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TWN Info Service on WTO and Trade Issues  (Feb08/02)

2 February 2008


Please see below an article on negotiations on rules in the WTO.

This article was published in the SUNS of 28 Jan 2008.  Any reproduction requires the permission of SUNS (sunstwn@bluewin.ch)

Best regards
Martin Khor
(TWN)


Trade: Differences over anti-dumping issues in Rules Chair's text
Published in SUNS #6401 dated 28 January 2008

Geneva, 25 Jan (Kanaga Raja) -- Differences of views have emerged among WTO members during consultations this week over various elements of anti-dumping provisions outlined by the Chair of the Negotiating Group on Rules in his first draft negotiating text.

The Negotiating Group on Friday held its first informal meeting of the new year which was devoted to the issue of anti-dumping.

At the informal meeting, Chairman Ambassador Guillermo Valles Galmes of Uruguay reported on his consultations during the week on the issues in his text that had raised the most concerns among members at his last informal meeting in December.

(Members held a first reading of the Chair's draft negotiating text at an informal meeting last December, at which the "zeroing" provisions outlined by the Chair in the draft text were roundly criticized by an overwhelming number of countries - see SUNS #6386 dated 13 December 2007.

(The practice of "zeroing" in anti-dumping investigations for calculating the dumping margins have been consistently held to be illegal by WTO panels and the Appellate Body. The US, the main, if not currently the only exponent of this concept, wants the rules to be changed, in effect to reverse the Appellate Body rulings and enable the US to continue the practice. The Guillermo draft negotiating text has provisions to enable "zeroing" in some cases.)

Presenting his report Friday, the Chair said that on the issue of "sunset reviews", the key element in the discussions was his proposed 10-year automatic termination of an anti-dumping measure.

Some delegations supported this proposal but certain members wanted the period to be shortened to 8 or to 5 years, while other delegations rejected the proposed text.

According to trade officials, the Chair said that there was also sharp division on the proposed text on "anti-circumvention", with some delegations saying that this should not be included at all. Others considered that rules were desirable in this area but that the Chair's text allowed too much discretion to investigating authorities.

Regarding the issue of "public interest", delegations were sharply divided on the desirability of the proposed text. Some were concerned that it could impinge on national sovereignty, and that the procedures were costly and time-consuming. Others welcomed the text but wanted to make this mandatory.

On the subject of public interest, trade officials said that many delegations reiterated their desire to include a provision on making the lesser-duty rule mandatory.

There were also differences of views on the issues of "causation" and "product under consideration".

On the controversial issue of "zeroing", a number of delegations insisted that the Chair's text was unacceptable and had proposed that zeroing should be prohibited in all cases and under all methodologies.

According to trade officials, other delegations said that the text went too far but that zeroing might be allowed in a limited context, such as in targeted dumping or duty collection. Another view was that the restoration of zeroing was necessary to restore the status quo.

Ambassador Valles Galmes said that it was obvious that there had been no significant signs of convergence.

There had been many criticisms about the lack of balance in the text but that he had heard very few ideas during the week about an alternative balance that could facilitate convergence, said the Chair.

Meanwhile, Kenya urged the Negotiating Group to consider its previous proposal (TN/RL/GEN/143, dated 27 June 2006), which highlights problems encountered by developing countries in implementing the Anti-Dumping Agreement.

It said that an inadequate legal framework in African countries has hampered investigation of dumping complaints from local producers, thus depriving them of the rights under the WTO.

According to trade officials, Kenya expressed disappointment that the Chair's text did not fully take into account its proposal.

The Kenyan proposal seeks the extension of Special and Differential Treatment to developing countries to facilitate the initiation of investigations for the application of anti-dumping and countervailing measures, as well as for the adoption of an Understanding or a Decision identifying and supporting technical assistance needs of developing countries for the building up of technical capacities for the application of trade remedy laws.

Kenya has proposed that special and differential treatment should be extended to developing countries by:

-- Clarifying the relevant provisions in the Agreement on Anti-Dumping Practices (ADP) and Agreement on Subsidies and Countervailing Measures (SCM) to recognize that the governments of developing countries may have to assist their affected industries and agricultural producers in bringing cases before the investigating authorities, where they consider that there are reasonable grounds to believe that increased dumped or subsidized imports are causing injury to the domestic industry; and

-- Adopting a Decision or an Understanding under the provisions of the two Agreements specifying the technical assistance needs of developing countries for the implementation of their rules.

The Kenyan paper proposes the clarification of provisions contained in Art. 5 of the ADP Agreement and Art. 11 of the SCM Agreement.

On the adoption of an Understanding or a Decision on Technical Assistance, the Kenyan proposal said that both Doha and Hong Kong Ministerial Declarations emphasise the importance of adopting programmes for providing aid for trade which focus on the needs of the beneficiary countries and reflect their priorities.

Taking into account this mandate provided by the two Declarations, it is suggested that a Decision or Understanding should be adopted, as an integral part of the ADP and SCM Agreements identifying the areas in which assistance may have to be provided for enhancing the technical capacities of developing countries for the implementation of the rules of the Agreements on ADP and SCM.

Some of the areas in which assistance may be needed are:

-- Establishment of legal and institutional framework that is needed for the application of anti-dumping and countervailing measures to countries which have not been able to establish such framework and for training of personnel in undertaking investigations according to the procedures prescribed by the two Agreements;

-- Establishment of mechanisms or the surveillance of imports of products that are alleged to be causing injury to domestic manufacturing industries or agricultural producers with a view to assisting them in collecting evidence on trends in imports and their prices;

-- Establishment of "regional investigating authority" for investigations of complaints from manufacturing industry and agricultural producers in countries belonging to a regional economic grouping;

-- Training of lawyers, accountant and other processionals in the application of trade remedy laws (viz. Agreements on ADP, SCM and safeguards).

Jamaica, speaking on behalf of the ACP countries, supported Kenya's proposal. It said that anti-dumping legislation is at best rudimentary among ACP countries, making it difficult for them to deal with dumped imports. It underlined the need for technical assistance, including training of personnel, to be made an integral part of a new agreement.

Ghana, speaking on behalf of the African Group, also supported the proposal. It said that African countries have already expressed concern about the following issues: the need to avoid more complex rules; the need for more technical assistance; and the need to ensure sufficient development dimension in the negotiations.

According to trade officials, Ghana said that the very complex provision in anti-dumping prevented African countries from exercising their trade rights. It expressed concern that making the current agreement even more technical will make implementation for developing countries a nightmare.

The Chair said that these issues would be addressed in February, and could be again discussed in March when the Group will deal with issues proposed but not included in the Chair's text.

The Chair noted that the area of anti-dumping is inherently complex. +

 


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