Bridges Weekly Trade News Digest • Volume 8 • Number 10 • 18th March 2004
WTO Rules Group Switching To Informal Mode To Address Numerous Proposals
The WTO Negotiating Group on Rules gathered on 16 March for its first meeting after the failed Cancun ministerial conference in September last year. The group, which focuses on the review and improvement of WTO rules that govern issues such as dumping, antidumping measures, subsidies and countervailing measures has seen over 150 submissions on all these issues since the start of the Doha round. During the meeting — which lasted only half a day rather than the scheduled two — the new Chair of the group, Ambassador Eduardo Pérez Motta (Mexico), said he would mainly hold informal sessions in the foreseeable future to allow a more focused discussion. Due to the large number of highly technical proposals, he said Members would benefit from informal discussions to gain a greater understanding of them. So far, while Members have been active in making proposals at the formal negotiating sessions, there has been no convergence of positions. Sources indicated that any movement would only follow progress in key areas such as agriculture.
New proposal on issues related to affiliated parties
Just prior to the meeting of the Negotiating Group on Rules, Japan, Brazil, Colombia and eight other countries belonging to the so called ‘Friends of Anti-dumping Negotiations’ group made a new submission (TN/RL/W/146, available at http://docsonline.wto.org). The submission focused on the definition of ‘affiliated parties’, relevant to the calculation of dumping margins. The ‘Friends’ sought to tighten this definition, so that transactions to be included in the calculation would only be those relating to affiliates and subsidiaries in which an exporter had at least a 50 percent stake based on voting rights. In antidumping investigations, the antidumping authority undertakes special calculations when imports and exports happen between a company and its affiliate, since prices are not necessarily considered representative. When the ‘affiliate’ definition is loose, the information requirement sometimes becomes overly burdensome, or the information is not available, according to the ‘Friends’. Based on incorrect information, the calculated dumping margins might be inflated. The ‘Friends’ also argued that rules for the treatment of transactions between a company and its affiliates in antidumping cases would need to be clearly set.
At the meeting, the US — which traditionally is a major user of antidumping duties — said the approach of the paper was too narrow and legalistic, and said that the tighter definition of affiliates was problematic in a number of cases, such as in family-owned businesses and unlisted subsidiaries. The US felt that the proposal overlooked the real problem: cases where artificial prices were used for tax purposes. The EC, while generally welcoming the proposal, echoed the US’s concern that the definition of affiliates was based on voting rights in the proposal.
Talks on improving WTO disciplines in fisheries subsidies, which are also on the Rules Negotiating Group agenda, did not take place. The next set of rules talks are scheduled for 26-28 April, and will mainly consist of informal consultations.
ICTSD reporting; "U.S. Faults ‘Friends’ Proposal for Tighter WTO Dumping Rules on Affiliated Parties," WTO REPORTER, 17 March 2004.