrate
theeffect ofthelevel-of-trade difference onpricecomparability inother manner, would alevel-of-trade
adjustment bepossible?
Weunderstand thattheECisconsidering revision ofArticle 2.10. Would theECexplain
theimpact oftherevision, especially withreference tothesituation described inHong Kong's
question 5(a)? When doestheECexpect completion oftherevision?
Examination ofthestateoftheindustry
Question 7:Follow-up toHKquestion 9(p.5)
Would consideration oftheadditional factor that"anindustry isstillintheprocess ofrecovering
fromtheeffects ofpastdumping" possibly leadtoadetermination ofinjury which could nototherwise
havebeenledto,every other things being equal?G/ADP/Q1/EEC/1
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Standing
Question 8:Follow-up toVenezuela question 2(p.7)
Article 5.4oftheWTO ADAgreement makes itclearthatthesupport mustbeexpressed by
domestic producers. Only incaseoffragmented industries involving anexceptionally large number
ofproducers, authorities maydetermine support andopposition byusing statistically valid sampling
techniques. TheAgreement doesnotallow toascertain thestanding ofthecomplainants bygeneral
'consultations 'withrepresentatives ofthedomestic producers. Would theECexplain howisitspractice
consistent withtherequirement oftheAgreement?
Newexporter reviews
Question 9:Follow-up toHKquestion 18(p.12)
Under Article 11.4oftheECADRegulation, expedited reviews fornewcomers shallnotbe
applicable incases where dumping duties have beenimposed using sampling method. TheEC's
consideration isthatnewexporters inasampling casecannot begiven more preferential treatment
thanproducerswhichco-operatedbutdidnotreceiveindividualtreatmentbecausetheywerenotincluded
inthesample. Would theECclarify whether suchnewcomers aresubject tothesame rateofAD
duties applicable tocooperating producers notincluded inthesample, oraresubject totheresidual
ratedifferent from(andusually higher than) therateapplicable tocooperating producers notincluded
inthesample? Inthelatter case, would itnotbealessfavourable treatment tonewcomers? Would
application ofArticle 11.4notpreclude anypossibility thatanew,unrelated exporter maybeexporting
totheECatundumped prices? What possible remedies areopentosuchgrievanced newexporters?