Bridges Weekly Trade News Digest • Volume 10 • Number 4 • 8th February 2006
Anti-Dumping Negotiations Resume, Address Public Interest
WTO Members went straight into technical discussions on potential changes to anti-dumping rules, as negotiations on the issue resumed for the first time after the December Ministerial Conference at a 1-2 February meeting of the Negotiating Group on Rules. A Canadian proposal to include a public interest clause in the Anti-dumping Agreement received the most attention. Meanwhile, Chair Ambassador Guillermo Valles Galmes of Uruguay announced that he would come up with a consolidated draft text for a Doha Round agreement on rules by July, in accordance with a timeline set out by ministers from 25-odd WTO Member countries in Davos late last month (see BRIDGES Weekly, 1 February 2006).
Canada: Members should establish ‘public interest’ of anti-dumping duties
Canada’s proposal (TN/RL/GEN/85) would modify the Antidumping Agreement (ADA) to require Members to establish domestic mechanisms for "its authorities to inquire into whether the imposition of an anti-dumping duty… would not be in the public interest." In other words, to entitle sections of society negatively affected by the duties, such as consumers or industrial users of the imported product in question, to have their views taken into consideration when the government is deciding to impose additional duties on an allegedly dumped import. "As a result of any such inquiry," the proposed amendment continues, "the authorities may decide to eliminate or reduce the level of duties that would otherwise be applied." The proposal also puts forward text for a possible annex to the ADA outlining factors that the concerned authorities should consider when making their decision, including the likely effect of imposing an anti-dumping duty on consumers as well as domestic producers or services providers that use the targeted product.
The ‘friends of anti-dumping’ (FAN), a group of developed and developing country Members that want the Doha Round to result in tighter disciplines on the use of such measures, had previously submitted proposals advocating the inclusion of a clause allowing concerned stakeholders such as consumer groups, producers and importers to be involved before a decision to impose anti-dumping measures is taken (see BRIDGES Weekly, 20 April 2005).
Many Members welcomed the Canadian proposal, although they raised many questions about it. New Zealand, for example, asked what would determine whether a particular party was eligible to comment, and at what point in time of an anti-dumping investigation such interests would be considered. The US expressed "philosophical concerns" with the proposal, wondering how judgements on legitimate domestic concerns would be made, and whether national decisions would be challengeable under the WTO’s dispute settlement mechanism, an issue that had already cropped up in previous discussions of the issue (see BRIDGES Weekly, 5 October 2005).
However, the Canadian proposal is explicit in specifying that any new public interest provisions "must not try to prescribe what is or is not in the importing Member’s economic interest," and that it is not necessary "to prescribe the precise modalities for the implementation of these provisions." It further specified that a country’s eventual public interest decisions, as the sovereign prerogative of each Member, would fall beyond the reach of WTO dispute settlement proceedings. China welcomed this flexibility. Hong Kong and other FAN Members were generally supportive of the proposal, and said it allowed for the possibility of cooperation.
Mexican proposal on ‘price undertakings’ discussed
Members generally welcomed a proposal by Mexico (TN/RL/GEN/76) that puts forward draft legal text on ‘price undertakings’ — an alternative to anti-dumping measures where exporters offer to raise the export price of their product in order to avoid the imposition of an anti-dumping duty.
Mexico contends that the simple initiation of an anti-dumping investigation affects trade in the good being examined, since it motivates importers to modify their purchasing practices. The proposal points to price undertakings as a way of avoiding definitive anti-dumping duties while simultaneously addressing the threat of injury to domestic industry in the export market. Arguing that Article 8 of the ADA does not clearly set out the rules and requirements for anti-dumping authorities to accept an offer of a price undertaking, it proposes modifying the treaty to establish clear rules on exporters’ right to offer such price undertakings as well as "a transparent procedure for [their] acceptance or rejection…"
The proposed amendments provide for the suspension or termination of anti-dumping proceedings "upon receipt of satisfactory voluntary undertakings from any exporter to revise its prices… so that the [investigating] authorities are satisfied that the injurious effect of the dumping is eliminated." They also specify that exporters would be notified of their right to offer price undertakings, but would not be asked to make any unless the concerned authorities in the importing country had already made a preliminary determination of the existence and extent of dumping.
Several Members voiced concerns that the proposal sought to make the acceptance of price undertakings mandatory for investigating authorities, and that it drew a link to the so-called "lesser duty" rule which would require antidumping duties to never exceed the dumping margin. The proposal specifies that price increases offered through such undertakings "shall not be higher than necessary to eliminate the margin of dumping determined for the said exporter," and that the increases "shall be less than the margin of dumping if such increases would be adequate to remove the injury." New Zealand asked why such a link was being established, considering that no consensus on the lesser duty rule had been reached, let alone on how to incorporate it into price undertakings. The US and Hong Kong raised similar questions.
China, the EU and Thailand also pointed out that Mexico’s proposal to grant exporters the right to address "minor errors and omissions" in information failed to explain such errors and omissions would be defined.
According to one source, the Chair will use consultations and detailed discussions within a small group of Members as the basis for drawing up consolidated text for submission by July.
The next rules week is scheduled for 13-17 March.
ICTSD reporting.