TWN Info Service on WTO and Trade Issues (May08/03)
11 May 2008
Third World Network

Trade: ACP, African Group call for S&D treatment in anti-dumping
Published in SUNS #6461 dated 23 April 2008 

By Kanaga Raja Geneva, 22 April 2008

Two key groups of developing countries have proposed changes to the current Anti-Dumping Agreement aimed at making it easier for developing countries to apply anti-dumping measures.

The proposal was made at an informal meeting of the WTO Negotiating Group on Rules on Monday.

Jamaica, on behalf of the African, Caribbean and Pacific (ACP) Group and Cote d'Ivoire, on behalf of the African Group, introduced the proposal (TN/RL/GEN/154) titled "Special and Differential Treatment and Technical Assistance in Trade Remedies" for inclusion in the Chair's revised text on the Anti-Dumping Agreement.

The proposal includes suggested texts for the modification of Article 15 of the Anti-Dumping Agreement with the aim of ensuring that developing countries are able to take full advantage of the provision, particularly, as it relates to initiation and investigation of dumping under the Agreement and the application of anti-dumping measures against developing country Members.

Article 15 ("Developing Country Members") of the Anti-Dumping Agreement currently states that: "It is recognized that special regard must be given by developed country Members to the special situation of developing country Members when considering the application of anti-dumping measures under this Agreement. Possibilities of constructive remedies provided for by this Agreement shall be explored before applying anti-dumping duties where they would affect the essential interests of developing country Members."

According to trade officials, many delegations welcomed the ACP-African Group proposal as a good basis for future discussions on S&D treatment. However, concerns were expressed about certain elements, including allowing government assistance to local industry in anti-dumping actions.

Jamaica said that developing countries are finding it difficult to use the Anti-Dumping Agreement because of lack of an institutional framework and the fact that domestic industry is often composed of small- and medium-sized enterprises.

Cote d'Ivoire said that special and differential treatment should be an integral part of any WTO agreement.

The paper by the ACP and African Groups proposes additions to Article 15 of the Anti-Dumping Agreement.

The proposed changes to Article 15 begins by saying that "It is recognized that special regard must be given by developed country members to the special situations of developing country members when considering the application of anti-dumping measures under this Agreement. Constructive remedies shall be explored before applying anti-dumping measures."

In this regard, the paper added, developed country Members shall invite consultations, within a reasonable period of time, before the initiation of an investigation against goods originating in or exported from a developing country Member. Such consultations shall explore constructive remedies, with a view to arriving at a mutually agreed upon solution short of investigation or imposition of measures by the developed country against the developing country Member.

With regards to the initiation of investigation, the paper proposed text that says that Members further recognize that "special circumstances" referred to in Article 5.6, which permit authorities to initiate investigations without having received a written application by or on behalf of the domestic industry for the initiation of such investigation, exist in developing countries.

Due to these "special circumstances" prevailing in developing countries, the paper proposes that governments of these countries may play an active role in:

-- Assisting the domestic industry which is alleging that increased dumped imports are causing injury, in collecting information, inter alia, on volume of imports and on prices, both export prices and prices prevailing on the domestic market of the exporter for the like product;

-- Assisting such industries in collecting evidence required by Article 5.4 on the degree of support or opposition to the application expressed by domestic producers in order to establish that the application has been made by or on behalf of the industry;

-- Requesting the investigating authorities to initiate investigations where there are reasonable grounds to believe, on the basis of the information collected, that there is sufficient evidence to suggest that increased imports are causing injury to the domestic industry and the industry has no technical capacity to apply for investigations.

In the collection of evidence, the paper said that governments could exercise surveillance of trends in imports and the prices of products that are alleged to be injured by dumped products.

Such surveillance could be exercised by requiring the customs administration to provide on transaction-by-transaction basis, data on volume of imports and the prices of products put under surveillance; and adopting systems of automatic licensing of imports of such products.

The information collected under the surveillance mechanism shall be published and could be used as evidence in support of applications to the investigating authorities for initiation of investigations by the affected domestic industry, or by governments, where application for initiation of investigations is made by them.

The proposal also suggests the use of constructive remedies. Such remedies shall take the form of:

-- Application of lesser anti-dumping duty than the margin of dumping, if such lesser duty would be adequate to remove the injury to the domestic industry;

-- Non-application, including suspension or termination, of provisional measures/or anti-dumping duties where any exporter from a developing country Member undertakes to review its prices or to cease exports to the area in question at dumped prices;

-- Acceptance of price undertakings from any exporter from a developing country Member provided that the undertaking is sufficient to eliminate the margin of injury;

-- Longer time-frames for receiving answers to questionnaires from exporters and producers of developing country Members.

As to the issue of technical assistance, the ACP and African Group proposal said that technical assistance to developing country Members shall be provided on request by Members, and by the WTO Secretariat within its competence to enhance the capacities of these Member countries in the application of anti-dumping measures in accordance with the rules of the Agreement.

The areas in which such assistance would be needed include among others:

-- Establishment and strengthening of national legal and institutional frameworks for the application of anti-dumping 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 Agreement;

-- Establishment and strengthening of regional investigating authority for investigations of complaints on dumping in countries belonging to a regional economic grouping;

-- Building and enhancing the technical capacities of the officials of the investigating authorities for undertaking investigations;

-- Establishment of mechanisms for surveillance of imports of products that are alleged to be causing injury to domestic industry with a view to assisting them in collecting relevant information on trends in imports and their prices;

-- Training of lawyers, accountants and other professionals in the application of anti-dumping measures.

The provisions of Article 15 shall be reviewed by the Committee on Anti-Dumping Practices after three years with a view to examining whether any modifications and improvements would be necessary to make it responsive to the needs of developing countries, the paper concluded.

According to trade officials, Lesotho, speaking on behalf of the Least Developed Countries, said that after NAMA, the LDCs would also need capacity-building on trade remedies to protect their domestic industries.

Egypt said that the domestic industries of developed countries must not be the only ones to benefit from the WTO Anti-Dumping Agreement. It described the proposal as a good basis for future discussions.

According to trade officials, India said that it supported the proposal in general but cautioned against overplaying the role of government.

China said that the proposal could be the basis for further discussions. It added that the threshold for "de minimis" anti-dumping margin on developing countries should be raised; the price undertaking for developing countries should be made mandatory; and that the time period for anti-dumping measures on developing countries should be limited to five years.

According to trade officials, Brazil said that it supports the proposal on consultations before an investigation, and the application of the lesser-duty rule. It was however of the view that the idea for more government assistance to domestic industry goes too far, pointing to the impact of this on the objectivity of the investigating authorities.

Chile said that government intervention would be problematic. It also expressed misgivings about the proposal for allowing regional anti-dumping investigation.

Indonesia voiced concerns over the idea of customs surveillance of imports, adding that licensing would be an additional burden to importers. It also questioned the need for government assistance to local industry in anti-dumping.

Turkey said that while it is sympathetic to the proposal, it would be concerned if it leads to more protectionism.

Japan said that the lesser-duty rule and allowing price undertakings are important to all members. It shared the concern of some members with regards to the self-initiation of anti-dumping action by the government.

Korea said that the surveillance proposal has the potential for misuse, and that the information requirements for exporters are excessive.

Norway said that it could not agree with self-initiation by developing countries in all anti-dumping cases, as this is supposed to be the exception and not the norm. It also objected to the proposed use of automatic import licensing.

Chinese Taipei expressed concern that the publication of surveillance information could include confidential business information.

According to trade officials, the EU welcomed the proposal in light of what it said was lack of discussions on S&D treatment in the Group, and called it a very good basis for further discussions. It however said that the Group must also answer the question as to "what is a developing country", adding that only a few WTO members are not developing countries.

The EU also noted the growing trend for developing countries to use anti-dumping measures, and that many of these measures are also directed at other developing countries. It supported the surveillance mechanism of the proposal, as surveillance is a right of every WTO member, but urged softer language for technical assistance.

The US also said that developing countries have become the leading users of anti-dumping measures. It said that the proposal contains elements that it could support but that some other elements would be problematic. It noted that it had submitted a paper to the Anti-Dumping Committee on S&D treatment, including the use of price undertakings.

The US said that automatic import licensing would create a lot of problems, and the information requirements on exporters would impact on the free flow of goods. It also questioned the use of pre-shipment inspection agencies' data for anti-dumping investigation and the lesser-duty rule.

Australia said that it recognized the problems in this area for some developing countries but expressed some concern about government assistance to domestic industry.

In response, Jamaica said that a developing-country government must play an active role in assisting its domestic industry, which is usually not organized and has no access to information. It stressed that the proposed surveillance mechanism is not intended to be a trade barrier.

Chairman Ambassador Guillermo Valles Galmes of Uruguay thanked the ACP and African Groups for their contribution in a "very important area" of the Group's mandate. He said that the proposal has helped deepen the discussion.

He added that statistics show the growing number of anti-dumping measures coming from developing countries, and applied to other developing countries. This angle, he said, must also be discussed.

The Chair said that the Group will come back to the proposal. The Group is expected to hold an informal meeting on fisheries subsidies on 24-25 April