WTO E-LEARNING
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Detailed Presentation of Anti-Dumping in
the WTO
OBJECTIVES

Explain the basic WTO disciplines related to anti-dumping;

Explain the different anti-dumping procedures and investigations.
My Course series
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IN BRIEF
GATT and WTO rules do not prohibit "dumping" as such. Rather, they set forth the rules that Members must
respect when taking action against dumped imports.
For such action to be permissible, Members must
determine the existence and amount of dumping, and must establish that dumped imports are causing
material injury or threat to, or material retardation of the establishment of, the importing Member's domestic
industry producing the product that is "like" the dumped imported product.
I.
WHAT IS DUMPING?
If a company exports a product at a price lower than the price it normally charges in its own home market, it is
said to be "dumping" the product. Is this unfair competition? Opinions differ, but many governments take
action against dumping in order to defend their domestic industries. The Agreement on Implementation of
Article VI of the GATT 1994 (from now on "the AD Agreement") does not pass judgment on dumping. Rather,
its focus is on the actions that governments can (and cannot) take in response to dumping in their markets.
"Dumping" is defined in both Article VI of the GATT 1994, and in the AD Agreement, as the sale of an imported
product in the importing market at less than its "normal value ". As indicated above, most commonly this is
where the price of the imported good is less than the price at which the exporter sells that good in its own
home market. In this sense, dumping is a situation of international price discrimination.
Dumping is NOT the sale of an imported product for less than the price charged for the same product produced
domestically. This is price undercutting, which is a factor to be examined in the context of injury analysis, but
which is not relevant to whether or not there is dumping.
IN BRIEF
In the simplest of cases, the existence of dumping is identified by comparing prices in two markets. In this
case, dumping would exist where: Price of imported good < Home market price in exporting market
IN DETAIL
However, the situation is rarely, if ever, that simple, and in most cases it is necessary to undertake a series of
complex analytical steps in order to determine the appropriate price in the market of the exporting country
(known as the "normal value") and the appropriate price in the market of the importing country (known as the
"export price") so as to be able to undertake an appropriate comparison.
The calculations can get complicated for a variety of reasons.
For instance, imagine a situation where the
product subject to investigation is not sold at all in the market of the exporting country. Why could that be?
One reason could be that there is no domestic market for that product. Imagine that there is production of ski
boots in a tropical country whose citizens rarely if ever travel abroad to snowy countries. There likely would be
no domestic sales of ski boots in the producing country (i.e., 100 per cent of the production would be
exported), and hence there would be no home market price to which the export price could be compared in
order to determine whether the exported ski boots were dumped.
That is, the usual price comparison
calculation could not be performed. The question becomes how, in such a situation, an investigating authority
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could determine the normal value of the ski boots? This and related questions are addressed later on in the
section on normal value.
I.A.
DUMPING AND THE GATT YEARS
FROM ARTICLE VI OF THE GATT 1947...
Under Article VI of GATT 1947, certain disciplines were established for situations where dumping was causing
injury to a domestic industry in the importing market. Article VI allowed an "anti-dumping duty" to be imposed
at the border upon importation to offset or prevent the dumping. The level of the duty could be equal to, but
not higher than, the margin of dumping.
As tariff rates were lowered over time following the original GATT Agreement, anti-dumping duties were
increasingly imposed, and the inadequacy of Article VI to govern their imposition became ever more apparent.
Article VI requires a determination of injury caused by dumping, but does not contain any guidance as to how
that determination is to be made. It addresses the methodology for establishing the existence of dumping, but
only in general terms.
...TO THE AGREEMENT ON ANTI-DUMPING PRACTICES
Consequently, Contracting Parties to GATT 1947 negotiated successively more detailed Codes relating to antidumping. The first such Code, the Agreement on Anti-dumping Practices, entered into force 1967 as a result of
the Kennedy Round. However, the United States never signed this "Kennedy Round Code", which as a result
had little practical significance.
The anti-dumping Agreement that resulted from the Tokyo Round negotiations (the "Tokyo Round Code"),
which entered into force in 1980, represented a quantum leap forward. Substantively, it provided far more
guidance about the determination of dumping and of injury than did Article VI, including explicitly requiring
that such determinations be made on the basis of an investigation conducted by the authorities of the
importing country.
Equally important, it set out in substantial detail certain procedural and due process
requirements that had to be fulfilled in the conduct of such investigations. Nevertheless, the Code still
represented only a general framework for countries to follow in conducting investigations and imposing duties.
It was also marked by ambiguities on numerous controversial points, and was limited by the fact that only the
27 Parties to the Code were bound by its requirements.
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I.B.
DUMPING AND ANTI-DUMPING IN THE WTO
IN DETAIL
Unlike the Kennedy Round and Tokyo Round Codes, the WTO Anti-dumping Agreement is a multilateral (as
opposed to a plurilateral) agreement. . The AD Agreement therefore must be accepted as part of the "single
undertaking" by all current Members and by any country joining the WTO. That is, the AD Agreement applies
to all Members.
In the following pages, we will review the following elements:

The legal documents underpinning anti-dumping actions in WTO;

How to establish whether imported goods are being dumped;

How to establish whether the dumped imports are causing or threatening to cause injury to the
domestic industry;

How to determine the level of anti-dumping duties;

The procedures to be followed in initiating and conducting investigations, including the collection of
information;

The procedures for review and termination of anti-dumping duties;

Judicial review;

Dispute settlement;

The Committee on Anti-Dumping Practices; and

Notification requirements.
Before you dive - hopefully without drowning - into specific provisions of the AD Agreement, please remember
that you can contact your tutor anytime in case you have a question or need a clarification on the above.
I.C.
ARTICLE VI OF GATT 1947 AND THE ANTI-DUMPING
AGREEMENT
WHO'S WHO?
Article VI of GATT allows countries to take action against dumping.
The AD Agreement clarifies and expands on Article VI, and the two operate together.
Under these provisions, countries are allowed to act in a way that would normally break the GATT principles of
binding a tariff and not discriminating among trading partners.
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Typically, anti-dumping action means charging an extra import duty on a particular product imported from a
particular exporter in order to bring the price of the imported product up to its "normal value" by offsetting the
margin of dumping.
As we will see below, anti-dumping measures also may take the form of price
undertakings.
Important note
The AD Agreement is rather long and complex. Essentially, it represents an effort to balance potentially
conflicting interests: on the one hand, the interest of importing countries in imposing anti-dumping measures
to prevent or remedy injury to their domestic industries caused by dumped imports; and on the other hand,
the interest of exporters (and importers and consumers) for whom anti-dumping measures and procedures
should not themselves become obstacles to fair trade.
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II.
ANTI-DUMPING
IN BRIEF
Article VI of GATT and the AD Agreement explicitly authorize a Member to impose specific anti-dumping
measures on imports from a particular source, in addition to ordinary customs tariffs, when the importing
Member demonstrates through a properly-conducted investigation that dumping is causing or is threatening
to cause material injury to a domestic industry or would materially retard the establishment of a domestic
industry.
A product is to be considered as being dumped when it is introduced into the commerce of another country
at less than its "normal value", normally the comparable price at which the product is sold in the domestic
market of the exporting country, or if there is no such price, a comparable price for sale of the like product to
a third country market, or the cost of production of the product plus a reasonable amount for selling costs
and profit.
Under Article VI of GATT 1994, and the AD Agreement, WTO Members can impose anti-dumping measures if
they determine:
(a)
that dumping is occurring;
(b)
that the domestic industry producing the like product in the importing country is suffering material
injury or threat thereof, or that the establishment of a domestic industry is being materially
retarded; and
(c)
that there is a causal link between the two.
In addition to substantive rules governing the determinations of dumping, injury, and causal link, the AD
Agreement sets forth detailed procedural rules for the initiation and conduct of investigations, the imposition
of measures, and the duration and review of measures.
IN DETAIL
The text Article VI of the GATT reads in relevant portion:
Anti-dumping and Countervailing Duties
1. Members recognize that dumping, by which products of one country are introduced into the commerce of
another country at less than the normal value of the products, is to be condemned if it causes or threatens
material injury to an established industry in the territory of a Member or materially retards the establishment
of a domestic industry…[A] product is to be considered as being introduced into the commerce of an
importing country at less than its normal value [i.e., as being dumped], if the price of the product exported
from one country to another
(a)
is less than the comparable price, in the ordinary course of trade, for the like product when
destined for consumption in the exporting country; or
(b) in the absence of such domestic price, is less than either
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(i) the highest comparable price for the like product for export to any third country in the ordinary
course of trade, or
(ii) the cost of production of the product in the country of origin plus a reasonable addition for
selling cost and profit.
2. In order to offset or prevent dumping, a Member may levy on any dumped product an anti-dumping duty
not greater in amount than the margin of dumping in respect of such product. For the purposes of this
Article, the margin of dumping is the price difference determined in accordance with the provisions of
paragraph 1.
...
6.(a) No Member shall levy an anti-dumping […] duty on the importation of any product of the territory of
another Member unless it determines that the effect of the dumping […] is such as to cause or threaten
material injury to an established domestic industry, or is such as to retard materially the establishment of a
domestic industry.
Further, the AD Agreement states:
Article 1 (Principles)
An anti-dumping measure shall be applied only under the circumstances provided for in Article VI of
GATT 1994 and pursuant to investigations initiated and conducted in accordance with the provisions of this
Agreement. The following provisions govern the application of Article VI of GATT 1994 in so far as action is
taken under anti-dumping legislation or regulations.
The AD Agreement also contains detailed provisions elaborating on all of the above elements contained in
Article VI of GATT 1994.
EXERCISES:
1.
What is dumping? What are the possible bases for determining normal value?
2.
What must a Member do to have the right to apply an anti-dumping measure?
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II.A.1. ILLUSTRATION 1
Let's assume that Member A and Member B are Members of the WTO. Vegi Company is a producer of
vegetables in Member B. Because of the excessive production of tomatoes in the world during the current year
and the increased availability of high quality tomatoes on the international market, Vegi is unable to sell its
production of tomatoes for the year, and is facing great losses if it does not find a market for its production.
Vegi decides to sell its tomatoes in Member A by offering them at a price ($1.00 per kg) that is below the
prevailing market price for tomatoes of similar quality in Member A. Meanwhile, the selling price in Member B
for the same tomatoes is $2.00. The tomato producers in Member A experience a slump in their domestic sales
of tomatoes, and request the government of Member A to impose anti-dumping duties on tomatoes imported
from Member B.
The government of Member A could potentially apply an anti-dumping duty on tomatoes up to $1.00/kg.,
representing the margin of dumping, i.e. the difference between the selling price of tomatoes in Member B and
the export price to Member A. To be able to do so, however, Member A first needs to conduct an investigation,
and it only could proceed with an anti-dumping duty if in that investigation it determined that: 1) Vegi was
exporting its tomatoes to Member A at a price below the price at which Vegi is selling the same tomatoes in its
home market (in Member B); 2) the domestic tomato producers in Member A are suffering injury; and 3) there
is a causal link between the injury suffered by the domestic industry and the dumped imports.
The Products in an Anti-dumping Investigation
The three different products in and AD investigation
Before moving on to discuss calculation issues, we have to examine the issue of the product/s in an
anti-dumping investigation.
Conceptually, in an anti-dumping investigation, we can distinguish three different "products": (1) the product
under consideration (or the exported product); (2) the product that is "like" the exported product, sold in the
exporter's home market; and (3) the product that is like the exported product, produced by the domestic
industry of the importing country. The conceptual relationships of these products are shown below:
Product under Consideration
(Investigated exported product)
For determining
NV
For injury
LIKE PRODUCT
in domestic market of
exporter, or in 3rd country
export market
Dumping analysis
Figure 1:
LIKE PRODUCT
produced by domestic
industry in importing
country
Injury and causation analysis
Products in an anti-dumping investigation
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At the top of the diagram, we find the "product under consideration". Depending on the jurisdiction, it is also
known inter alia as "subject merchandise", "subject goods", "investigated goods", "investigated product", etc.
This is the product exported at allegedly dumped prices and hence the product that is alleged to be causing
injury to the domestic industry.
Why is the "product under consideration" relevant in an anti-dumping investigation?

First, because this is the product for which we need to know the export price – one of the two elements
in a dumping determination - as we will see below when we discuss how to determine the export price;

Second, when conducting the injury analysis, the AD Agreement requires an investigating authority to
consider among other things the trends in dumped imports of the "product under consideration", as we
will see below when we address issues pertaining to the injury determination.
More generally, the "product under consideration" is the product covered by the investigation, as identified in
the notice of initiation.
investigation.
As such, this product is the focus of and point of reference for all aspects of the
Starting with the application, and the product it alleges to be dumped, the investigation will
examine normal values for the product that is "like" that product, to determine the margin of dumping, and will
examine the performance of the industry in the importing country producing the "like" product, to determine
injury and causation.
Ultimately, any anti-dumping measures will apply only to the "product under
consideration". $In other words, the "product under consideration" determines the scope of the investigation
and of any eventual anti-dumping measures.
Because the scope of the eventual anti-dumping measure depends on the definition of the product under
consideration, this determination is generally subject to a lot of discussion during the course of an
investigation.
For example, the domestic industry in the importing country - as a complainant – may be
interested in a broad definition of "product under consideration", as this would mean wider coverage of any
anti-dumping measure that might be applied.
On the other side, exporters, importers and consumers may
seek as narrow a definition as possible of the "product under consideration", to constrain the scope of
application of an eventual anti-dumping measure.
II.A.2. CASE STUDY 1
We'll examine an actual (review) investigation conducted by the EC on imports of colour televisions (CTVs)
from China, Korea, Malaysia and Thailand.
measure in force on these products.
This review concerned a (previously-imposed) anti-dumping
During the course of the review investigation, questions as to the
inclusion or exclusion of certain variants of the product were addressed. (The public notice concerning this
review investigation is Regulation (EC) No 1531/2002. The text below is excerpted from that public notice.)
a)
Product description
The product concerned was CTVs with a diagonal screen size of more than 15,5 cm, whether or not combined
in the same housing with a radio broadcast receiver and/or clock. The product was classifiable within CN
codes ex 8528 12 52, 8528 12 54, 8528 12 56, 8528 12 58, ex 8528 12 62 and 8528 12 66.
In a previous review of this anti-dumping measure, Regulation (EC) No 710/95 excluded from the definition
of the product concerned D2MAC sets and high definition televisions (HDTVs) since these products, which
introduced qualitative technical changes, were at that time still in the development stage and were not
available to the public except in very limited circumstances. Subsequent Regulation (EC) No 2584/98, which
amended the anti-dumping duty regulation resulting from that previous review, confirmed that these
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products should not be included in the scope of the product definition at that time, since the investigation
had not brought to light any new factual evidence that would justify their inclusion. I In the review
investigation examined in this case study, again no new evidence justifying the inclusion of these products
was submitted, and it therefore was concluded that D2MAC sets and high definition televisions were not
covered by the investigation.
b)
Arguments of the parties during the review investigation
One importer requested the exclusion from the scope of the investigation of so-called internet CTVs, which
integrate an internet modem and computer operating system that allow access to the internet via the TV
screen, and which are controlled by a remote control unit that includes a full keyboard. In an internet CTV,
all the necessary modem circuitry is integrated into the body of the television set, instead of having a
separate set-top box.
The importer argued that the exclusion was warranted in view of the differences in basic physical and
technical characteristics between standard CTVs and internet CTVs, and in view of the different consumer
perceptions of these two products.
The differences in the basic physical characteristics of internet CTVs consisted of the additional internet
components in the CTV, which represented around 60% of the total costs of the internet CTV, and the
keyboard that is integrated into the remote control.
Regarding the basic technical characteristics, the importer argued that the internet CTV sends and receives
data not via broadcasting technology but via the telephone system using the modem. Furthermore, it
employs technology which is different from the basic technology in CTVs; it incorporates a system for secure
access to the internet, secure socket layer (SSL), a browser technology for the display of internet graphics on
standard resolution CTVs, and a modem that translates digital into analogue signals, which can travel over a
standard phone line.
The importer alleged that the different consumer perception of an internet-CTV compared to a standard CTV
was proven by the fact that internet-CTVs were sold at retail level at more than twice the price of a standard
CTV. Furthermore, it was argued that the integrated internet circuit imparts a distinct additional quality to an
internet-CTV. In support of its position, the importer cited a case on video cassette recorders from Japan and
Korea (VCRs) in which it was concluded that where a VCR and a CTV are combined in a single housing, this
combination has to be regarded as a distinct product.
The applicant claimed that such exclusion was not warranted. It disagreed that internet CTVs had different
basic physical and technical characteristics, and argued that the internet component was comparable to the
teletext in a CTV. The applicant argued that internet should be considered as a more modern form of teletext
and therefore an additional feature of CTVs, rather than a new product lacking the basic characteristics of
CTVs. In its view, since CTVs with teletext were covered by the investigation, internet CTVs also should be.
The applicant also questioned the importer's arguments concerning consumer perceptions, arguing that
internet CTVs had been launched only recently. The applicant further argued that the high percentage of
costs represented by the internet element was due to the recent introduction of internet CTVs. In support of
this argument, the applicant submitted evidence showing that at the time of the introduction of the teletext
facility in CTVs, the cost of teletext was substantially higher than they were at the time of the review
investigation examined in this case study.
Finally, the applicant contested the relevance of the example of the combined VCR/CTV, arguing that in such
a combination the VCR has an independent function, whereas in an internet CTV, the internet function does
not work without the CTV, but instead is an addition to it.
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c)
Findings of the investigation
The investigation revealed that an internet CTV was a product that combines in a single housing two
technologies producing two sufficiently distinct end uses: (1) sending and receiving electronic mail and
accessing the world wide web; and (2) viewing television programmes. Given the addition of the internet
function, the CTV part of the unit did not necessarily determine the character of the entire product. To the
contrary, it was the internet function that predominated over the CTV. Indeed, this combination contained a
specific element that imparted an additional function to the internet CTV compared with a standard CTV,
allowing the former to be considered as different for the purpose of the review investigation.
The above conclusions were reached on the basis of the information gathered in the course of the
investigation and relating to the period of investigation. Given the early stage of development of the internet
CTV, and the fact that the product was only available to the public in small quantities, it could not be
excluded that the conclusions reached regarding product scope would need to be revisited in light of further
developments of the product in the future. Thus, in the event of a future new review of the measures in
place, the situation of these products would have to be re-examined, on the basis of the information
gathered in that future review, to determine whether such exclusion would still be justified.
Furthermore, despite differences in screen sizes, sound systems, broadcast systems, screen types and
formats, and picture frequency, it was found that all CTVs shared the same basic physical and technical
characteristics and the same use, and that therefore they formed a single product.
Like product
In the course of the investigations, it was established that CTVs originating in or exported from the countries
concerned and destined for the Community, shared the same basic physical and technical characteristics and
end-uses as CTVs manufactured and sold by the Community industry on the Community market. It was also
found that there were no differences between the CTVs produced and sold in the countries concerned,
including Turkey which was used as an analogue country, and those exported to the Community, which were
both identical to the CTVs manufactured and sold by the Community industry on the Community market.
These products are therefore alike within the meaning of Article 1(4) of the basic Regulation.
LIKE PRODUCTS IN AD INVESTIGATION
"Like product in the domestic market of the exporter..."
In examining whether dumping is taking place, the investigating authority will have to determine the "like
product in the domestic market of the exporter". This will be the product sold in the domestic market of the
exporting country.
Why is the "like product in the domestic market of the exporter" relevant in an antidumping investigation?
The like product in the domestic market of the exporter is important because its price normally will form the
basis of the normal value to be used in the dumping calculation. That is, the first choice for determining the
"normal value" of the investigated product is the price at which the "like product" is sold in the domestic
market of the exporting country.
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Are not the "product under consideration" and the "like product in the domestic
market of the exporter" identical?
In case of commodities (e.g., fertilizers, minerals, raw agricultural products), the "like product in the domestic
market of the exporter" will most likely be identical to the "product under consideration". That is, for these
goods, generally there will not be important product differentiation as between the domestic and export
markets. In other cases (e.g., involving consumer goods), the investigating authority will most often be faced
with products in the two markets that are not identical. This might be due to, for instance, differences in
consumer taste or technical requirements.
An example?
For instance, colour televisions sold in the US are different from those sold in Europe, inter alia because of
differences in voltage (110V in the US, 220V in Europe). Thus, normally a colour TV made for the US market
will not work in Europe. This applies to all other electronic goods.
What happens if the "product under consideration" and the "like product in the domestic market of the
exporter" are not identical? Can we still compare the price of the "product under consideration" to the price at
which the "like product" is sold in the domestic market of the exporting country?
The AD Agreement states that "like product" must be interpreted to mean a product which is identical, i.e. alike
in all respects to the product under consideration, or in the absence of such a product, another product which,
although not alike in all respects, has characteristics closely resembling those of the product under
consideration. Continuing the above example, the question would be whether otherwise identical 110V and
220V television sets meet the standard of having "closely resembling characteristics".
What characteristics should be examined in order to determine whether the product
sold in the domestic market of the exporting Member "closely resemble[es] those of
the product under consideration"?
The AD Agreement is silent on this issue. However, investigating authorities worldwide tend to consider at least
the following factors:

Physical characteristics of the product;

Raw materials used;

Manufacturing process;

Tariff classification;

Consumer preference and end-use;

Quality.
Thus, in the case of the colour TVs mentioned above:
An investigating authority would have to look at the physical characteristics of the TVs sold in the US and in
Europe.
It would then probably see that some technical components are different because of the voltage and other
physical differences.
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It would then examine the inputs used in the production of both TVs. These would include, for both types of
TVs, colour picture tubes, transistors, etc. It would also examine the manufacturing process.
It would then examine what both types of TVs are used for. It would finally assess aspects relating to
consumer preferences and perhaps quality differences between the two types of colour TVs.
Ultimately, based on the outcome of the analysis of each of the above factors, the investigating authority
would need to arrive at a conclusion on whether the two kinds of colour TVs are, or are not, "like" in the sense
of the AD Agreement.
What if the product sold in the domestic market of the exporting country is neither identical to, nor has
characteristics closely resembling those of, the product under consideration? Then, the price at which that
product is sold in the domestic market of the exporting country cannot be used as the basis for the normal
value.
II.A.3. CASE STUDY 2
The following analysis was taken from the same determination examined in Case Study 1, of the EC
investigation targeting imports of colour TVs from China, the Republic of Korea, Malaysia and Thailand.
Like product
In the course of the investigations, it was established that CTVs originating in or exported from the countries
concerned and destined for the Community, shared the same basic physical and technical characteristics and
end-uses as CTVs manufactured and sold by the Community industry on the Community market. It was also
found that there were no differences between the CTVs produced and sold in the countries concerned,
including Turkey which was used as an analogue country, and those exported to the Community, which were
both identical to the CTVs manufactured and sold by the Community industry on the Community market.
These products are therefore alike within the meaning of Article 1(4) of the basic Regulation.
The third product is the "like product in the importing country". This is the product manufactured and sold by
the domestic industry in its domestic market and plays a central role in an injury determination.
Why is the "like product in the importing country" relevant in an anti-dumping
investigation?
The "like product in the importing country" is relevant because the AD Agreement requires that an
investigating authority determine the impact of the dumped imports on the state of the domestic producers of
the like product in the importing country.
The Agreement further requires that the investigating authority
evaluate the state of that industry by examining a number of factors such as the development of sales of the
like product manufactured by the domestic industry. The injury determination cannot therefore be carried out
unless an investigating authority determines whether the domestic industry produces a product "like" the
"product under consideration".
Here again, the same definition of "like product" applies.
That is, "product under consideration" and the
product in the importing country are like where they are identical or where the latter has "characteristics
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closely resembling those of the product under consideration". The factors to be examined are those we have
seen above.
What if the product manufactured and sold by the domestic industry in the
importing country is neither identical nor it has characteristics closely resembling
those of the product under consideration?
Based on the AD Agreement, in this case there is no domestic industry producing the like product, and hence
no basis for an anti-dumping investigation or the imposition of anti-dumping measures.
That said, if an
industry to produce the like product in the importing market is in the process of establishment, but has not yet
come on stream, there is a possibility to carry out an investigation, and impose a measure, on the basis of
"material retardation of the establishment of an industry."
II.A.4. ILLUSTRATION 2
Let's explain this with an example:
For instance, suppose that the companies in the importing country being injured produce radios and they
complain that due to cheap imports of colour TVs, consumption of radios has fallen, causing them to be
materially injured.
Can the domestic industry of radios request the initiation of an anti-dumping
investigation on colour televisions?
No, because radios are neither identical to the product imported - i.e. the product under consideration, the
colour TV - nor do they have characteristics closely resembling those of colour TVs. Hence, in this case the
domestic producers of radios could not request the initiation of an investigation against colour TVs. Nor could
any injury determination be supported based on injury suffered by producers of radios due to imports of colour
TVs.
If, however, investors are actively engaged in trying to establish a new industry to produce colour televisions in
the importing country, an investigation potentially could be conducted to determine whether "establishment" of
the industry were being "materially retarded", and in case of an affirmative outcome, a measure could be
applied. There are, however, no guidelines in the AD Agreement for how to analyse allegations of material
retardation.
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III.
DETERMINATION OF DUMPING
IN BRIEF
Dumping is established by comparing the "normal value" and the "export price".
Generally, the normal value is the price at which the like product is sold for consumption in the market of the
exporting country.
The export price is the price at which the exporter sells the product to the importing country.
The AD Agreement states that a product is to be considered as being dumped where the export price of the
product exported from one country to another is less than the normal value of that product, which normally is
the comparable price, in the ordinary course of trade, for the like product when destined for consumption in
the exporting country.
Any dumping calculation will include the following four steps:

The observed or constructed export price;

The observed or constructed normal value;

The adjusted normal value and the adjusted export price (reflecting adjustments to ensure
comparability); and

The margin of dumping.
These steps will be examined in the following sections.
III.A. DETERMINATION OF THE EXPORT PRICE
Although the term "export price" is not defined in the AD Agreement, the export price will normally be the price
charged by the exporter for the product when exported to the importing Member.
III.A.1. EXCEPTIONS
The AD Agreement recognizes that in certain circumstances, the price from the exporter to the importer, or to
a third party, may not be reliable. One such circumstance is where there is no export price. This could occur,
for example, where the product is sold on consignment (i.e., the selling price is not fixed until the product is
actually sold to a purchaser in the importing country), or transferred to a related entity for further processing
before sale in the importing country. Another situation where the price charged by the exporter may not be a
reliable indicator of the export price to be used in the dumping calculation is where the exporter sells the
product to a related importer. This happens very often where large companies, such as Sony, Samsung,
General Electric, etc. are involved in investigations.
Another circumstance that can lead to price unreliability is
a "compensatory arrangement" between the exporter and the importer or a third party, such as where the
exporter gives discounts, refunds or rebates, after the export transaction has taken place.
15
In such cases, the AD Agreement provides for an alternative method of determining the export price to be used
in the dumping calculation, namely a "constructed export price". Such a price is to be calculated on the basis
of the price at which the imported products are first resold to an independent buyer in the importing country.
If the imported product is not resold to an independent buyer, or is not resold as imported, the authorities may
determine a reasonable basis on which to construct the export price.
III.A.2. EXAMPLE: AN INVESTIGATION OF PARACETAMOL - EXPORT PRICE
We will explain each of the steps in the calculation with the help of an example.
Member A initiated an
investigation concerning imports of paracetamol from Member B. The sole producer of paracetamol in
Member B is "Paracetamol PLC". This company provided a response to the questionnaire it received from the
investigating authority in Member A. The investigating authority will have to calculate the margin of dumping.
The first step will be to calculate the export price. As a general rule, the margin of dumping is to be calculated
by comparing weighted average export price to the weighted average normal value. Thus, the first step is to
calculate these weighted averages. This process is shown in the table below for the export price:
Number of Sale
Date
Gross Price
Quantity (Kg)
1
15.01.2011
8
10
80
2
15.02.2011
7
10
70
3
15.03.2011
6
10
60
4
15.04.2011
6
10
60
5
15.05.2011
8
10
80
6
15.06.2011
7
10
70
7
15.07.2011
8
10
80
8
15.08.2011
6
10
60
CIF (USD/Kg)
Price times
quantity
9
15.09.2011
6
10
60
10
15.10.2011
8
10
80
11
15.11.2011
9
10
90
12
15.12.2011
9
10
90
120
880
Total
Weighted Average Export Price (PxQ)÷Q
Table 1:
7.33
Calculation of the weighted average export price
The investigating authority does not have any indication that the export prices for the 12 transactions reported
in the above table might be affected by an association or compensatory arrangement between Paracetamol PLC
and the importer. The investigating authority will therefore determine the export price on the basis of the price
paid by the importer. In this simple example, the weighted average export price (WAEP) will be 7.33 USD/kg.
The next step is to calculate the normal value. We now turn to that issue.
16
III.B. DETERMINATION OF THE NORMAL VALUE
III.B.1. GENERAL RULE
The AD Agreement recognizes three possible options to determine normal value:
Preferred basis:
Domestic prices in the exporting country
Exception:
Export price to a third
country
Figure 2:
Note: No hierarchy
between these two
Exception:
Constructed value in the
exporting country
Options for the determination of the normal value in an anti-dumping investigation
The first, preferred, basis in the AD Agreement for determining normal value is, as discussed above, the price
at which the exporter sells the like product "when destined for consumption in the exporting country", i.e. in
the exporter's domestic market.
When normal value cannot be determined on that basis, two alternatives are available: the price charged by
the exporter in another country (known as third country market price); or a constructed value obtained by
adding to the cost of production of the like product in the country of origin a reasonable amount for selling,
general and administrative expenses and for profits. (This is referred to as constructed normal value).
III.B.2. ILLUSTRATION 3
Let's suppose that the Gambia initiates an anti-dumping investigation regarding imports of wheat flour from
the United States. How will the investigating authority in the Gambia obtain information on the prices at which
the US exporters sell wheat flour in the US domestic market? The Gambian investigating authority will be
asking the US wheat flour exporters to provide that information. The investigating authority also may request
information on the prices of US exports of wheat flour to third country markets, as well as on the cost of
production, selling costs and profits for US production of wheat flour. In this way, the investigating authority
would have all of the information necessary to determine normal value on any of the bases provided for in the
AD Agreement.
Normal value will be based on sales prices of the like product in the domestic market unless any of the
following situations arise:

There are no sales of the like product in the domestic market of the exporting country - recall the case
of ski boots in Malaysia!
17

There are sales in the home market but in low volume - normally where home market sales represent
less than 5% of the volume of export sales to the importing Member. This situation arises frequently in
countries with small domestic markets. (The AD Agreement, however, encourages the use of a lower
ratio where the evidence demonstrates that such lower ratio nevertheless would allow for a proper
comparison.)

There is a "particular market situation" that justifies not using the prices of sales of the like product in
the domestic market The AD Agreement, however, does not define what might constitute such a
"particular market situation".

Sales in the home market are not "in the ordinary course of trade" - again, this term is not defined by
the AD Agreement. The following situations might lead to findings of sales not being in the ordinary
course of trade:

There are sales between related parties. Similar to the situation that may arise when calculating the
export price, there are many instances where the exporter sells in its domestic market through related
parties. In such instances, a question may arise whether the price charged to the related purchaser is
reliable. If not, that price might be rejected as the basis on which to calculate normal value.

There are sales below cost: Under certain circumstances, the AD Agreement allows sales below cost to
be treated as not being in the ordinary course of trade, and thus disregarded, i.e. not included, in the
normal value calculation normal value.

There are liquidation sales: An example would be sales of clothing at the end of a season at very low
prices.

There are sales to employees
Where, because of the occurrence of any of the above situations, normal value cannot be determined on the
basis of domestic sales prices, an investigating authority will have to proceed with any of the alternative
methods explained below.
III.B.3. EXCEPTIONS
Third country market price. The AD Agreement contains few rules on how to calculate normal value on the
basis of export prices to a third market, other than that the third country should be "appropriate", and that the
export price to that country should be "representative". Members determining normal value on this basis have
developed understandings about these terms. Thus, for instance they generally test the volume of exports to a
given third country against the volume of exports to the importing Member, i.e. the Member conducting the
investigation. If the volume sold to the third country is very low in comparison to the volume of exports to the
importing Member, they may not select the sales to that third country as a basis for the determination of
normal value.
(This test, which although not provided for in the AD Agreement is applied by numerous
Members, is similar to the so-called "home market sufficiency test" provided for in the AD Agreement, whereby
home market sales shall be considered to be of sufficient quantity for the establishment of normal value if they
are at least five per cent of the sales of the product to the importing Member.)
Constructed normal value (CNV). As far as constructed normal value is concerned, as noted this is not a
price charged by the exporter but rather is a value calculated by the investigating authority in the importing
Member, exclusively for the purpose of its anti-dumping investigation. The AD Agreement tells us that to obtain
the CNV, an investigating authority must sum up the cost of production, and reasonable amounts for selling,
general and administrative costs and for profits. The AD Agreement contains rules on how costs should be
18
calculated. It also establishes a set of rules for the calculation of the selling, general and administrative costs
as well as of profits.
III.B.4. OUR INVESTIGATION OF PARACETAMOL - NORMAL VALUE
In our investigation, the next step will be to determine the price at which Paracetamol PLC sold paracetamol in
its domestic market. For that purpose, the investigating authority of Member A asked Paracetamol PLC to
provide information on its selling prices of paracetamol in Member B (i.e., on its home market prices). The
information received from Paracetamol PLC is set forth in the table below. Again, the weighted average needs
to be calculated, and this process is as follows:
Number of
Date
Gross Price
Sale
Quantity (Kg)
CIF (USD/Kg)
1
01.01.2011
5
20
2
01.02.2011
6
20
3
01.03.2011
6
20
4
01.04.2011
7
20
5
01.05.2011
7
20
6
01.06.2011
8
20
7
01.07.2011
5
20
8
01.08.2011
5
20
9
01.09.2011
6
20
10
01.10.2011
6
20
11
01.11.2011
6
20
12
01.12.2011
5
20
Total
240
Weighted Average Normal Value (P*Q)÷Q
Table 2:
Price times Quantity
100
120
120
140
140
160
100
100
120
120
120
100
1440
6
Calculation of the weighted average normal value
As we see in the above table, Paracetamol PLC made 12 sales in its domestic market, each of 20 kg. Thus, in
total it sold 240 kg. of paracetamol in the domestic market.
As we have seen in the earlier section, the
amount exported to Member A was 120 Kg. The volume sold in the domestic market therefore is twice the
volume exported, i.e., far more than the 5 per cent threshold below which home market sales could be
considered to be insufficient as a basis for determining the normal value.
Therefore, sales in the domestic
market cannot be disregarded on account of low volume.
19
In addition, let us assume that there is no "particular market situation", or any reason to believe that any of
the domestic market sales transactions was not in the ordinary course of trade. Hence, the normal value in this
particular case will be based on the prices at which Paracetamol PLC sold the like product in its domestic
market. The weighted average normal value (WANV) therefore will be 6 USD/kg.
We now have calculated the weighted average (observed) export price (USD 7.33) and the weighted average
(observed) normal value (USD 6.00. Assuming that no adjustments are required to either of these values, the
result of comparing them would be that there is no dumping (because the export price is higher than rather
than lower than the normal value. It may be, however, that one or both of these values needs to be adjusted
to ensure that they are fully comparable before the dumping margin can be calculated.
This process is
discussed in the next section.
III.C. FAIR COMPARISON OF NORMAL VALUE AND EXPORT
PRICE
IN BRIEF
In general terms, the AD Agreement requires that the comparison of the export price and the normal value
be "fair".
More specifically, the AD Agreement requires that the comparison between export price and
normal value must be made at the same level of trade, normally at the ex-factory level, and in respect of
sales made at as nearly as possible the same time.
Furthermore, based on the results of numerous WTO disputes, we know as well that using "zeroing" in
dumping calculations violates inter alia the "fair comparison" rule. ("Zeroing" is assigning a value of zero to
any individual negative margins of dumping - i.e., where the export price is above, rather than below, the
normal value - in calculating the weighted average margin of dumping for the investigated product.)
IN DETAIL
Why does the AD Agreement require that a comparison be made at the same level of
trade, and normally at the ex-factory level?
Concerning level of trade, this is because differences in levels of trade (trader, wholesaler, distributor, retailer,
end user, etc.) may affect prices. In particular, a producer typically will vary its prices based on level of trade
because the producer's selling costs will vary from one level of trade to another.
For example, a producer
selling directly to end-users generally would need to make many small sales (incurring selling costs on each
one) to reach a given total sales volume, while a producer selling to a trader or wholesaler would need to make
fewer, larger sales to reach that same sales volume, and thus would economise on the total cost of selling that
volume.
Similarly, the requirement normally to compare the export price and the normal value at ex-factory level is
aimed at avoiding the distorting effect that factors such as transport, insurance, etc. may have on the
comparison of the export price and the normal value.
20
III.C.1. ILLUSTRATION 4
Let's look at an example: Suppose that a producer sells urea in its home market at USD 150/ton. The same
company exports urea at USD 120/ton to Member A. If we compare these two figures we find that the export
price (USD120/ton) is lower than the normal value (USD 150/ton), yielding an apparent dumping margin of
USD 30/ton.
However, let's suppose that the domestic buyer has asked the producer to deliver the product to the buyer's
warehouse, and that the cost of transporting a ton of urea from the factory to the warehouse is USD 50/ton.
This is therefore the amount that the producer of urea will have to pay to a transport company to bring the
urea from the factory to the warehouse. Thus, what the producer/exporter earns for a ton of urea sold in the
domestic market is not USD 150/ton, but USD 100/ton.
Let's further suppose that the importer of the good in Member A also has requested that the producer/exporter
deliver the urea to the importer's warehouse, and that the cost of transport is USD 20/ton. Again, we deduct
the cost of transport and we find that the producer earns USD100 for a ton of urea exported to Member A.
In this example, when we deduct the cost of transport from the selling prices in both markets, we find that the
export price is equal to the normal value. What does this mean? It simply means that, when we adjust the
prices on both sides of the dumping calculation to remove cost elements such as transport, in order to arrive at
the "real" prices as required by the AD Agreement, the apparent margin of dumping disappears. That is, there
is no dumping.
Adjusting - in the circumstances contemplated by the AD Agreement – is not optional for the investigating
authority; it is the authority's obligation. The obligation exists even if it might be difficult, in a particular case,
to make the required adjustments.
What sorts of factors require an adjustment? Those affecting price comparability. The AD Agreement names a
few: conditions and terms of sale (this includes transport, insurance, credit, guarantees/warranties, packaging,
etc.); taxation; levels of trade; quantities; and physical characteristics. But the AD Agreement also requires
that any other differences that are also demonstrated to affect price comparability must be adjusted. And it
further requires the authorities to indicate to the parties what information is necessary to ensure a fair
comparison (i.e. what information is needed to make a given adjustment.)
The above example where an adjustment was needed involved differences in transport costs.
Another
commonly-needed adjustment is for differences in credit costs. A producer may sell "at sight" in its domestic
market, while on its export sales it may give 30 days credit. In this case, the investigating authority could
adjust the export price by deducting from it the cost relating to the credit provided by the exporter. In this
example, no adjustment would be made to the normal value because "at sight" implies no cost to the producer.
As another example, imagine that the product is auto CD players.
For the export market these units are
equipped with an anti-theft device. By contrast, auto CD players sold in the domestic market do not have such
a device due to the low rate of theft in that country. The products are therefore different in terms of physical
characteristics. An investigating authority could only compare the export price with the normal value after
having adjusted for the difference (i.e., the anti-theft device) between the units produced for the two markets.
Finally, the AD Agreement states that authorities must indicate to the parties in question what information is
necessary to ensure a fair comparison and must not impose an unreasonable burden of proof on those parties.
21
III.C.2. OUR INVESTIGATION OF PARACETAMOL - ADJUSTMENTS
We have calculated the weighted average (observed) normal value and weighted average (observed) export
price in earlier sections. As noted above, if we compare these weighted averages - normal value of USD 6/kg
and export price of USD 7.33/kg - no dumping will be apparent. The export price is higher, not lower, than the
normal value.
Now, let us change the example.
In particular, now let's suppose that in its questionnaire response, the
exporter has stated the following:
"Domestic sales:
In the domestic market we give our clients 90 days to pay. The interest rate that banks charge us for shortterm borrowing is 10% per year (0.028% per day). We also deliver the paracetamol to the warehouse of our
clients. The cost of transport is 0.38 USD/kg.
Export sales:
On our export sales, we give our clients 180 days to pay. The interest rate that banks charge us for short-term
borrowing is 10% per year.
We export on a CIF (cost plus insurance and freight) basis. The total cost of
transport and insurance amounts to 2.50 USD/kg."
Based on this information, the investigating authority will need to make appropriate adjustments to both the
normal value and the export price to take account of the credit, transport and insurance costs that are
embedded in the prices charged in the home market and export market. We'll start with normal value.
IN DETAIL
Adjustments to normal value and export price
Based on the information in the exporter's questionnaire response, two adjustments to the normal value are
needed. The first relates to the credit costs. The producer has incurred certain credit expenses given that it
allows its domestic customers 90 days to pay their bills.
How much should we deduct from the weighted
average price calculated above (USD 6/kg)? Different investigating authorities calculate credit costs in different
ways.
One possibility is by applying the following formula:
Where:
"v" is the value of the sale
"i" is the interest rate
"d" is the number of days given to pay
"365" is the number of days in a year
The calculation thus would be:
((USD 6/kg) * 0.1 (10% interest rate) * 90 (days given to pay))/365 = USD 0.15/kg
22
Furthermore, an adjustment for the domestic transport and insurance cost is warranted. The amount is
provided by the exporter in its questionnaire response: USD 0.38/kg.
Having calculated the two adjustments, the final step is to obtain the adjusted normal value, by deducting the
credit, transport and insurance costs from the USD 6 weighted average price per kg of each transaction. This
gives us a weighted average adjusted home market price of:
USD 6.00/kg - USD 0.15 - USD 0.38 = USD 5.47
Thus, the adjusted weighted average home market price, that is, the weighted average normal value, is
USD 5.47.
The next step will be to calculate the weighted average export price.
The explanation given above for the calculation of the adjustments for credit, transport and insurance costs
also applies here. With regard to the credit costs, since the length of credit terms given on export sales is
different from that given on sales in the domestic market, we will have to compute the amount again.
The formula will be:
(USD 7.33/kg) * 0.1 (10% annual interest rate) * 180 days to pay) / 365 = USD 0.36/kg
Transport and insurance costs are taken from the questionnaire response of the exporter. They are much
higher than those charged in the domestic market because, for exports, the product has to be brought from
the factory to the port, loaded into a ship, and shipped to the port in the importing country. The amount to be
deducted, as reported in the questionnaire response, is USD 2.50/kg.
To arrive at the adjusted weighted average export price, we must deduct the USD 0.35/kg and USD 2.50/kg
from the weighted average selling price for exports of USD 7.33/kg, as follows:
USD 7.33 - USD 0.36 - USD 2.50 = USD 4.47
Thus, the weighted average export price is USD 4.47/kg.
We are now ready to calculate the dumping margin!
23
III.D. CALCULATION OF THE DUMPING MARGIN
IN BRIEF
The AD Agreement contains rules governing the calculation of dumping margins. In the usual case, the AD
Agreement requires either the comparison of the weighted average normal value to the weighted average of
all comparable export prices, or a transaction-to-transaction comparison of normal value and export price.
IN DETAIL
The following slide shows the basic formula for calculating the margin of dumping in percentage terms:
Figure 3:
Basic formula for calculating the margin of dumping
Important note
Normally, the margin of dumping is expressed as a percentage of the adjusted export price; this is why the
difference between the adjusted normal value and the adjusted export price is divided by the adjusted export
price.
III.D.1. OUR INVESTIGATION OF PARACETAMOL - THE DUMPING
MARGIN
We have determined that the adjusted weighted average normal value is USD 5.50/kg and that the adjusted
weighted average export price is USD 4.48/kg.
Let's apply the above formula for calculating the margin of
dumping in percentage terms:
(5.50 – 4.48) / 4.48 = 22.8%
Given that the result is a positive number (the normal value is higher than the export price), we have found
that the product under investigation is dumped, and that the margin of dumping is 22.8 per cent. Thus, one of
the necessary elements for application of a measure - dumping - has been found.
A word on "zeroing"
Our example above is very simple, as only a single, uniform product is involved. Sometimes, however, the
product covered by an anti-dumping investigation may have a number of different presentations, or "models",
which are sufficiently distinct from one another that each requires its own margin calculation. (That is, the
24
differences are too significant to be addressed via adjustments.)
An example might be fresh, chilled and
frozen salmon in all presentations (whole, gutted, head-on, head-off, filleted or otherwise cut in pieces, etc.).
It could be that the production processes (i.e., cost structure) and pricing of these different presentations or
models are sufficiently diverse that each should have its own dumping margin calculation, while ultimately a
single, weighted average dumping margin should be calculated for each producer (covering all of the models
that it produces). In such a case, it may be that for some models, no dumping (in fact, negative dumping) is
apparent, because for that model the weighted average export price exceeds the weighted average normal
value. For other models, there may be dumping. The question becomes how to calculate the overall weighted
average dumping margin for all of the models combined, and in particular, how in the weight-averaging across
models to treat the models where no dumping/negative dumping is apparent.
There has been a lengthy series of WTO disputes about this issue. Some Members have applied the practice of
"zeroing" the negative margins (i.e., assigning them a value of zero in the weight averaging), on the grounds
that a negative margin signifies an absence of dumping ("zero" dumping). Other Members instead factor the
full negative margin into their weighted average calculations.
The Appellate Body ultimately has ruled in a
series of cases that "zeroing" violates various provisions of the AD Agreement, including the "fair comparison"
provisions. Thus, the full value of the negative margins of dumping needs to be included in calculating the
overall weighted average margin of dumping.
The example below illustrates this:
Weighted average dumping margin
Quantity
Margin * Quantity
Model 1
8.5%
10
+ 85.00
Model 2
-5.3%
5
- 26.50
Model 3
9.1%
7
+ 63.70
Weighted Average overall margin of dumping, all models:
With zeroing
(NOT PERMITTED)
Without zeroing
INDIVIDUAL DUMPING MARGINS AND SAMPLING
The AD Agreement requires that in principle, when anti-dumping duties are imposed, a dumping margin be
calculated for each exporter known to the investigating authority.
Is an investigating authority required to
calculate an individual margin of dumping for each exporter even where there are many of them (e.g.,
hundreds or even thousands)?
No. In those cases, the AD Agreement allows an investigating authority to
select a sample, and to calculate individual margins of dumping only for the exporters included in the sample.
However, the AD Agreement also sets forth rules to determine how the margin of dumping for the nonsampled exporters must be calculated.
25
NEXT STEPS
Calculation of the dumping margin is not the "end of the road", but only the first step, for the application of an
anti-dumping measure.
As discussed in the first section, for an anti-dumping measure to be applied, the
authorities also must make a determination that the domestic industry producing the like product in the
importing country is experiencing injury due to the dumping. We therefore now turn to examining the state of
the domestic industry.
EXERCISES:
3.
How is the dumping margin calculated?
26
IV.
DETERMINATION OF INJURY AND CAUSAL
LINK
After calculating the margin of dumping, the next step is to determine whether the domestic industry
producing the like product in the importing country is suffering injury as a result of the dumped imports.
IN BRIEF
The determination of injury and causal link will require us to go through a number of steps:

Determination of what is the "like product" produced by the "domestic industry";

Identification of which producers constitute the domestic industry;

Determination of whether the domestic industry is suffering injury (including data collection and
analysis);

Determination of whether the injury suffered by the domestic industry is caused by the dumped
imports.
These are the basic questions on the injury side of an anti-dumping investigation.
IV.A. LIKE PRODUCT
We have examined at some length above the concept of "like product". It is important to recall that a product
identical to, or with characteristics closely resembling those of, the imported product must be produced in the
importing Member. Otherwise, it would not be possible to proceed further with the examination of injury.
Let's imagine for instance that apples are the product imported at dumped prices.
There are, however, no
producers of apples in the importing country. Indeed, bananas are the only fruit produced in the importing
country. Before being able to consider whether domestic banana producers are injured by imports of dumped
apples, an investigating authority first would have to ask whether bananas, not being identical to apples,
nonetheless are "like" apples in the sense of having characteristics closely resembling those of apples.
To answer to this question, the investigating authority would have to consider all relevant factors, as
mentioned in the previous section.
These would need to include in the first place the products' physical
characteristics, and also might include raw materials, production process, end use, and users' perceptions,.
Let's suppose that the result of the examination is the (perhaps obvious) conclusion that bananas do not have
characteristics closely resembling those of apples, i.e., that bananas are not a "like product" to apples.
What would this mean? It would mean that no like product is produced in the market of the importing country,
and hence that there is no domestic industry to examine. As a consequence, the investigating authority would
not have a basis for an injury investigation or determination. Thus, because it would be impossible to make
two of the three determinations required for the imposition of an anti-dumping measure (i.e., the
determinations of injury and causation), the investigation on imports of apples would have to be terminated
immediately, without the imposition of measures!
27
IV.B. DOMESTIC INDUSTRY
IN BRIEF
The AD Agreement defines the term "domestic industry" to mean "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". Importers that do not themselves produce the like
product therefore cannot be considered "domestic producers".
IN DETAIL
Why do we need to identify a "domestic industry"?
Because the investigating authority will have to determine the existence of injury in respect of a particular
domestic producer or group thereof producing the product that is "like" the investigated product. For that
purpose, information will have to be sought from that or those domestic producers.
While conceptually the domestic industry is composed of all the producers of the like product, the AD
Agreement opens the door to considering less than 100 per cent of the domestic producers as the "domestic
industry". In this case, the determination of injury will be based on information relating to these producers.
DOMESTIC PRODUCERS "AS A WHOLE" OR THOSE ACCOUNTING FOR "A MAJOR PROPORTION OF
TOTAL DOMESTIC PRODUCTION"
The AD Agreement provides for two bases on which the domestic industry can be defined. First, and clearly
the most accurate, is "domestic producers as a whole", that is producers accounting for 100 per cent of
domestic production of the like product. There may be situations in which it is difficult or impossible to gather
data from, or even to identify, all domestic producers of the product, however. For example, it could be a
highly fragmented industry with hundreds or thousands of small producers.
The AD Agreement thus also
allows the domestic industry to be defined as those domestic producers whose collective output of the like
product accounts for "a major proportion" of total domestic production of that product.
In fact, the AD
Agreement does not express a hierarchy between these two bases for identifying (and thus gathering and
analysing data on) the domestic industry. That said, panels and the Appellate Body have ruled that where the
domestic industry is defined for purposes of an injury investigation as less than all domestic producers, care
must be exercised that the industry is not defined in a way that would introduce a bias into the results of the
investigation. In particular, it is not allowed to exclude entire categories of producers of the like product from
the domestic industry definition. For example, it is not permissible to exclude producers of one presentation of
the like product, where more than one presentation is produced). Nor is it permissible to define the industry
as only including "cooperative" domestic producers, or those willing to provide data, or those supporting the
application.
EXCLUSION OF CERTAIN DOMESTIC PRODUCERS FROM THE DOMESTIC INDUSTRY
The AD Agreement recognizes that in certain circumstances, it may not be appropriate to include all producers
of the like product in the domestic industry (even where the industry is defined, in principle, as the domestic
28
producers as a whole).
In particular, Members are permitted to exclude from the definition of "domestic
industry":

Producers related to the exporters or importers under investigation; or

Producers who are themselves importers of the allegedly dumped product.
The AD Agreement contains its own definition of when a producer is to be considered "related" to an importer
or an exporter.
IV.C. INJURY
INJURY AS A LEGAL CONCEPT
IN BRIEF
The AD Agreement does not define the term "injury", although it does specify that three types of injury may
be found in an anti-dumping investigation:

"Material" injury to a domestic industry;

Threat of material injury to a domestic industry; or

Material retardation of the establishment of a domestic industry.
IN DETAIL
The AD Agreement does not define any of the above types of injury but it tells an investigating authority what
it must examine in order to determine whether a domestic industry has suffered "material" injury or threat
thereof. The AD Agreement does not provide any specific rules on how a determination of "material
retardation" must be conducted, and "material retardation" cases are rare. We turn now to the rules applicable
to injury investigations.
General requirements applicable to injury determinations:
As an overarching obligation, the AD Agreement requires that a determination of injury must be based on
"positive evidence" and involve an "objective examination" of:

The volume of the dumped imports;

The effect of the dumped imports on prices in the domestic market for like products; and

The consequent impact of these imports on domestic producers of such products.
The AD Agreement develops in detail what is expected, at a minimum, from an investigating authority with
respect each of the above items:
29
With regard to the volume of the dumped imports, an investigating authority must consider whether there has
been a significant increase in dumped imports, either in absolute terms or relative to production or
consumption in the importing Member.
Important note
It is not required that the volume of dumped imports has increased, but rather that the investigating
authority consider whether there has been any such increase. However, a decrease in the volume of
dumped imports might be a factor weighing against a finding that the domestic industry has suffered injury
due to dumped imports.
It also should be noted that the increase might be in "absolute" terms, or "relative" to production or
consumption. Thus, there might be situations where there is no absolute increase in dumped imports because,
for instance, the total consumption of the like product has decreased, but dumped imports, in relative terms
(to production or consumption) might have increased.
As far as the effect of the dumped imports on prices is concerned, an investigating authority must consider
whether there has been a significant price undercutting by the dumped imports as compared with the price of
the like product produced in the importing Member, or whether the effect of such imports is otherwise to
depress prices to a significant degree, or to prevent price increases that otherwise would have occurred, to a
significant degree, for that like product.
EFFECT OF DUMPED IMPORTS ON THE PRICES OF DOMESTIC LIKE PRODUCTS
Thus, an investigating authority must examine whether dumped imports have any effect on the prices at which
the domestic industry sells the like product. As noted, these "effects" can be in the form of "price
undercutting", "price depression" or "price suppression". In some cases, "price undercutting" might be
observed together with, for instance, "price suppression".
Let's look at an example:
250
200
150
Price DLP
COP DLP
100
Price Dumped I.
50
0
2007
2008
2009
2010
2011
30
2007
2008
2009
2010
2011
Price domestic like product
150
155
150
140
145
Cost of production, domestic like product
125
130
135
140
145
Price dumped imports
200
170
150
140
140
Figure 3:
Relationship of prices of dumped imports, and costs and prices of domestic like products
While the AD Agreement does not set forth any particular methodology to assess "price undercutting",
generally the term means selling at a lower price.
Thus, assessing whether there is price undercutting by
dumped imports involves comparing the price of those imports with the price at which the domestic industry
sells the like product in the domestic market.
In the example in Figure 4, in the most recent period of time, i.e. 2011, the price of dumped imports is lower
than the price of the domestic like product (140 vs. 145), i.e., there appears to be price undercutting by the
dumped imports during that period.
Furthermore, the data presented show that the domestic industry's cost of production has been rising steadily
over the entire period for which data are available. Under this circumstance, the domestic industry could have
been expected to increase its selling prices in order to pass on the cost increases. However, in the above case
we see that this did not happen.
Rather, at the same time that unit production costs increased from 125
to 145, the domestic industry's selling price decreased from 150 to 145. In the meantime, the price of dumped
imports dropped from 200 to 140. One possible conclusion is that the price pressure from the dumped imports
has prevented the domestic industry from raising its prices, which otherwise it would have done.
In other
words, this could be a case of "price suppression"?
Finally, we observe that the domestic industry's selling prices decreased during the 5-year period, from 150
to 145. This could be an indication that the dumped imports have depressed the domestic industry's prices to a
significant degree.
It should be noted, however, that the AD Agreement does not contain any methodology or guidance as to how
to assess whether there is "price suppression" or "price depression" due to dumped imports, or as to when any
such suppression or depression is "significant".
IMPACT OF THE DUMPED IMPORTS - THE CONDITION OF THE DOMESTIC INDUSTRY
Finally, the examination of the impact of the dumped imports on the domestic industry concerned must include
an evaluation of all relevant economic factors and indices having a bearing on the state of the industry,
including:

Actual and potential declines in sales, profits, output, market share, productivity, return on
investments, or utilization of capacity;

Factors affecting domestic prices;

The magnitude of the margin of dumping;

Actual and potential negative effects on cash flow, inventories, employment, wages, growth, ability to
raise capital or investments.
31
The AD Agreement provides that this list is not exhaustive, and that no one or several of these factors will
necessarily be determinative in a given case.
Nevertheless, in any analysis of injury, all 15 of the above
factors must be considered (i.e., analysed).
Investigating authorities should treat injury investigations on a case by case basis, with no single factor or
group of factors necessarily being decisive in all cases. Each investigation involves a unique set of facts, and
thus all of the above mentioned factors must be evaluated, and considered within the overall context in which
the domestic industry operates. This context could include business cycles, product life cycles, conditions of
competition among domestic and other competitors, or other circumstances.
These considerations should be
part of the assessment by the investigating authorities as to whether the industry is suffering injury (as
opposed, for example, to experiencing typical business upswings and downswings).
The ultimate conclusion as to whether or not the domestic industry is being injured may rest on fewer than all
of the obligatory, listed factors, but it must be apparent that all were examined.
SPECIFIC REQUIREMENTS FOR DETERMINATIONS BASED ON THREAT OF MATERIAL INJURY
A finding of current, present material injury is not necessary for an anti-dumping measure to be applied.
Rather, a finding that there is a threat of material injury is one of two alternative bases for a measure
(material retardation of establishment of an industry being the second).
"Threat" implies that if certain
changes take place - notably increases in the volume or rate of the dumped imports, reductions in their prices,
etc. - material injury will occur in the imminent future. Although the threat of injury analysis is necessarily
prospective in nature, the AD Agreement emphasizes that a threat determination cannot be based "merely on
allegations, conjecture or remote possibility", but must instead be based on facts. Furthermore, "the change in
circumstances which would create a situation in which the dumped imports would cause injury" needs to be
"clearly foreseen and imminent".
The AD Agreement sets forth a non-exclusive list of specific factors to be considered (in addition to the 15
listed injury factors discussed above) in determining whether the domestic industry faces a threat of material
injury, including:

The rate of increase in dumped imports
A significant rate of increase of dumped imports into the domestic market indicating the likelihood of a
substantially increased importation.

Capacity
Sufficient freely disposable capacity of the exporter, or an imminent, substantial increase of that
capacity, indicating the likelihood of substantially increased dumped exports to the importing Member's
market, taking into account the availability of other export markets to absorb any additional exports.

Price Suppressing or Depressing Effects
Whether the dumped imports are entering the market at prices that will have a significant depressing or
suppressing effect on domestic prices, and would likely increase the demand for further imports.

Inventories
Inventories of the imported product being investigated, whether held in the country of export or in the
importing investigating country. (A buildup of inventories of the domestically-produced like product also
might be relevant.)
32
As noted, a determination of threat of injury cannot be based solely on these threat-specific factors, but also
must take into account all 15 of the factors pertaining to the condition of the domestic industry, discussed in
the previous section.
Furthermore, the AD Agreement requires that, where an affirmative injury determination is based on the threat
of material injury, "the application of anti-dumping measures shall be considered and decided with special
care". This provision suggests that an even higher level of scrutiny is expected in investigations predicated on
threat of, as compared to actual, material injury. Thus, the investigating authorities should provide a
particularly thorough discussion of the analysis and rationale underlying a decision to impose anti-dumping
duties in any final determination that is based on a determination of threat of material injury, setting forth the
factual evidence leading to the conclusion that injury would be imminent if no anti-dumping action were taken.
MATERIAL RETARDATION OF THE ESTABLISHMENT OF AN INDUSTRY
As noted, the AD Agreement provides for a third possible basis for an injury finding, material retardation of the
establishment of an industry. Formally, all of the requirements for analysing the state of the domestic industry
(the 15 listed factors, the question of the impact of dumped imports on the condition of the domestic industry,
etc.) are applicable in material retardation cases, but there is no specific guidance in the AD Agreement as to
how to do this, and there have been very few anti-dumping measures based on material retardation. It is clear
that in practice, many of the listed factors may be of limited relevance (for example, level of production may
not be able to be analysed if the industry in the process of establishment has not yet started producing).
Furthermore, the AD Agreement contains no definition of what constitutes an industry "in establishment".
Thus, investigating authorities should proceed very cautiously in considering allegations of material retardation
due to dumped imports.
IV.D. DEMONSTRATION OF A CAUSAL LINK
Let's suppose that the investigating authority of Member B has found that the imported goods from Member A
are dumped and that the domestic industry of Member B is suffering injury. This still is not a sufficient basis to
apply an anti-dumping measure. Rather, the final requirement under the AD Agreement is a demonstration
that the dumped imports have caused injury, and this demonstration must be based on an examination of all
relevant evidence. While imports need not be the only cause, or even the predominant cause, of any injury
found to exist, there must be a causal relationship. Furthermore, as part of this analysis, the authority must
ensure that it does not attribute to the dumped imports any injury caused by known factors other than those
imports.
In respect of the causation and non-attribution requirements of the AD Agreement, the Appellate Body has
ruled that the investigating authority must demonstrate on the basis of the evidence that there is an
affirmative genuine and substantial relationship of cause and effect between the dumped imports and the
injury. In addition, in conducting the non-attribution analysis, the investigating authority must separate and
distinguish the injury caused by other factors from that caused by dumped imports.
The AD Agreement does not specify particular factors or give detailed guidance on how the relevant evidence is
to be evaluated. Again, recalling the overarching obligations, the injury/causation analysis must be based on
positive (i.e., robust, verifiable) evidence, and involve an objective examination of the volume of dumped
imports and their effect on domestic prices, and the consequent impact of those imports on the condition of the
33
domestic industry. All of the factors discussed in the preceding section are to be taken into account in this
analysis.
In addition, the AD Agreement lists some possible factors to examine in the consideration of known factors
other than dumped imports that may be causing injury. These factors are:

Volumes and prices of imports not sold at dumped prices. Returning to the example referred to above,
let us suppose that the dumped imports from Member A represent 15% of the total imports in Member
B and that the prices of the other, non-investigated imports (from countries C, D and E) are
considerably lower than the price of the dumped imports. The question that one could pose is whether
injury suffered by the domestic industry is due to the much larger volume of imports from countries C,
D and E (which, not being investigated, cannot be treated as "dumped"), rather than to the dumped
imports from Member A.
(There is no clear-cut right or wrong answer to this example, it is simply
meant to point to issues and questions that would need to be explored in the "non-attribution" analysis.

Contraction in demand and changes in the pattern of demand. One example might be hula hoops,
which were a fad during a particular year, but which went out of fashion the following year. The sharp
drop in the domestic industry's production, employment, profits etc. for hula hoops might be solely
attributable to this contraction in demand, and not to dumped imports.

Developments in technology. An example could be portable digital storage devices, from floppy disks
to micro disks to data sticks. A decline in production, employment, profits etc. for one kind of device
might well be due to its displacement in the market by a next generation device, which uses different
technology.

Export performance and productivity of the domestic industry. Let's suppose that a domestic industry
historically has exported 90% of its output of a product, because the domestic market is very small.
Let's further suppose that the industry's exports cease abruptly, due to new import restrictions in the
export markets. At the same time, the industry starts facing dumped imports in its domestic market,
and its selling price in that market declines by 3 per cent. An investigating authority finds that the
imports are dumped and that the domestic industry is injured. The question, however, is whether the
dumped imports have contributed in a real and substantial way to the injury, or whether in fact the
injury is exclusively a function of the disappearance of the export markets.

The AD Agreement contains no guidance on how either the causal relationship or non-attribution is to
be established.
In practice, different Members use different methodologies, ranging from detailed
qualitative analyses of prices, costs, other conditions of competition to sophisticated econometric
models.
While there is no one right approach, the most important thing is for the investigating
authority to provide in its reports and determinations a detailed explanation and justification, based on
the factual evidence on the record, relating to both the finding of affirmative causality and the nonattribution analysis.
EXERCISES:
4.
How is a determination of injury to the domestic industry reached?
5.
How is a causal link between dumped imports and injury established?
34
V.
PROCEDURAL REQUIREMENTS
V.A. INTRODUCTION
The AD Agreement contains detailed procedural requirements on a number of issues, which are applicable at
different stages of the proceeding. These are contained in among others, Articles 5 (Initiation and Subsequent
Investigation), 6 (Evidence), 7 (Provisional Measures), 8 (Price Undertakings), 9 (Imposition and Collection of
Anti-dumping Duties), 10 (Retroactivity), 11 (Duration and Review of Anti-dumping Duties and Price
Undertakings), 12 (Public Notice and Explanation of Determinations), 13 (Judicial Review), 14 (Anti-dumping
Action on Behalf of a Third Country), 15 (Developing Country Members), 16 (Committee on Anti-dumping
Practices), 17 (Consultation and Dispute Settlement), 18 (Final Provisions), and Annexes I (Procedures for the
On-The-Spot Investigations Pursuant to Paragraph 7 of Article 6) and II (Best Information Available in Terms of
Paragraph 8 of Article 6).
TIP
Before plunging into those provisions, it must be stressed that anti-dumping investigations conducted by
WTO Members must, at a minimum, comply with the requirements contained in the Agreement. WTO
Members are free, and in some cases even encouraged by the AD Agreement itself, to establish additional
procedural requirements.
Should a Member fail to respect certain provisions of the AD Agreement, Article 13 allows an interested party
to request the judicial review of final determinations and reviews of determinations, before an independent
judicial, arbitral or administrative tribunal maintained for that purpose within the jurisdiction of the importing
Member. Thus, the investigating authority may be found to have violated provisions pertaining to the use of
anti-dumping measures under the national legislation implementing the AD Agreement.
In addition, under the AD Agreement, an affected Member can use the WTO dispute settlement mechanism if it
considers that the authorities of the importing Member have violated one or more substantive or procedural
provisions of the AD Agreement.
Whether under national procedures or WTO dispute settlement, findings of violation may require the measure
to be removed. It is therefore essential, even for Members that are new users of anti-dumping, to comply
strictly with all of the requirements set forth in the AD Agreement.
35
STAGES OF AN INVESTIGATION
Any investigation may be conceptually and chronologically divided into the following stages:
DURATION: Normally 12 months; cannot exceed 18 months
Figure 4:
Stages of an investigation
Any anti-dumping measure, either in the form of anti-dumping duty or price undertaking, can only be imposed
after an investigation consistent with the AD Agreement has been conducted.
In a nutshell, this entails a number of distinct steps or stages, the first of which is that an investigation be
initiated. Once this has been done, a number of obligations will apply, including informing the parties
(exporters, importers, domestic producers, etc.) of the information that they need to submit.
This starts the process of gathering the information to be used in the investigation. The examination,
verification and analysis of this information will form the heart of the investigation. Relevant information that
is found to be complete and accurate will be taken into account in the preliminary and/or final determinations,
which are the next steps in the investigation process.
Only if there are affirmative final determinations of
dumping, injury and causation, can a measure ultimately be applied.
Those determinations in turn must be based on the information before the investigating authority.
In
particular, the focus of the authority's analysis of the information is to determine whether the conditions for
imposing measures are met. Should the relative determinations be affirmative, the government of the Member
may then consider whether it is in its interest to impose a measure, whether any measure should be for the full
amount of the dumping margin or something less, whether to accept a price undertaking from an exporter in
lieu of imposing a duty, and similar questions.
Should the Member determine, however, that the dumping margin is zero or "de minimis", that the volume of
imports is negligible, that the domestic industry is not injured, or that dumped imports have not caused injury,
there will be no legal basis for any measure.
In such cases, the Member must terminate the proceeding
without the imposition of measures.
The entire process of investigation, from initiation to final determinations of dumping, injury and causation,
and decisions related to the application of measures, normally lasts for at least 12 months.
While some
investigations proceed more quickly than this, in many other cases the process will take longer. The AD
Agreement makes some allowance for this, providing that in exceptional circumstances an investigation can
last as long as, but in no case more than, 18 months following initiation.
36
V.B.
THE PROCESS LEADING TO THE INITIATION OF AN
ANTI-DUMPING INVESTIGATION
The AD Agreement establishes a number of requirements for the initiation of investigations. The following slide
shows the main elements of the pre-initiation stage:
Figure 5:
Main elements of the pre-initiation stage of an anti-dumping investigation
Normally, an investigation will be initiated at the request of the domestic industry, on the basis of a written
application.
As an exception to this rule, an investigation can be initiated ex oficio by the authorities of the importing
Member, but only in special circumstances, and on the basis of sufficient evidence of dumping, injury and
causal link to justify initiation.
The application should contain evidence of dumping, injury to the domestic industry, and a causal link between
the dumped imports and the alleged injury. The AD Agreement specifies what this information should be, to
the extent it is reasonably available to the application.
Mere assertion of dumping, injury and causation,
unsupported by evidence, is insufficient.
Once an application is received, the investigating authority must examine the accuracy and adequacy of the
evidence it contains, to determine whether there is sufficient evidence to justify the initiation of an
investigation.
If the authority concludes that there is insufficient evidence on dumping, injury or causal
relationship, then the application must be rejected.
Sufficient evidence in the application is not, however, enough for an investigation to be initiated. Rather, the
investigating authority also must determine whether the applicants are sufficiently representative of the
domestic industry, i.e., whether the applicants have "standing" to bring the case.
The AD Agreement contains a two-part standing test that must be applied by the investigating authority in
every case.
37

The first part of the standing test is that domestic producers that support the application (i.e. that
favour the eventual application of an anti-dumping measure) must account for more than 50% of the
total production of the like product by all producers expressing an opinion about the application (either
in support of or opposition to it).

The second part of the standing test is that the domestic producers that support the application must
account for more than 25% of total domestic production of the like product.
How does it work in practice? The following example provides an illustration:
Category of Domestic Producer
Quantity of Production
a. Producers, applicants
30
b. Producers, non-applicants, supporting
20
c. Producers, non-applicants, opposing
20
d. Producers, no opinion expressed
30
TOTAL, ALL DOMESTIC PRODUCERS
100
Total expressing support = a + b =50
Total opposing =c = 20
Total expressing opinion = a + b + c =70
Part 1 of test
Part 2 of test
Total expressing support as % of total
Total expressing support as % of total
expressing opinion:
production:
50/70 = 71% > 50% 
50/100 = 50% > 25% 
Both parts of "standing" test are satisfied
Figure 6:
Two-part "standing" test required for the initiation of an anti-dumping investigation
In the above example, both parts of the test are fulfilled.
Thus, the applicants have standing, and the
authorities can proceed with initiation. If either part of the test had not been met, however, the investigation
could not be initiated.
During the pre-initiation stage, i.e., during the period between receipt of an application and the decision
whether or not to initiate an investigation, the authorities of the importing country are required to avoid
publicizing the fact that they have received the application.
This is to prevent the mere existence of an
application from having a "chilling effect" on imports of the product concerned.
Notwithstanding this non-
publication requirement, after receiving a properly documented application and before initiating an
investigation, the authorities of the importing Member are required bilaterally to notify the government of the
exporting Member concerned.
38
V.C.
CONDUCT OF THE INVESTIGATION: INITIATION TO THE
STAGE OF IMPOSITION OF PROVISIONAL ANTIDUMPING DUTIES
The AD Agreement also sets forth detailed rules on the process of investigation. The following slide summarises
the main steps between initiation and preliminary determination:
Initiation decision;
publication of initiation
notice; notifications
issuance of
questionnaires
Receipt of
questionnaire
responses
Preliminary
determination,
application of
provisional measure,
if any
Minimum 30 days + 7 + any extensions
Minimum 60 days
TIME
Information
gathering etc.
Analysis of questionnaire
responses and other
information gathered
Investigation
continues
Rights of interested parties to see information, participate, throughout
Figure 7:
Main steps between the initiation of the anti-dumping investigation and the
preliminary determination
V.C.1. PLAN OR TIMETABLE OF AN INVESTIGATION
While not required by the AD Agreement, when an investigation is initiated, investigating authorities generally
establish and publish the "plan" or timetable of the investigation. This sets forth the various steps within an
investigation, together with dates on which each of those steps should be completed. The establishment of
such a plan is essential to complete the investigation within the 12 month period accorded by the AD
Agreement.
V.C.2. ILLUSTRATION 5
See as an example the plan from the Canadian anti-dumping and countervail investigations into the import of
Grain Corn from the United States:
INVESTIGATION SCHEDULE
Grain Corn from USA
Dumping file #: 4214-10
Dumping case #: AD/1347
Subsidy file #: 4218-20
39
Subsidy case #: CVD/115
President's Investigation Schedule
September 16, 2005
Initiation of President's dumping and subsidy investigation.
September 19, 2005
Initial compilation of CBSA exhibits available
September 30, 2005
Statement of Reasons Re: Initiation of Investigation
October 24, 2005
Importers' responses to CBSA's Request for Information due
October 24, 2005
Exporters' responses to CBSA's Request for Information due
October 24, 2005
US Government response to CBSA's Request for Information due
December 15, 2005
Preliminary Determination and/or Termination
dumping and/or subsidy investigation
December 30, 2005
Statement of Reasons
Termination) issued
(Preliminary
of
President's
Determination
and/or
In the event of a Preliminary Determination
December 15, 2005
Exporters and Importer ruling letters available
December 30, 2005
Revised import statistics available
January 16, 2006
Closing of the Record Date
January 26, 2006
Case Arguments due from all parties
February 6, 2006
Case Arguments due from all parties Re: Exhibit #120 Only
February 6, 2006
Reply submissions due from all parties in respect of case arguments
February 10, 2006
Reply submissions due from all parties Re: Exhibit #120 Only
March 15, 2006
Final Determination and/or Termination of President's dumping
and/or subsidy investigation
March 15, 2006
Exporter and importer ruling letters available
March 31, 2006
Statement of Reasons (Final Determination and/or Termination)
issued
This Investigation Schedule will be updated as necessary. Parties/counsel should monitor the
website to inform themselves of changes. Any changes which reduce the time allowed for
parties/counsel to submit information or make representations will be communicated directly to
parties/counsel.
Together with the plan, it is essential to keep a proper record of the investigation.
To ensure that a proper record is kept, it is essential that an investigating authority file all documents, either
submitted by the parties or generated internally, sequentially and cumulatively.
For instance, this could be achieved by maintaining a listing of exhibits and information such as the one below:
40
Listing of Exhibits and Information
Dumping Investigation
Grain Corn from USA
Dumping file #: 4214-10
Dumping case #: AD/1347
Placed on exhibit listing – September 19, 2005
Exhibit
Exhibit
Class
Description of Information
Non-
Non-confidential version of the complaint
Confidential.
Please note that access is provided as a courtesy only.
Type
1
Producer
therefore, this document is in the language in which it was
submitted to us.)
August 12, 2005
(Note: All information contained in the complaint is public,
as such there is no confidential version)
2
CBSA
Non-
Notice of a properly documented complaint – Embassy of
Confidential.
United States
August 17, 2005
3
CBSA
Non-
Notice of a properly documented complaint – CITT
Confidential.
August 17, 2005
(..................)
Placed on Exhibit Listing – February 4, 2006
Exhibit
Exhibit
Class
Description of Information
Non-
CBSA response to representations made on behalf of Maple
Confidential.
Leaf Foods concerning the question of standing. (See
Type
126
CBSA
exhibits #115 & #116)
February 3, 2006
127
CBSA
Non-
CBSA response to representations made on behalf of the
Confidential.
Canadian
Corn
Producers
concerning
the
question
of
standing. (See exhibits #117)
February 3, 2006
41
V.C.3. NOTICE OF INITIATION
Once the competent authority has decided to initiate an investigation, the AD Agreement requires that public
notice be given of that decision.
The AD Agreement also sets forth the minimum content requirements for the notice of initiation. These include
the name of the exporting country or countries; a description of the product involved; the basis on which
dumping is alleged in the application; a summary of the factors on which the allegation of injury is based; and
contact information and deadlines for interested parties to make their representations.
This information can be contained in the Notice of Initiation itself or in a separate report (as is the case in the
notice below).
V.C.4. ILLUSTRATION 6
See as an example, the notice initiating the Canadian anti-dumping and countervail investigations into Grain
Corn from the United States:
NOTICE OF INITIATION OF INVESTIGATION – GRAIN CORN
Ottawa, September 16, 2005
The Canada Border Services Agency (CBSA), initiated an investigation on September 16, 2005,
under the Special Import Measures Act into the alleged injurious dumping and subsidizing of grain
corn in all forms, excluding seed corn (for reproductive purposes), sweet corn, and popping corn,
originating in or exported from the United States of America. The investigation follows a complaint
filed by the Ontario Corn Producers' Association, the Fédération des producteurs de cultures
commerciales du Québec and the Manitoba Corn Growers Association, Inc.
For further clarity "grain corn in all forms" includes whole kernel corn and grain corn that has been
processed in a limited way by cracking, crushing, rolling, grinding, or flaking and includes ground
corn such as corn flour, corn grits, corn meal, corn bran, sharps and other residues, corn which is
hulled, sliced or kibbled, as well as grain corn mixed with other grains and oilseed (such as millet)
which can be separated from the grain corn after importation. The product definition also includes
white dent corn.
Additional information about this investigation is contained in a Statement of Reasons which will be
available within 15 days on the CBSA's web site at: www.cbsa.gc.ca/sima.
Contacts:
Gilbert Huneault (613) 954-7376
Ron McTiernan (613) 954-7271
Media Relations (613) 957-6500
42
V.C.5. NOTIFICATION AND TRANSMISSION OF THE APPLICATION
The AD Agreement requires the authorities of the importing Member immediately to notify the initiation of an
investigation to the Member or Members the products of which are subject to that investigation, as well as to
notify other interested parties known to the investigating authorities. These other known interested parties
could include, for instance, exporters that are mentioned in the application or otherwise known to the
investigating authority.
The AD Agreement also requires the authorities of the importing Member to provide to the known exporters
and to the authorities of the exporting Member the full non-confidential text of the written application. . In
addition, the full non-confidential text of the written application must be made available, upon request, to
other interested parties involved.
"Interested parties" are defined, for purposes of the entire AD Agreement, as including at least:

exporters, foreign producers or importers of a product subject to investigation, or a trade or business
association a majority of the members of which are producers, exporters or importers of such product;

the government of the exporting Member; and

producers of the like product in the importing Member or a trade and business association a majority of
the members of which produce the like product in the territory of the importing Member.
Members also are allowed to include other parties as interested parties.
The AD Agreement further requires that authorities provide opportunities for industrial users of the product
under investigation, and for representative consumer organizations in cases where the product is commonly
sold at the retail level, to provide information which is relevant to the investigation regarding dumping, injury
and causality.
V.C.6. ILLUSTRATION 7
See a real-life example of a letter notifying an interested party (a foreign producer or exporter) of the United
States' initiation of an investigation, and transmitting a questionnaire:
A-xxx-xxx
Investigation
Public Document
NAME
ADDRESS
Dear Sir or Madam,
I am writing to you on behalf of Import Administration, a unit of the United States Department of
Commerce. On [insert date], we initiated an investigation to determine whether merchandise
imported into the United States that you are believed to produce and/or export is being sold at
dumped prices. Dumping occurs when imported merchandise is sold in, or for export to, the United
States at less than the normal value of the merchandise; i.e., the United States price is less than
43
the price at which identical or similar merchandise is sold in a foreign market (usually the home
market of the producer and/or exporter merchandise), or less than the constructed value of the
merchandise. The product under investigation is [insert short name of product] from [insert
country]. We began the investigation based on a petition filed by [insert name(s) of the
petitioner(s)] on behalf of the United States industry producing the merchandise under
investigation.
On [insert date], the United States International Trade Commission ("the Commission")
preliminarily determined that there is a reasonable indication that imports of the product under
investigation are injuring the United States industry. We will now determine whether sales of the
subject merchandise in, or to, the United States are being dumped. If so, the Commission will
decide whether those dumped imports are injuring the United States industry. If we find that sales
are made at dumped prices, and the Commission finds that the dumped imports are a cause of
injury we will issue an anti-dumping order.
We are soliciting the information requested in the enclosed questionnaire to determine whether
subject merchandise that you produced and/or exported was in fact sold in, or to, the United
States at dumped prices. General instructions for responding to the questionnaire follow
immediately after the table of contents. We have divided the questionnaire itself into five sections,
A though E, and attached supplemental information, including a glossary of terms, in the sections
of the questionnaire. If you have not received the entire questionnaire, please contact the official in
charge immediately.
All parties are requested to respond to sections A (General Information), B (Sales in the Home
Market or to Third Countries), and C (Sales to the United States).
V.C.7. ISSUANCE OF QUESTIONNAIRES/DEADLINES
The AD Agreement requires authorities to inform interested parties in detail, as soon as possible after
initiation, as to the information which they require. Such information requests normally take the form of
questionnaires.
Typically, questionnaires intended for foreign producers and exporters request information on the prices at
which those enterprises export the product under consideration to the importing Member, as well as on the
domestic selling prices of the like product in the producers'/exporters' home market. These questionnaires
sometimes also request information on these enterprises' cost of production for the product under
consideration. The questionnaires typically are quite lengthy. While the AD Agreement only mentions explicitly
questionnaires for foreign producers and exporters, investigating authorities routinely also issue questionnaires
to other interested parties, such as the domestic industry and importers. It also is common for investigating
authorities to issue supplemental information requests, either to seek clarifications on the questionnaire
responses, or to pursue additional issues that may have arisen in the investigation.
The AD Agreement also requires that foreign producers and exporters be given at least 30 days to reply to the
questionnaire. The 30 day deadline is counted from the date of receipt of the questionnaire, which is deemed
in the AD Agreement to be one week from the date on which the questionnaire was sent.
Furthermore,
requests for extensions of the 30-day period should be granted, whenever practicable, upon cause shown.
An example of a US questionnaire can be found at http://ia.ita.doc.gov/questionnaires/questionnaires-ad.html
44
Due process rights
The AD Agreement requires that all interested parties have a full opportunity to defend their interests, and that
they be given ample opportunity to present in writing all evidence which they consider relevant.
In application of the above general principle, the AD Agreement requires that evidence presented in writing by
one interested party must be made available promptly to other interested parties participating in the
investigation. This is linked to the AD Agreement's requirement that authorities must, whenever practicable,
provide timely opportunities for all interested parties to see all information that is relevant to the presentation
of their cases, and that is used by the authorities in an anti-dumping investigation, so that they can prepare
submissions on the basis of this information. These disclosure obligations apply, for instance, to access to the
non-confidential file.
Finally, the AD Agreement requires investigating authorities to provide opportunities, upon request, for all
interested parties to meet those parties with adverse interests, in oral hearings or other formats. The AD
Agreement requires that confidential information be protected, however, as discussed below.
V.C.8. TREATMENT OF CONFIDENTIAL INFORMATION
Some information and data required in order to carry out a dumping determination is highly confidential
(e.g. costs, list of customers, pricing policies, etc.).
Given the extreme sensitivity of much of the information that they are requested to submit, interested parties
generally are very concerned to ensure that the information be protected as confidential, i.e., not accessible to
their competitors or to the public more broadly.
In fact, unless the investigating authority treats sensitive business information as confidential, an interested
party would likely refuse to submit it. The AD Agreement thus requires investigating authorities to treat such
information in confidence. This means that other interested parties will normally not be allowed to access that
information in its confidential form.
That said, however, to ensure that other parties can defend their interests, the AD Agreement requires that
the party requesting confidential treatment inter alia justify its request, and, more importantly, submit a nonconfidential summary of the information submitted in confidence. This summary must permit a reasonable
understanding of the substance of the information submitted in confidence. It also must be made available to
the other parties in the investigation.
45
V.C.9. ILLUSTRATION 8
How does this work in practice? Let's suppose that the exporter submits the following table with information
requested by the investigating authority:
Fiscal Year 2009
Fiscal Year 2010
Fiscal Year 2011
Unrelated
Related
Unrelated
Related
Unrelated
Related
Customers
Customers
Customers
Customers
Customers
Customers
56,245
0
ALL PRODUCTS
Total company turnover
150,327
0
93,334
0
Domestic Market
24,078
0
14,000
0
3,937
0
United States
18,375
0
20,533
0
34,309
0
Other Countries
57,873
0
58,800
0
17,998
0
SUBJECT PRODUCT
Turnover of subject
77,175
0
59,072
0
39,609
0
9,300
0
4,522
0
1,705
0
United States
18,375
0
20,250
0
26,757
0
Other Countries
49,500
0
34,300
0
11,146
0
product
Domestic Market
Table 3:
Submission of information requested by the investigation authority
The exporter requests confidential treatment for the above information. One way it could fulfil its obligation to
provide a non-confidential summary of the information would be to index all of the actual values to one
particular value. In the example below, all of the data are indexed to 2009 total company turnover:
Fiscal Year 2009
Fiscal Year 2010
Fiscal Year 2011
Unrelated
Related
Unrelated
Related
Unrelated
Related
Customers
Customers
Customers
Customers
Customers
Customers
ALL PRODUCTS
Total company turnover
100
0
62.1
0
37.4
0
Domestic Market
16.0
0
9.3
0
2.6
0
United States
12.2
0
13.7
0
22.8
0
Other Countries
38.5
0
39.1
0
12.0
0
SUBJECT PRODUCT
Turnover of subject
51.3
0
39.3
0
26.3
0
6.2
0
3.0
0
1.1
0
United States
12.2
0
13.5
0
17.8
0
Other countries
32.9
0
22.8
0
7.4
0
product
Domestic Market
Table 4:
Non-confidential summary
By submitting an indexed table, the submitter does not public reveal its actual turnover figures, but
nevertheless illustrates the relationships among the various values in the table, as well as the trends in the
individual indicators.
This is only one possible way to summarize confidential numerical data in a non-
confidential way, and the AD Agreement contains no precise directives on how such summarization is to be
done. Thus other approaches also are possible.
46
Furthermore, the AD Agreement recognizes that some confidential data or information simply may not be
capable of summarization (customer lists, e.g.).
In such cases, the investigating authority is under the
affirmative obligation to require a justification from the interested party submitting the information as to why
summarization is not possible.
ANALYSIS OF THE SUBMISSIONS MADE BY INTERESTED PARTIES / VERIFICATION
Once the investigating authority has received the replies to the questionnaires from the various interested
parties, it will analyze the information received to determine:

whether the product under consideration has been exported at dumped prices;

whether the domestic industry has suffered material injury or threat thereof; and

if so, whether the material injury or threat thereof is caused by the dumped imports.
The AD Agreement requires investigating authorities, during the course of an investigation, to satisfy
themselves as to the accuracy of the information supplied by interested parties upon which their findings are
based.
Typically, investigating authorities discharge this obligation by carrying out on-the-spot verifications at the
premises of the exporters, domestic industry, importers, etc. Special procedures are set forth in case an
investigating authority decides to carry out verifications in the territory of the exporting Member. On-the-spot
verifications are not, however, mandatory.
Particularly for verification of information submitted by foreign
interested parties, on-the-spot verification in a foreign country may be very costly, especially for developing
Members.
Investigating authorities thus can comply with the obligation to satisfy themselves as to the
accuracy of the information through any reasonable means, which for example could include requiring the
provision of back-up documentation showing how certain questionnaire responses were calculated, comparing
submitted data with comparable public data, etc.
FACTS AVAILABLE
Unfortunately there are cases where one or more interested parties do not fully cooperate in an investigation.
For instance, parties may not provide the information requested by an investigating authority, or they may
provide only incomplete information, or provide information after the set deadlines.
In such cases, how can an investigating authority determine the dumping margin for those exporters? The AD
Agreement contains a provision which allows an investigating authority "to fill the gap" where information is
missing due to lack of cooperation. In particular, the authority is allowed to use information from other
sources. The use of such "facts available" is however subject to strict rules developed in detail in Annex II to
the AD Agreement.
47
IMPOSITION OF PROVISIONAL MEASURES / DURATION
The AD Agreement does not require the imposition of provisional measures, but if a Member wishes to do so,
the AD Agreement sets forth certain rules. In particular, it provides that measures may only be applied if:
(i)
an investigation has been initiated in accordance with the provisions of the AD Agreement, a public notice
of initiation has been issued. and interested parties have been given adequate opportunities to submit
information and make comments;
(ii)
a preliminary affirmative determination has been made of dumping, injury and causation; and
(iii) the authorities concerned judge such measures necessary to prevent injury being caused during the
remainder of the investigation.
Provisional measures may take the form of a provisional duty or, preferably, a security in the form of a cash
deposit or bond for not more than the amount of the preliminarily -determined margin of dumping.
THE AD AGREEMENT SETS FORTH CERTAIN TIME LIMITATIONS
First, the AD Agreement provides that no provisional measure may be applied sooner than 60 days after
initiation of an investigation.
Second, the AD Agreement contains time limits for the application of provisional measures - generally four
months, with a possible extension to six months at the request of exporters.
Longer periods (six and nine
months, respectively), are allowed where the authorities examine whether an anti-dumping measure lower
than the margin of dumping would be sufficient to remove injury.
See, as an example, the EC's preliminary determination regarding the investigation on imports of Lever Arch
Mechanisms originating in China at:
http://europa.eu.int/eur-lex/lex/LexUriServ/site/en/oj/2006/l_023/l_02320060127en00130033.pdf
NOTICE OF IMPOSITION OF PROVISIONAL MEASURES / NOTIFICATION
The AD Agreement contains guidelines as to the required minimum content of a notice of imposition of
provisional measures. In particular, such a notice must include the names of the suppliers (or where
impracticable, the supplying countries); a description of the product sufficient for customs purposes; the
margins of dumping established and a full explanation of the reasons for the methodology used in the
establishment and comparison of the export price and the normal value; considerations relevant to the injury
and causation determination; and the main reasons leading to the determination. Again, this information can
be contained in the Notice itself or in a separate report (as is the case in the notice below).
48
V.C.10. ILLUSTRATION 9
See, as an example, a Canadian notice of imposition of provisional measures on imports of Grain Corn from the
United States:
GRAIN CORN – NOTICE OF PRELIMINARY DETERMINATION
OTTAWA, DECEMBER 15, 2005
On December 15, 2005, the President of the Canada Border Series Agency made a preliminary
determination of dumping and subsidizing respecting unprocessed grain corn, excluding seed corn
(for reproductive purposes), sweet corn, and popping corn, originating in or exported from the
United States of America, pursuant to subsection 38(1) of the Special Import Measures Act (SIMA).
Provisional duty will now be payable on the subject goods that are released from Customs on or
after December 15, 2005.
On the same date, the President terminated the dumping and subsidy investigation with respect to
processed grain corn from the United States of America, pursuant to paragraph 35(2)(a) of SIMA,
as a result of the decision by the Tribunal that the evidence did not disclose a reasonable indication
that the dumping or subsidizing of processed grain corn was causing or was threatening to cause
injury. Briefly stated, processed grain corn results from dry milling operations that separate or
remove constituent parts of the whole kernel corn.
For further factual information consult the Fact Sheet pertaining to this decision.
A Statement of Reasons that summarizes the information on which this decision was based and
which describes futures activities in this investigation will be available within 15 days on our Web
site at www.cbsa.gc.ca/sima/.
Contacts/Personnes-ressources:
Gilbert Huneault
(613) 954-7376
Ron McTiernan
(613) 954-7271
The AD Agreement requires that the notice imposing provisional anti-dumping measures be forwarded to the
Member or Members the products of which are subject to such determination, and to other interested parties
known to have an interest in the matter. Thus, in addition to the authorities of the exporting Member, the
investigating authority must also send the notice to exporters.
EXERCISE:
6.
How is an anti-dumping investigation begun?
49
V.D. CONDUCT OF THE INVESTIGATION: FROM THE STAGE
OF PROVISIONAL ANTI-DUMPING DUTIES TO THE FINAL
DETERMINATION
IN BRIEF
Before issuing its final determination, an investigating authority must disclose the "essential facts" under
consideration which form the basis of the decision whether or not to apply a definitive measure. Where a
provisional measure is applied, the preliminary determination and associated reports can perform this
function. Otherwise, a separate essential facts disclosure must be made. Often, following the disclosure of
essential facts, interested parties submit written comments, on the preliminary determination if there is one,
or on the other disclosure they have received.
They may request an oral hearing to address issues
pertaining to the disclosed information and/or to the preliminary determination.
In some cases, the
interested parties are allowed at this stage to present new evidence in support of their contentions.
Verifications of the information/evidence submitted at this stage of the investigation, and verification results
may form part of the disclosed "essential facts".
This process is summarized in the following slide:
Parties'
arguments and
views: written;
possible oral
hearings
Essential facts
disclosure
Verification of questionnaire
responses; other information;
further information - gathering
and analysis
Parties'
comments/argument
s on essential facts;
possible negotiation
of undertakings
Receipt and analysis of
parties comments and
arguments
Final
determination;
application of
definitive
measures, if any
Normally, within 12
months from initiation; not
more than 18
Rights of interested parties to see information, participate, throughout
Figure 8:
Stages from provisional anti-dumping duties to the final determination
50
The main steps in this part of the investigation are examined in more detail below.
IN DETAIL
Essential facts
Before a final determination is made, the AD Agreement requires investigating authorities to inform all
interested parties of the essential facts under consideration which form the basis for the decision whether to
apply definitive measures. In addition to disclosing the "essential facts", an investigating authority can for
instance provide reasons for resorting to facts available; explanations relating to all economic factors
considered relevant to the determination of injury; etc.
Notice of final determination, imposition of definitive measures; Notification
Once the final determination has been made, whether affirmative or negative, the investigating authorities
must publish a notice to that effect, and must directly provide it to the Member(s) whose products are subject
to the final determination, and to the other interested parties. The notice or separate report shall set forth in
sufficient detail the findings and conclusions reached on all issues of fact and law that the investigating
authorities consider to be material.
Where the decision has been taken to impose a definitive measure or to accept an undertaking, the authorities
must publish a notice and/or make available a separate report setting forth all of the relevant information on
the matters of fact and law and reasons which have led to the imposition of the measure or acceptance of the
undertaking. The AD Agreement contains detailed rules about the minimum content of the public notice, which
are essentially the same as those for the notice/report concerning the imposition of a provisional measure.
V.D.1. ILLUSTRATION 10
See, as an example, a Canadian notice imposing final measures on certain flooring from China and France.
SIMA – Final Determination
On May 17, 2005, pursuant to paragraph 41(1)(a) of the Special Import Measures Act (SIMA), the
President of the Canada Border Services Agency (President) made a final determination of dumping
in respect of laminate flooring in thickness ranging from 5.5mm to 13mm (other than laminate
hardwood flooring where the hardwood component exceeds 2mm in thickness) originating in or
exported from the people's Republic of China and France and a final determination of subsidizing in
respect of such product originating in or export from the People's Republic of China (China).
On the same date the President terminated the dumping investigation of the same goods
originating in or exported from Austria, Belgium, the Federal Republic of Germany and the Republic
of Poland, pursuant to paragraph 41(1)(b) of SIMA.
Today's decisions follow the preliminary determination of dumping and subsidizing made on
February 16, 2005.
The Canadian International Trade Tribunal (Tribunal) is continuing its inquiry into the question of
injury to the Canadian industry for subject good from China and France. The Tribunal will make a
51
decision by June 16, 2005. Provisional duty will continue to apply until this date for these two
countries.
Additional information about this investigation is contained in a Statement of Reasons that will be
available on the CBSA's Web site by June 1, 2005, at www.cbsa-asfc.gc.ca/sima.
Contacts:
Roger Lyons
(613) 954-7342
Blair Hynes
(613) 954-1641
V.E.
APPLICATION OF DEFINITIVE ANTI-DUMPING
MEASURES
IMPOSITION AND COLLECTION OF ANTI-DUMPING DUTIES
In accordance with the AD Agreement, no anti-dumping measure can be imposed if:

there is no dumping, injury to the domestic industry and/or a causal relationship between the two;

the margin of dumping calculated is de minimis (less than 2%); and

where the volume of imports is negligible, the investigation must also be terminated. Imports must
normally be regarded as negligible if the volume of dumped imports from a particular country is found
to account for less than 3 per cent of imports of the like product in the importing Member. However,
where countries which individually account for less than 3 per cent of the imports of the like product in
the importing Member collectively account for more than 7 per cent of imports of the like product in the
importing Member, then the investigating authority may consider those imports not to be negligible.
Where the above conditions are fulfilled, and the importing Member decides to apply an anti-dumping duty, the
AD Agreement contains specific rules regarding its collection. The basic principle is that the amount of any
anti-dumping duty must not exceed the margin of dumping established in accordance with the AD Agreement.
The AD Agreement contains detailed rules to ensure that any excess duties paid are promptly refunded.
The AD Agreement further indicates that it is desirable that the imposition of measures be "permissive" in the
territory of Members, that is, that Members have discretion not to impose measures, or not to impose
measures up to the full amount of the dumping margin, even where all of the requirements for doing so are
met. In many cases, Members deciding not to impose a measure or to impose a duty below the margin of
dumping do so to protect the interests of users of the product under consideration or of final consumers.
In this context, the AD Agreement also encourages the use of a "lesser duty" rule. Under such a rule, an antidumping authority imposes a measure at a level lower than the margin of dumping if it finds that this lower
level would be adequate to remove the injury to the domestic industry.
52
RETROACTIVE APPLICATION OF DUTIES
The normal rule for application of definitive duties is that such duties shall only be collected on imports made
after the effective date of the final determination.
There are two exceptions to this general rule, providing for the retroactive collection of definitive duties (that
is, for the collection of definitive duties before the effective date of the final determination).
In no case,
however, can definitive anti-dumping duties be collected on imports that took place before the initiation of an
investigation.

The first such situation involves the collection of definitive anti-dumping duties for the period during
which provisional measures were applied (for all practical purposes "converting" the provisional
measure into a definitive measure). For this to be permissible, the injury finding generally must be
based on present material injury, unless a determination is made that in the absence of a provisional
measure a threat of material injury would have become present material injury. (No retroactivity is
permitted in case of a material retardation finding, however.)

The second such situation involves the collection of definitive duties up to 90 days prior to the date of
application of provisional measures. This is only permissible where there is a history of inuurious
dumping or the importer was or should have been aware that injurious dumping was taking place, and
where the injury is caused by massive dumped imports in a short period.
INDIVIDUAL MARGINS OF DUMPING, SAMPLING, "ALL OTHERS" RATE
The AD Agreement generally requires investigating authorities to calculate an individual margin of dumping for
each known exporter or producer of the product under consideration.
In some cases, however, the number of producers, exporters, importers or types of products is so large as to
make individual margin calculations impracticable. Where this is the case, the AD Agreement permits limiting
the examination (for purposes of calculating dumping margins) either to a reasonable number of interested
parties or products by using statistically valid sample, or to the largest percentage of the volume of the
investigated exports that can reasonably be investigated. Where the examination is so limited, an exporter or
producer that was not included in the sample nevertheless must be given an individual margin of dumping if it
supplies the necessary information during the course of the investigation, unless the number of such exporters
or producers is so large that individual examinations would be unduly burdensome to the authorities and would
prevent the timely completion of the investigation.
Where a limited examination is used, the authorities must calculate an individual dumping margin for each
examined producer or exporter.
For the non-examined producers or exporters ("all others"), the maximum dumping margin that can be applied
is either the weighted average margin of dumping for the producers or exporters that were examined; or,
where liability for anti-dumping duties is calculated on the basis of prospective normal value, the difference
between the weighted average normal value of the selected exporters or producers, and the export prices of
exporters or producers not individually examined. In making these "all others" calculations, zero or de minimis
margins must be disregarded, as must any margins established on the basis of "facts available".
53
NEW-SHIPPER REVIEW
Exporters or producers that did not export the product to the importing Member during the period of
investigation (i.e., "new shippers") have the right to a review to obtain individual margins of dumping.
However, to exercise this right, these exporters or producers must show that they are not related to any of the
exporters or producers subject to the anti-dumping duties. New shipper reviews are to be initiated and carried
out on an accelerated basis, compared with normal duty assessment and review proceedings.
No anti-
dumping duties can be levied on imports from such exporters or producers while the review is being carried
out, although the authorities are entitled to withhold appraisement or to require a guarantee to ensure
payment of duties retroactive to the initation of the review if dumping is found. .
TIP
See, as an example of a new-shipper review, the EC determination in Polyethylene Terephtalate (PET) from
China at:
http://europa.eu.int/eur-lex/lex/LexUriServ/site/en/oj/2005/l_345/l_34520051228en00110014.pdf
DUTY COLLECTION SYSTEMS
Pursuant to the AD Agreement, importing Members can assess and collect anti-dumping duties on either a
"prospective" or "retrospective" basis. Each Member using anti-dumping measures should choose one or the
other of these systems, and establish the necessary domestic procedures to implement it.
Under a "prospective" duty assessment system, the margin of dumping found in the investigation is the basis
for the definitive assessment of anti-dumping duties going forward, unless and until a review establishes that
the margin of dumping has changed. An importer at any time can request a refund where it believes that its
actual margin of dumping is lower than that being used for duty assessment.
Such reviews should be
completed within 12 months, and in no case more than 18 months, after the request is lodged. Any refunds
normally should be made within 90 days.
Under a "retrospective" duty assessment system, the final margin of dumping and thus the final amount of
liability for anti-dumping duties is only determined sometime after the imports have entered.
Thus the
amounts collected at the border are in the nature of deposits or guarantees, and the actual calculations are
made in a review conducted upon request. Where it is determined in such a review that the duties collected
are more than the actual margin of dumping, the excess is to be refunded promptly, normally within 90 days.
PRICE UNDERTAKINGS
The AD Agreement contains rules on the offering and acceptance of price undertakings, in lieu of the imposition
of anti-dumping duties. It establishes the principle that any exporter may enter into an undertaking with the
authorities of the importing Member (not the domestic industry in the importing member!), to revise its prices,
or to cease exports at dumped prices, as a way to settle an investigation.
If an undertaking is accepted,
therefore, anti-dumping duties cannot be levied on the imports that it covers for as long as it stays in place.
The AD Agreement provides that any price increases pursuant to an undertaking must not be higher than
necessary to eliminate the margin of dumping. In other words, price increases are limited by the margin of
dumping found. While this is an absolute limit, the AD Agreement does not impede an investigating authority
from accepting an undertaking for price increases below the amount of the dumping.
54
TIP
See, as an example, an undertaking granted by the EC to some exporters in an investigation concerning
imports of Grain Oriented Flat-Rolled Products of Silicon-Electrical Steel originating in the US and Russia:
http://europa.eu.int/eur-lex/lex/LexUriServ/site/en/oj/2005/l_223/l_22320050827en00420043.pdf
An undertaking may be withdrawn where a breach is found. In that case, anti-dumping duties would normally
begin to apply, to replace the withdrawn undertaking.
TIP
See, as an example, the withdrawal by the EC of an undertaking offered in connection with the anti-dumping
proceeding concerning imports of Steel Ropes and Cables originating in India at:
http://europa.eu.int/eur-lex/lex/LexUriServ/site/en/oj/2006/l_022/l_02220060126en00540059.pdf
DURATION OF ANTI-DUMPING MEASURES
The AD Agreement provides that normally, any measure (i.e. duty or price undertaking) must be terminated on
a date not later than 5 years from its imposition, or from the date of the most recent expiry ("sunset") review
or, if it has covered both dumping and injury, the most recent changed circumstances review. Some Members,
however, apply measures for shorter periods of time.
EXPIRY OR "SUNSET" REVIEW
As stated above, anti-dumping measures (not only duties but also price undertakings) generally must expire no
later than 5 years from their imposition. The AD Agreement allows, however, a departure from this general
principle where, as a result of a review investigation initiated prior to expiry of the measure (a so-called
"sunset" review), an investigating authority establishes that the expiry of the measure would be likely to lead
to continuation or recurrence of dumping and injury.
A mere possibility that the dumping or injury would be likely to continue or recur is not sufficient for the
extension of the application of the anti-dumping measure beyond the 5 year limit.
There is no limitation in the AD Agreement on the number of times a measure can be extended through sunset
reviews, nor an overall maximum period of application for an anti-dumping measure. Indeed, there are a few
measures that have been maintained in force for 10 or 20 years or longer, via a series of reviews.
TIP
See, as an example of a sunset review, the EC determination in Steel Ropes and Cables from China, India,
South Africa and Ukraine at:
http://europa.eu.int/eur-lex/lex/LexUriServ/site/en/oj/2005/l_299/l_29920051116en00010022.pdf
55
CHANGED CIRCUMSTANCES REVIEW
Following the imposition of anti-dumping measures, the circumstances on the basis of which the original
measure was imposed may change. For instance, the normal value may decrease, or the exporter may cease
to export to the country imposing the measure. As a consequence of such changes, the dumping margin might
decrease or disappear altogether. Or the domestic industry may stop producing the good in question.
Bearing in mind such possibilities, the AD Agreement requires investigating authorities to review the need for
the continued imposition of measures, where warranted, on their own initiative (e.g., where they have
information of possible changes that would affect the need for the measure), or based on a request from an
interested party substantiated by positive information, so long as in the latter case a reasonable period has
elapsed since the imposition of the measure. In such a review, the authorities examine whether the continued
imposition of the duty is necessary to offset dumping, whether the injury would be likely to continue or recur if
the duty were removed or varied, or both. If in the review the authorities conclude that the anti-dumping
measure is no longer warranted, it must be repealed immediately. Another possible outcome of such a review
is that while the measure may be continued in force, its level may be adjusted.
TIP
See, as an example of a change-of-circumstances review, the determination of New Zealand in Galvanised
Wire from Malaysia at: http://www.med.govt.nz/buslt/trade_rem/galvan-wire-mal-reass/final/final.pdf
JUDICIAL REVIEW (APPEAL) BEFORE DOMESTIC TRIBUNALS
The AD Agreement requires Members that have promulgated anti-dumping legislation to maintain judicial,
arbitral or administrative tribunals, or other procedures, for the purpose of reviewing, or hearing appeals of,
administrative actions relating to final determinations and to reviews of determinations. These tribunals must
be independent from the investigating authorities.
V.E.1. ILLUSTRATION 11
See, as an example, an appeal before Canada's Federal Court:
OTTAWA, June 24, 2005
Notice of Appeal – Laminate Flooring
Concerning the final determination of dumping of certain laminate flooring from the
people's Republic of China and France, the final determination of subsidization of such
product from the people's Republic of China and the termination of the certain laminate
flooring investigation concerning Austria, Belgium, the Federal Republic of Germany,
and the Republic of Poland.
On June 14, 2005, pursuant to section 96.1 of the Special Import Measures Act (SIMA), Uniboard
Surfaces Inc. of Laval, Quebec filed a notice of application with the Federal Court to appeal the
Canada border Services Agency's final determination of dumping of certain laminate flooring from
56
the People's Republic of China and France, the final determination of subsidization of such
product from China and the termination of the certain laminate flooring investigation concerning
Austria, Belgium, the Germany, and Poland.
LEGAL REVIEW IN WTO DISPUTE SETTLEMENT
Legal review in the WTO is subject to the general provisions of the Dispute Settlement Understanding, except
where otherwise stated in the AD Agreement. The AD Agreement contains quite detailed rules on consultations
and on the standard of review applicable to panels examining claims under the AD Agreement. Thus, the
investigating authorities' determinations on factual matters should be accepted by a panel so long as the
investigating authorities' establishment of the facts was proper, and the evaluation of those facts was unbiased
and objective. Furthermore, where there is more than one permissible interpretation of a given provision of
the AD Agreement, if the measure at issue is in conformity with one of those interpretations it should be
accepted by a panel.
In addition, the AD Agreement requires panels to limit their examination to the information that was actually
before the investigating authority at the time the challenged measures were adopted.
V.E.2. ILLUSTRATION 12
See, as an example, one of the most recent requests for consultations in DS335, United States - Anti-dumping
Measure on Shrimp from Ecuador:
WORLD TRADE
ORGANIZATION
WT/DS335/1
G/L/762
G7ADP/D63/1
21 November 2005
(05-5489)
Original: English
1.
United States – anti-dumping measure on shrimp from Ecuador
Request for Consultations by Ecuador
The following communication, dated 17 November 2005, from the delegation of Ecuador to the
delegation of the United States and to the Chairman of the Dispute Settlement Body, is circulated in a
accordance with Article 4.4 of the DSU.
____________________________
My authorities have asked me to request consultations with the Government of the United States
under Article 4 of the Understanding on Rules and Procedures Governing the Settlement of Disputes
(DSU), Article XXII of the General Agreement on Tariffs and Trade 1994 (GATT 1994) and Article 17 of the
Agreement on Implementation of Article VI of GATT 1994 (Anti-Dumping Agreement) Concerning the final
affirmative determination of sales at less than fair value with respect to certain frozen warm water shrimp
from Ecuador (Inv. No. A-331-802) published by the United States Department of Commerce (DOC) on
23 December 2004 (69 Fed. Reg. 76913). This request for consultations includes two additional
measures: the amended final determination of sales at less than fair value that the DOC published on 1
February 2005 and the accompanying anti-dumping duty order (70 Fed. Reg. 5156).
Specifically, the Government of Ecuador requests consultations on the DOC's practice of "zeroing"
negative anti-dumping margins. Through this practice, the SOC treats transactions with negative dumping
57
margins as having margins equal to zero in determining weighted average anti-dumping margins in an
anti-dumping investigation. The DOC applied its practice of zeroing in its investigation of certain frozen
warm water shrimp from Ecuador. Had the DOC not applied this practice, the two named Ecuadorian
respondents and the "all others" for which it determined anti-dumping margins above the de minimis level
would have been found not to have been dumping and, as a result, the DOC would not have issued an
affirmative final determination, an amended affirmative final determination, or an anti-dumping duty
order. Instead, the DOC would have calculated de minimis margins for the two named respondents and
for "all others" in Ecuador.
The Government of Ecuador considers the DOC's use of its practice of zeroing in its final
determination, amended final determination and anti-dumping duty order to violate Article VI of the
GATT 1994 and Articles 1, 2.1, 22, 2.4, 24.2, 5.8, 6.10, 9.2, 9.3, 9.4, and 18.1 of the Anti-dumping
Agreement. Zeroing resulted in unfair and improper comparisons between the export price and the normal
value, resulting in artificial and inflated margins of dumping where none existed.
The zeroing methodology that the DOC used in its anti-dumping investigation of certain frozen
warm water shrimp from Ecuador is virtually identical to the methodology that was held to be inconsistent
with the Anti-Dumping Agreement in European Communities – Anti-Dumping Duties on Imports of CottonType Bed Linen from India (Panel Report, WT/DS141/R, and Appellate Body Report, WT/DS141/AB/R,
adopted 12 March 2001, and also in United States – Final Dumping Determination on softwood Lumber
from Canada (Panel Report, WT/DS264/R, and Appellate Body Report, WT/DS264/AB/R, adopted
31 August 2004).
Ecuador reserves the right to raise additional claims and legal matters concerning the DOC's
zeroing practice during the course of consultations.
I look forward to receiving your reply to this request and, in accordance with Article 4.3 of the
DSU, to selecting a mutually acceptable date for holding consultation. Ecuador welcomes any suggestion
that the United States may have concerning the date and venue for these consultations.
IF YOU WANT TO KNOW MORE
Cases which have resulted in decisions by panels and/or the Appellate Body can be found by clicking here.
EXERCISES:
7.
How long may an anti-dumping measure remain in place?
8.
What is the maximum level of anti-dumping duty that may be applied on dumped imports that are
causing injury to the domestic industry producing the like product?
58
VI.
ALL YOU WANTED TO KNOW ABOUT THE
COMMITTEE ON ANTI-DUMPING PRACTICES
The AD Agreement establishes a Committee on Anti-dumping Practices ("the AD Committee"). This Committee
is composed of representatives of each Member.
The Committee is tasked with reviewing all notifications
related to anti-dumping, and to otherwise monitoring the implementation of the AD Agreement.
Pursuant to the AD Agreement, the AD Committee meets at least twice a year in regular session. In addition,
there may be special meetings to address particular issues. Regular meetings provide Members the opportunity
to discuss any matters relating to the AD Agreement. See, as an example, the draft agenda for the
October 2005 meeting:
WTO/AIR/2703
21 October 2005
SUBJECT: Committee on Anti-Dumping Practices – Regular meeting to be held on 31 October 2005
1.
The Committee on Anti-Dumping practices will hold a regular meeting commencing on Monday,
31 October 2005 in the centre William Rappard immediately following the conclusion of the
meeting of the working group on implementation (see WTO/AIR/2702).
2.
The following items are proposed for discussion in the regular session:
A.
Albania – review of new legislative notification (G/ADP/N/1/ALB/1)
B.
Turkey – review of new legislative notification (G/ADP/N/1/TUR/3/SUPPL.2G/SCM/N/1/TUR/3/SUPPL.2)
C.
Semi-annual reports of anti-dumping actions
- G/ADP/N/132 – reports received to date
- Other semi-annual reports not previously reviewed
D.
Preliminary and final anti-dumping actions (G/ADP/N/129-131 and G/ADP/n/133-136)
E.
Transitional review under paragraph 18 of the protocol of Accession of the people's Republic
of China to the World Trade Organization.
3.
F.
Chairperson's report on meeting of working group on implementation
G.
Other Business
H.
Date of next regular meeting
I.
Annual report to the council for Trade in Goods (Articles 18.6)
Due to the volume of documentation involved, additional copies of the notifications of
Legislation to be discussed under agenda items A-F will not be available from the
documents centre before the meeting. Delegations are, therefore, requested to bring
copies of the relevant documents to the meeting.
4.
Members of the WTO, other governments with observer status international government with
observer status (IMF, UNCTAD, World Bank), and International Intergovernmental Organizations
invited to attend this meeting as observers (ACP Group, OECD) which wish to be represented at
this meeting are requested to inform the secretariat of the names of their representatives as soon
as possible.
Pascal Lamy
59
Typically, as in the above draft agenda, a regular meeting of the Committee starts with a review of several
types of notifications required from Members.

First, legislative notifications. These are notifications of the full text of existing domestic laws and
regulations in the area of anti-dumping, or any changes to previously notified laws and regulation.

Second, notifications of semi-annual reports of any anti-dumping actions taken within the
preceding six months.

Finally, notifications of preliminary and final anti-dumping actions. Participants will see more
detailed discussions on the notifications below.
These notifications must have been translated into the three WTO working languages and circulated to
Members prior to the meeting. During the review exercise, Members have the opportunity to raise questions
concerning the operation of national anti-dumping laws and regulations, the application of particular measures,
and the consistency of national practice with the AD Agreement.
The next item in the above agenda is the transitional review under paragraph 18 of China's Protocol of
Accession to the WTO. This is a special procedure that was conducted once a year for the first 10 years of
China's WTO membership. 2011 was the final transitional review of China.
At regular meetings, the Chairman generally reports on the activities of the Committee's two subsidiary bodies:
the Working Group on Implementation and the Informal Group on Anti-Circumvention. (See below) These two
Groups generally meet immediately before the regular meetings of the Committee.
Under "Other Business", Members generally raise specific issues such as concerns over other Members'
investigations and/or measures.
Finally, once a year, at its autumn regular meeting, the Committee prepares and sends a factual report of its
activities to the Council for Trade in Goods.
The Working Group on Implementation, which is open to all Members of the WTO, constitutes a forum primarily
aimed at discussing technical issues regarding methodologies and practices used by different Members in
making dumping and injury determinations. The Working Group also considers procedural matters. The Group
works on the basis of submissions by Members, and seeks to the extent possible to develop non-binding
recommendations as to "best practices" in particular areas. Over the years, the Working Group has agreed on
a number of such recommendations which have then been approved by the Committee.
The Informal Group on Anti-Circumvention discusses the following three topics: "What constitutes
circumvention?" (topic 1), "What is being done by Members confronted with what they consider to be
Circumvention?" (topic 2), and "To what extent can circumvention be dealt with under relevant WTO rules?"
(topic 3). The Informal Group, which was constituted pursuant to the Uruguay Round Ministerial Decision on
Anti-Circumvention, currently meets once a year, and generally works on the basis of written submissions by
Members.
60
VII. LAST BUT NOT LEAST: NOTIFICATION
REQUIREMENTS
The AD Agreement contains a number of notification obligations.

First, and foremost, the AD Agreement requires full transparency in respect of Members' laws,
regulations and procedures in the anti-dumping area. Thus, Members must notify the Committee of
their existing domestic laws and regulations in the area of anti-dumping, or any changes to previously
notified laws and regulations as soon as possible. During the Committee review of these notifications,
Members can raise questions and concerns that they may have as to the consistency with the AD
Agreement of particular provisions of the domestic laws and regulations of the notifying Members. All
Members are required to submit a legislative notification, even where they have no such laws or
regulations (in which case the notification simply states that fact).

Second, the AD Agreement requires Members to report without delay all preliminary or final actions
taken with respect to anti-dumping measures. The Committee has adopted guidelines (G/ADP/2/Rev.2)
for the minimum information to be provided. The format also reflects a consensus among Members
that at least initiations, preliminary determinations, imposition of provisional measures, final
determinations, and imposition of definitive measures, are to be notified in this context. A number of
Members notify other types of actions as well and many Members provide the full text of their
determinations, rather than creating a specific minimum information notification.

Third, the AD Agreement also requires the submission of semi-annual reports of any anti-dumping
actions taken within the preceding six months. A request for these notifications is circulated by the
Secretariat in January and July of each year. A report is due in February of each year covering actions
taken during the period 1 July through 31 December of the previous year, and a report is due in August
of each year covering actions taken during the period 1 January through 30 June of the current year.
The Committee has adopted a format and guidelines (G/ADP/1/Rev.1) for semi-annual reports of
actions taken. All Members must submit a semi-annual report, even if they have not taken any such
action during the reporting period. In such cases, simple nil notifications are provided.

Finally, the AD Agreement requires Members to notify the Committee regarding their authorities
competent to initiate and conduct anti-dumping investigations. All Members with such authorities must
notify the Committee of the name, address, telephone and fax number, and e-mail address (if
applicable) of those authorities, and thereafter must update or correct the submitted information as
necessary.
EXERCISES:
9.
What are the functions of the Committee on Anti-dumping Practices?
61
VIII. SUMMARY
ANTI-DUMPING
Anti-dumping refers to offsetting, with a border measure, dumping that has been found injurious to the
domestic industry. (Dumping is where a given producer or exporter exports a product to another country at
a price lower than the producer or exporter that normally charges in its own home market).
WTO rules do not pass judgement on the practice of dumping; they do however impose disciplines on antidumping measures through GATT Article VI and in the Anti-dumping Agreement.
Accordingly, a Member can impose specific anti-dumping duty on imports from a particular source, in
addition to import tariffs, when the importing Member fulfils the requisite substantive and procedural
requirements.
On the substantive side, the following three criteria must be demonstrated:

dumping is occurring;

the domestic industry producing the like product in the importing country is suffering material injury
or threat thereof; and

there is a causal link between the two.
Investigations have to be conducted to determine the margin of dumping and consequently define the level
of the anti-dumping duty:

The AD Agreement contains detailed procedural requirements on a number of issues, which are
applicable at different stages of the anti-dumping proceeding. Members must at a minimum comply
with the procedural rules laid out in the AD Agreement.

Importantly, the AD Agreement sets out notification requirements that must be adhered to for the
sake of transparency.
62
PROPOSED ANSWERS:
1.
The AD Agreement defines dumping as the sale of a product for export at a price below its "normal
value". This definition entails a comparison between two prices, the export price and the "normal value",
in order to determine if a product is dumped. Normal value is usually the domestic price of the product in
the exporting country. If this price cannot be used for comparison purposes, normal value may be
calculated on the basis of the price of the product when sold to a third country, or as a constructed value
including per unit fixed and variable costs plus a reasonable amount for profits.
It is important to point out that dumping is not the sale of a product for export at a price below that
charged by domestic producers in the importing country. This is price undercutting. The prices charged by
the producers in the importing country are not relevant for determining whether an imported product is
dumped. The question of price undercutting is, however, among the relevant factors to be considered in
determining whether the domestic industry is injured by dumped imports.
2.
To have the right to apply an anti-dumping measure, a Member must make determinations of the
existence of dumping, injury to the domestic industry (understood as material injury or threat thereof, or
material retardation of the establishment of an industry), and a causal link between the dumping and the
injury. All three elements must be determined via an investigation carried out by the authorities of the
importing Member, in accordance with the procedural rules set out in the AD Agreement.
3.
The dumping margin is the difference between the export price and the normal value. The AD Agreement
sets forth rules for calculating the export price (the price of the allegedly dumped product in the importing
country) and the normal value (usually the price of the allegedly dumped product in the exporting
country). Among the requirements is that the comparison of the two prices must be "fair", and the AD
Agreement specifies some of the elements of a fair comparison: the two prices must be at the same level
of trade, normally the ex-factory level, and must represent sales at as nearly the same time as possible.
The preferred methodologies for calculating the dumping margin are either to compare the weighted
average normal value to the weighted average export price, or to calculate dumping margins on a
transaction-to-transaction basis.
Where the investigated product encompasses more than one sub-
product or "model", any negative dumping margins (i.e., where the normal value is below the export
price) on a given model must be given their full (negative) value in calculating the overall weighted
average margin of dumping for all of the models together. That is, negative margins cannot be treated as
"zero" dumping (i.e, they cannot be "zeroed"). The dumping margin is usually expressed as a percentage
of the export price. For example, if the normal value is 100, and the export price is 80, the difference is
20, and the dumping margin would usually be expressed as 25% (i.e., (20 ÷ 80) * 100).
Before comparing the export price and the normal value to determine the dumping margin, AD
Agreement requires that "due allowance" must be made for any differences between export price and
normal value that affect price comparability, for example, differences in physical characteristics, sales
volume, terms of sale, and taxation. Due allowances can be made by adjusting either the export price or
the normal value or both to account for the particular differences in question before the two prices are
compared.
63
4.
The AD Agreement leaves a great deal of discretion to the investigating authorities as to how the question
of injury to the domestic industry is to be analyzed. That said, the AD Agreement sets out a series of
mandatory factors to be considered in the analysis of the impact of dumped imports on the domestic
industry, including actual and potential decline in sales, profits, output, market share, productivity, return
on investments, or utilization of capacity; factors affecting domestic prices; the magnitude of the margin
of dumping; actual and potential negative effects on cash flow, inventories employment, wages, growth,
ability to raise capital or investments.
The list is not exhaustive, and in a given case no one or several of the factors necessarily give decisive
guidance. Thus, all of these factors must be examined in every case, along with any other factors that
may be relevant to that particular case. Furthermore, determinations of threat of material injury must
consider all of the foregoing factors, and there needs to be a finding based on facts, not speculation or
conjecture, that a change of circumstances in which dumping would cause injury must be clearly foreseen
and imminent (for instance a significant increase in the rate of dumped imports, spare capacity in the
exporting country, etc.).
5.
The AD Agreement requires that on the basis of the examination of its listed factors regarding the
condition of the industry and the impact of the dumped imports, it be demonstrated that the dumped
imports are, through the effects of dumping, causing injury.
The AD Agreement further requires that
injury caused by factors other than dumped imports must not be attributed to those imports.
The
possible "other factors" listed in the AD Agreement in this context are: imports at non-dumped prices,
contraction in demand or changes in the pattern of consumption, developments in technology, trade
restrictive practices or competition by other producers, and the productivity of the domestic industry. The
AD Agreement however does not address exactly how the causal link between the imports and the injury
is to be established, or how non-attribution to other factors is to be ensured. Based on WTO dispute
settlement, we know that an affirmative, genuine and substantial relationship of cause and effect must be
established between the dumped imports and the injury, and we also know that the effects of the factors
other than dumped imports must be separated and distinguished from those of the dumped imports to
ensure that causation is not wrongly attributed to those imports. In practice, Members rely on a range of
methodologies to address these issues, and no one methodology is required by the AD Agreement. The
important thing is for the investigating authority, in its reports and other documents setting forth the
determination of injury and causation, to fully explain and justify, on the basis of positive evidence from
the record, how the determination was reached.
6.
An anti-dumping investigation is begun on the basis of a decision to initiate by the investigating
authorities of the importing Member. Generally, such a decision is taken after the receipt, and on the
basis, of a written application filed by or on behalf of the domestic industry producing the like product. In
exceptional cases, however, the government of the importing Member can initiate an investigation
without an application having been filed. Importantly, the AD Agreement contains a two-part "standing"
test, which the investigating authority must conduct before proceeding to initiate, to check whether the
applicant is representative of the domestic industry. In addition, in general the investigating authority
must review the accuracy and adequacy of the information contained in the application, to determine
whether that information provides enough evidence of dumping, injury and causation to constitute a
sufficient basis for initiating.
64
7.
The general principle is that an anti-dumping measure should remain in force only for as long as, and to
the extent necessary, to counteract dumping which is causing injury. In addition, the AD Agreement
establishes a specific time-limit, five years, at the end of which a measure should expire. The importing
Member may extend the period of imposition beyond five years if it conducts a review before the end of
the five-year period, and determines in that review that the elimination of the measure would be likely to
lead to the continuation or recurrence of dumping and injury.
8.
An anti-dumping duty can be applied up to, but not in excess of, the full amount of the margin of
dumping. That is, the level of anti-dumping duties cannot exceed the amount of the difference (normally
expressed as a percentage of the export price) between the normal value of the product and the export
price to the Member applying the AD duty.
A Member of course is free to apply a lower duty if it so
wishes, or to apply no duty at all.
For instance, if shoes are sold at $10.00 per pair in the home market of the exporter, and the same shoes
are exported to the importing Member at $8.00 per pair, the margin of dumping for such shoes, and thus
the maximum anti-dumping duty that the importing Member could apply, would be $2.00 per pair
or 25%.
9.
The Committee on Anti-dumping Practices ("the AD Committee") is generally responsible for overseeing
Members' implementation of the AD Agreement, and the Agreement's functioning. In this respect, one of
the AD Committee's main functions is to receive and review the notifications submitted by Members under
the AD Agreement.
actions taken.
These notifications of anti-dumping legislation, and notifications of anti-dumping
The AD Committee also has two subsidiary bodies.
The Informal Group on Anti-
Circumvention discusses issues arising under the Uruguay Round Ministerial Decision on AntiCircumvention.
their
The Working Group on Implementation offers a forum where Members can exchange
experiences
in
implementing
particular
provisions
of
the
AD
Agreement,
and
develops
recommendations as to certain best practices in the conduct of investigations and application of
measures.
65
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