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WTO ANALYTICAL INDEX: ANTI-DUMPING AGREEMENT Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 (Anti-Dumping Agreement) |
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Article 3: Determination of Injury(9) (footnote original) 9 Under this Agreement the term “injury” shall, unless otherwise specified, be taken to mean material injury to a domestic industry, threat of material injury to a domestic industry or material retardation of the establishment of such an industry and shall be interpreted in accordance with the provisions of this Article.
3.1 A determination of injury for purposes of Article VI of GATT 1994 shall be based on positive evidence and involve an objective examination of both (a) the volume of the dumped imports and the effect of the dumped imports on prices in the domestic market for like products, and (b) the consequent impact of these imports on domestic producers of such products.
3.2 With regard to the volume of the dumped imports, the investigating authorities shall 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. With regard to the effect of the dumped imports on prices, the investigating authorities shall consider whether there has been a significant price undercutting by the dumped imports as compared with the price of a like product of the importing Member, or whether the effect of such imports is otherwise to depress prices to a significant degree or prevent price increases, which otherwise would have occurred, to a significant degree. No one or several of these factors can necessarily give decisive guidance.
3.3 Where imports of a product from more than one country are simultaneously subject to anti-dumping investigations, the investigating authorities may cumulatively assess the effects of such imports only if they determine that (a) the margin of dumping established in relation to the imports from each country is more than de minimis as defined in paragraph 8 of Article 5 and the volume of imports from each country is not negligible and (b) a cumulative assessment of the effects of the imports is appropriate in light of the conditions of competition between the imported products and the conditions of competition between the imported products and the like domestic product.
3.4 The examination of the impact of the dumped imports on the domestic industry concerned shall include an evaluation of all relevant economic factors and indices having a bearing on the state of the 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. This list is not exhaustive, nor can one or several of these factors necessarily give decisive guidance.
3.5 It must be demonstrated that the dumped imports are, through the effects of dumping, as set forth in paragraphs 2 and 4, causing injury within the meaning of this Agreement. The demonstration of a causal relationship between the dumped imports and the injury to the domestic industry shall be based on an examination of all relevant evidence before the authorities. The authorities shall also examine any known factors other than the dumped imports which at the same time are injuring the domestic industry, and the injuries caused by these other factors must not be attributed to the dumped imports. Factors which may be relevant in this respect include, inter alia, the volume and prices of imports not sold at dumping prices, contraction in demand or changes in the patterns of consumption, trade restrictive practices of and competition between the foreign and domestic producers, developments in technology and the export performance and productivity of the domestic industry.
3.6 The effect of the dumped imports shall be assessed in relation to the domestic production of the like product when available data permit the separate identification of that production on the basis of such criteria as the production process, producers’ sales and profits. If such separate identification of that production is not possible, the effects of the dumped imports shall be assessed by the examination of the production of the narrowest group or range of products, which includes the like product, for which the necessary information can be provided.
3.7 A determination of a threat of material injury shall be based on facts and not merely on allegation, conjecture or remote possibility. The change in circumstances which would create a situation in which the dumping would cause injury must be clearly foreseen and imminent.(10) In making a determination regarding the existence of a threat of material injury, the authorities should consider, inter alia, such factors as:
(footnote original) 10 One example, though not an exclusive one, is that there is convincing reason to believe that there will be, in the near future, substantially increased importation of the product at dumped prices.
(i) a significant rate of increase of dumped imports into the domestic market indicating the likelihood of substantially increased importation;
(ii) sufficient freely disposable, or an imminent, substantial increase in, capacity of the exporter 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;
(iii) whether imports are entering at prices that will have a significant depressing or suppressing effect on domestic prices, and would likely increase demand for further imports; and
(iv) inventories of the product being investigated.
No one of these factors by itself can necessarily give decisive guidance but the totality of the factors considered must lead to the conclusion that further dumped exports are imminent and that, unless protective action is taken, material injury would occur.
3.8 With respect to cases where injury is threatened by dumped imports, the application of anti-dumping measures shall be considered and decided with special care. (a) Relationship with other paragraphs of Article 3 100. In Thailand — H-Beams, the Appellate Body explained the relationship between the paragraphs of Article 3: “Article 3 as a whole deals with obligations of Members with respect to the determination of injury. Article 3.1 is an overarching provision that sets forth a Member’s fundamental, substantive obligation in this respect. Article 3.1 informs the more detailed obligations in succeeding paragraphs. These obligations concern the determination of the volume of dumped imports, and their effect on prices (Article 3.2), investigations of imports from more than one country (Article 3.3), the impact of dumped imports on the domestic industry (Article 3.4), causality between dumped imports and injury (Article 3.5), the assessment of the domestic production of the like product (Article 3.6), and the determination of the threat of material injury (Articles 3.7 and 3.8). The focus of Article 3 is thus on substantive obligations that a Member must fulfill in making an injury determination.”(126) 101. In Egypt — Steel Rebar, the Panel confirmed the role of Article 3.1 and explained the relationship between paragraph 5 and paragraphs 2 and 4: “… It is clear that Article 3.1 provides overarching general guidance as to the nature of the injury investigation and analysis that must be conducted by an investigating authority. Article 3.5 makes clear, through its cross-references, that Articles 3.2 and 3.4 are the provisions containing the specific guidance of the AD Agreement on the examination of the volume and price effects of the dumped imports, and of the consequent impact of the imports on the domestic industry, respectively …”(127) 102. In Egypt — Steel Rebar, Turkey claimed that because the period of investigation for dumping ended on 31 December 1998, and most of the injury found by the investigating authorities occurred in the first quarter of 1999, the investigating authorities had failed to demonstrate that dumping and injury occurred at the same point in time and that there was a link between the imports that were specifically found to be dumped and the injury found, violating Articles 3.5 and 3.1.(128) The Panel disagreed: “… neither of the articles cited in this claim [Articles 3.1 and 3.5], nor any other provision of the AD Agreement, contains any specific rule as to the time periods to be covered by the injury or dumping investigations, or any overlap of those time periods.(129)
In fact, the only provisions that provide guidance as to how the price effects and effects on the domestic industry of the dumped imports are to be gauged are (as cross-referenced in Article 3.5), Articles 3.2 (volume and price effects of dumped imports), and Article 3.4 (impact of the dumped imports on the domestic industry). Neither of these provisions specifies particular time periods for these analyses …”(130) 103. The Panel on Argentina — Poultry Anti-Dumping Duties considered that “there is a prima facie case that an investigating authority fails to conduct an ‘objective’ examination if it examines different injury factors using different periods. Such a prima facie case may be rebutted if the investigating authority demonstrates that the use of different periods is justifiable on the basis of objective grounds (because, for example, data for more recent periods was not available for certain injury factors).”(131) 104. The Panel on Argentina — Poultry Anti-Dumping Duties rejected the argument that the periods of review used for the separate dumping and injury determination must end at the same time, and considered that “there is nothing in the AD Agreement to suggest that the periods of review for dumping and injury must necessarily end at the same point in time. Indeed, since there may be a time-lag between the entry of dumped imports and the injury caused by them, it may not be appropriate to use identical periods of review for the dumping and injury analyses in all cases.”(132) (ii) Recommendation by the Committee on Anti-Dumping Practices 105. With respect to the recommendation by the Committee on Anti-Dumping Practices on the period of data collection, see paragraph 8 above. 106. Referring to footnote 9 to Article 3 and to Article 4.1, the Panel on Mexico — Corn Syrup stated: “These two provisions inescapably require the conclusion that the domestic industry with respect to which injury is considered and determined must be the domestic industry defined in accordance with Article 4.1”.(133) (a) Significance of paragraph 1 within the context of Article 3 107. In Thailand — H-Beams, the Appellate Body explained the legal status of paragraph 1 in the provisions of Article 3. See paragraph 100 above.(134) See also paragraph 101 above. 108. The Panel on US — Softwood Lumber VI considered that in the absence of independent argument supporting overarching claims under Article 3.1, the resolution of these claims is substantively dependent on the resolution of the specific claims under the other paragraphs of Article 3: “Thus, in the absence of any additional arguments supporting the allegations of violation of Articles 3.1 and 15.1, if we find that the facts give rise to a conclusion of no violation under one of Canada’s specific claims, we will also consider that those facts give rise to the same conclusion, no violation, with respect to the overarching claims under Article 3.1 of the AD Agreement and Article 15.1 of the SCM Agreement. With respect to any aspect of the determination that is found to be inconsistent with any other provision of Articles 3 and 15 of the Agreements asserted by Canada, we can see no reason to conclude, in addition, that it also violates Article 3.1 of the AD Agreement and Article 15.1 of the SCM Agreement. In the absence of additional arguments in support of these claims, to say that a violation of a specific provision of the Agreements also violates the overarching obligations in Articles 3.1 and 15.1 does not clarify the obligation set out in Articles 3.1 of the AD Agreement and 15.1 of the SCM Agreement. Nor would it provide any guidance in the context of implementation of any recommendation of the DSB. Therefore, we will make no findings with respect to these claims.”(135) (b) Investigating authorities’ obligation under Article 3.1 109. In US — Hot-Rolled Steel, the Appellate Body ruled that “the thrust of the investigating authorities’ obligation, in Article 3.1, lies in the requirement that they base their determination on ‘positive evidence’ and conduct an ‘objective examination’”.(136) 110. In US — Hot-Rolled Steel, the Appellate Body ruled that “the term ‘positive evidence’ relates, in our view, to the quality of the evidence that authorities may rely upon in making a determination.” It further explained that “[t]he word ‘positive’ means, to us, that the evidence must be of an affirmative, objective and verifiable character, and that it must be credible.”(137) 111. In Thailand — H-Beams, the Appellate Body reversed the Panel’s finding that an injury determination must be based only upon evidence disclosed to, or discernible by, the parties to the investigation, and concluded that “Article 3.1 … permits an investigating authority making an injury determination to base its determination on all relevant reasoning and facts before it.”(138) The Appellate Body explained: “Even if we accept that the ordinary meaning of these terms is reflected in the dictionary definitions cited by the Panel, in our view, the ordinary meaning of these terms does not suggest that an investigating authority is required to base an injury determination only upon evidence disclosed to, or discernible by, the parties to the investigation. An anti-dumping investigation involves the commercial behaviour of firms, and, under the provisions of the Anti-Dumping Agreement, involves the collection and assessment of both confidential and non-confidential information. An injury determination conducted pursuant to the provisions of Article 3 of the Anti-Dumping Agreement must be based on the totality of that evidence. We see nothing in Article 3.1 which limits an investigating authority to base an injury determination only upon non-confidential information.”(139) 112. In Thailand — H-Beams, the Appellate Body provided the following contextual support for its finding that a determination of injury pursuant to Article 3.1 need not be based exclusively on evidence which has been disclosed to the parties to the investigation: “Contextual support for this interpretation of Article 3.1 can be found in Article 3.7, which states that a threat of material injury must be ‘based on facts and not merely on allegation, conjecture or remote possibility’. This choice of words shows that, as in Article 3.1, which overarches and informs it, it is the nature of the evidence that is being addressed in Article 3.7. A similar requirement for an investigating authority can be found in Article 5.2, which requires that an application for initiation of an antidumping investigation may not be based on ‘[s]imple assertion, unsubstantiated by relevant evidence’. Article 5.3 requires an investigating authority to ‘examine the accuracy and adequacy’ of the evidence provided in such an application.
Further contextual support for this reading of Article 3.1 is provided by other provisions of the Anti-Dumping Agreement. Article 6 (entitled ‘Evidence’) establishes a framework of procedural and due process obligations which, amongst other matters, requires investigating authorities to disclose certain evidence, during the investigation, to the interested parties. Article 6.2 requires that parties to an investigation ‘shall have a full opportunity for the defence of their interests’. Article 6.9 requires that, before a final determination is made, authorities shall ‘inform all interested parties of the essential facts under consideration which form the basis for the decision’. There is no justification for reading these obligations, which appear in Article 6, into the substantive provisions of Article 3.1. We do not, however, imply that the injury determination by the Thai authorities in this case necessarily met the requirements of Article 6. As the Panel found that Poland’s claim under Article 6 did not meet the requirements of Article 6.2 of the DSU, the issue was not considered by the Panel.
Article 12 (entitled ‘Public Notice and Explanation of Determinations’) also provides contextual support for our interpretation of the meaning of ‘positive evidence’ and ‘objective examination’ in Article 3.1. In a similar manner to Article 6, Article 12 establishes a framework of procedural and due process obligations concerning, notably, the contents of a final determination. Article 12.2.2 requires, in particular, that a final determination contain ‘all relevant information on the matters of fact and law and reasons which have led to the imposition of final measures’, and ‘the reasons for the acceptance or rejection of relevant arguments or claims made by the exporters and importers’. Article 12, like Article 6, sets forth important procedural and due process obligations. However, as in the case of Article 6, there is no justification for reading these obligations into the substantive provisions of Article 3.1. We do not, however, imply that the injury determination of the Thai authorities in this case necessarily met the requirements of Article 12. This issue was not considered by the Panel, since Poland did not make a claim under this provision.”(140) 113. Further, in Thailand — H-Beams, the Appellate Body rejected the Panel’s reasoning that in reviewing the determination of injury by the investigating authority under Article 3, the Panel “is required, under Article 17.6(i), in assessing whether the establishment of facts is proper, to ascertain whether the ‘factual basis’ of the determination is ‘discernible’ from the documents that were available to the interested parties and/or their legal counsel in the course of the investigation and at the time of the final determination; and, in assessing whether the evaluation of the facts is unbiased and objective, to examine the ‘analysis and reasoning’ in only those documents ‘to ascertain the connection between the disclosed factual basis and the findings.’”(141) The Panel had linked the obligation of national authorities under Article 3.1 to base the determination of injury on positive evidence, i.e. excluding confidential information not disclosed to the parties to the investigation, to the Panel’s obligation under Articles 17.5 and 17.6, stating that “we as a panel should base our review on the reasoning and analysis reflected in the final determination and in communications and disclosures to which the Polish firms had access in the course of the investigation or at the time of the final determination”. The Appellate Body had already found that under Article 3.1, contrary to the Panel’s finding, the investigating authority was not precluded from basing its determination of injury on information not disclosed to the parties to the investigation. The Appellate Body then also disagreed with the link, established by the Panel, between Article 3.1 on the one hand and Articles 17.5 and 17.6 on the other: “[W]hile the obligations in Article 3.1 apply to all injury determinations undertaken by Members, those in Articles 17.5 and 17.6 apply only when an injury determination is examined by a WTO panel. The obligations in Articles 17.5 and 17.6 are distinct from those in Article 3.1.”(142) 114. In Thailand — H-Beams, the Appellate Body then also reversed the Panel’s findings that the Panel was precluded from examining facts not disclosed to interested parties in the national investigation: “Articles 17.5 and 17.6(i) require a panel to examine the facts made available to the investigating authority of the importing Member. These provisions do not prevent a panel from examining facts that were not disclosed to, or discernible by, the interested parties at the time of the final determination.”(143) Concept of objective examination 115. In US — Hot-Rolled Steel, the Appellate Body analysed the concept of “objective assessment” as compared to “positive evidence”, indicating that the latter is concerned with the investigating process itself as opposed to the facts justifying the injury determination: “The term ‘objective examination’ aims at a different aspect of the investigating authorities’ determination. While the term ‘positive evidence’ focuses on the facts underpinning and justifying the injury determination, the term ‘objective examination’ is concerned with the investigative process itself. The word ‘examination’ relates, in our view, to the way in which the evidence is gathered, inquired into and, subsequently, evaluated; that is, it relates to the conduct of the investigation generally. The word ‘objective’, which qualifies the word ‘examination’, indicates essentially that the ‘examination’ process must conform to the dictates of the basic principles of good faith and fundamental fairness. (144) In short, an ‘objective examination’ requires that the domestic industry, and the effects of dumped imports, be investigated in an unbiased manner, without favouring the interests of any interested party, or group of interested parties, in the investigation. The duty of the investigating authorities to conduct an ‘objective examination’ recognizes that the determination will be influenced by the objectivity, or any lack thereof, of the investigative process. (145)”(146) Extent of the objective examination 116. In US — Hot-Rolled Steel, Japan had challenged Section 771(7)(C)(iv) of the United States Tariff Act of 1930, as amended, (the so-called “captive production provision”) which provided that, in certain statutorily defined circumstances, the investigating authorities when conducting an injury determination “shall focus primarily” on a particular segment of the “domestic industry”, when “determining market share and the factors affecting financial performance”. The Appellate Body examined whether the investigating authorities could make a sectoral examination of the domestic industry when conducting an injury determination under Article 3.1. As indicated in paragraph 144 below the Appellate Body concluded by reference to Article 3.4 that it may be highly pertinent to examine the domestic industry by part, sector or segment provided that such an examination be conducted in an “objective” manner as mandated by Article 3.1. The Appellate Body interprets the obligation to make an “objective” assessment in this regard as meaning that “where investigating authorities undertake an examination of one part of a domestic industry, they should, in principle, examine, in like manner, all of the other parts that make up the industry, as well as examine the industry as a whole” or, “in the alternative,” provide “a satisfactory explanation as to why it is not necessary to examine directly or specifically the other parts…”. It therefore found that an examination of only certain parts of a domestic industry does not ensure a proper evaluation of the state of the domestic industry as a whole, and does not, therefore, satisfy the requirements of “objectiv[ity]” in Article 3.1 of the Anti-Dumping Agreement: “… it may be highly pertinent for investigating authorities to examine a domestic industry by part, sector or segment. However, as with all other aspects of the evaluation of the domestic industry, Article 3.1 of the Anti-Dumping Agreement requires that such a sectoral examination be conducted in an ‘objective’ manner. In our view, this requirement means that, where investigating authorities undertake an examination of one part of a domestic industry, they should, in principle, examine, in like manner, all of the other parts that make up the industry, as well as examine the industry as a whole. Or, in the alternative, the investigating authorities should provide a satisfactory explanation as to why it is not necessary to examine directly or specifically the other parts of the domestic industry. Different parts of an industry may exhibit quite different economic performance during any given period. Some parts may be performing well, while others are performing poorly. To examine only the poorly performing parts of an industry, even if coupled with an examination of the whole industry, may give a misleading impression of the data relating to the industry as a whole, and may overlook positive developments in other parts of the industry. Such an examination may result in highlighting the negative data in the poorly performing part, without drawing attention to the positive data in other parts of the industry. We note that the reverse may also be true — to examine only the parts of an industry which are performing well may lead to overlooking the significance of deteriorating performance in other parts of the industry.
Moreover, by examining only one part of an industry, the investigating authorities may fail properly to appreciate the economic relationship between that part of the industry and the other parts of the industry, or between one or more of those parts and the whole industry. For instance, we can envisage that an industry, with two parts, may be overall in mild recession, where one part is performing very poorly and the other part is performing very well. It may be that the relationship between the two parts is such that the healthier part will lead the other part, and the industry as a whole, out of recession. Alternatively, the healthy part may follow the other part, and the industry as a whole, into recession.
Accordingly, an examination of only certain parts of a domestic industry does not ensure a proper evaluation of the state of the domestic industry as a whole, and does not, therefore, satisfy the requirements of ‘objectiv[ity]’ in Article 3.1 of the Anti-Dumping Agreement.”(147) 117. In US — Hot-Rolled Steel, the Appellate Body explained that “an important aspect of the ‘objective examination’ required by Article 3.1 is further elaborated in Article 3.4 as an obligation to ‘examin[e] the impact of the dumped imports on the domestic industry’ through ‘an evaluation of all relevant economic factors and indices having a bearing on the state of the industry’.” See also paragraphs 116 above and 144 below. 118. The Panel on Argentina — Poultry Anti-Dumping Duties considered that “to the extent that a Member failed to conduct a proper ‘examination of the impact of dumped imports’ for the purpose of Article 3.4, that Member also failed to conduct an ‘objective examination of … the consequent impact of the[] imports’ within the meaning of Article 3.1(b).”(148) (c) An objective examination based on positive evidence of “dumped imports” 119. The Panel on EC — Bed Linen, in a finding subsequently not reviewed by the Appellate Body, rejected the argument advanced by India that the term “dumped imports” must be understood to refer only to imports which are the subject of transactions in which the export price was below normal value. Rather, the Panel endorsed the argument by the European Communities that once a determination has been made that a product in question from particular producers is being dumped, this conclusion will then apply to all imports of that product from that source: “[W]e consider that dumping is a determination made with reference to a product from a particular producer/exporter, and not with reference to individual transactions. That is, the determination of dumping is made on the basis of consideration of transactions involving a particular product from particular producers/exporters. If the result of that consideration is a conclusion that the product in question from particular producers/exporters is dumped, we are of the view that the conclusion applies to all imports of that product from such source(s), at least over the period for which dumping was considered. Thus, we consider that the investigating authority is entitled to consider all such imports in its analysis of ‘dumped imports’ under Articles 3.1, 3.4, and 3.5 of the AD Agreement.” (149) 120. The Panel on EC — Bed Linen also indicated some practical reasons for why the phrase “dumped imports” could not refer only to those imports attributable to transactions in which export price was below normal value: “Our conclusion that investigating authorities may treat all imports from producers/exporters for which an affirmative determination of dumping is made as ‘dumped imports’ for purposes of injury analysis under Article 3 is bolstered by our view that the interpretation proposed by India, which entails the conclusion that the phrase ‘dumped imports’ refers only to those imports attributable to transactions in which export price is below normal value, would lead to an unworkable result in certain cases. One of the objects and purposes of the AD Agreement is to establish the conditions under which Members may impose anti-dumping duties in cases of injurious dumping. An interpretation which would, in many cases, make it impossible to assess one of the necessary elements, injury, is not consistent with that object and purpose.
An assessment of the volume, price effects, and consequent impact, only of imports attributable to transactions for which a positive margin was calculated would be, in many cases, impossible, or at least impracticable. Attempting to segregate individual transactions as to whether they were ‘dumped’ or not, even assuming it could be done, would leave investigating authorities in a quandary in cases in which the dumping investigation is undertaken for a sample of companies or products. Such sampling is specifically provided for in the AD Agreement, yet it would not be possible, in such cases, accurately to determine the volume of imports attributable to ‘dumped’ transactions. Similarly, if dumping is determined on the basis of a comparison of weighted average normal value to weighted average export price, there would be no comparisons concerning individual transactions which could serve as the basis for segregating imports in ‘dumped’ and ‘not-dumped’ categories.”(150) 121. In EC — Bed Linen (Article 21.5 — India), the Appellate Body reversed the finding by the Panel that in case of an investigation based on a sample, an investigating authority is entitled to consider the total volume of imports from non-examined producers and exporters as being dumped for the purposes of an Article 3 injury analysis, as long as a dumping margin had been established for any of the examined producers or exporters.(151) Contrary to the Panel, the Appellate Body considered that Article 9.4 does not provide justification for considering all imports from non-examined producers as dumped for purposes of Article 3. According to the Appellate Body: “Article 9.4 provides no guidance for determining the volume of dumped imports from producers that were not individually examined on the basis of ‘positive evidence’ and an ‘objective examination’ under Article 3. The exception in Article 9.4, which authorizes the imposition of antidumping duties on imports from producers for which no individual dumping margin has been calculated, cannot be assumed to extend to Article 3, and, in particular, in this dispute, to paragraphs 1 and 2 of Article 3. For the same reasons, we do not see why the volume of imports that has been found to be dumped by non-examined producers, for purposes of determining injury under paragraphs 1 and 2 of Article 3, must be congruent with the volume of imports from those non-examined producers that is subject to the imposition of anti-dumping duties under Article 9.4, as contended by the European Communities and the Panel.”(152) 122. In the view of the Appellate Body on EC — Bed Linen (Article 21.5 — India), while paragraphs 1 and 2 of Article 3 do not set forth a specific methodology for examining the volume of dumped imports in case the investigating authority carries out its investigation on the basis of a sample, they do “require investigating authorities to make a determination of injury on the basis of ‘positive evidence’ and to ensure that the injury determination results from an ‘objective examination’ of the volume of dumped imports, the effects of the dumped imports on prices, and, ultimately, the state of the domestic industry. Thus, whatever methodology investigating authorities choose for determining the volume of dumped imports, if that methodology fails to ensure that a determination of injury is made on the basis of ‘positive evidence’ and involves an ‘objective examination’ of dumped imports — rather than imports that are found not to be dumped — it is not consistent with paragraphs 1 and 2 of Article 3.”(153) 123. The Appellate Body on EC — Bed Linen (Article 21.5 — India) thus came to the conclusion that the European Communities’ approach whereby it had considered all imports from non-examined exporters or producers as dumped because a number of exporters included in the sample were found to have been dumping was inconsistent with the obligation to conduct an “objective examination”: “The examination was not ‘objective’ because its result is predetermined by the methodology itself. Under the approach used by the European Communities, whenever the investigating authorities decide to limit the examination to some, but not all, producers — as they are entitled to do under Article 6.10 — all imports from all non-examined producers will necessarily always be included in the volume of dumped imports under Article 3, as long as any of the producers examined individually were found to be dumping. This is so because Article 9.4 permits the imposition of the ‘all others’ duty rate on imports from non-examined producers, regardless of which alternative in the second sentence of Article 6.10 is applied. In other words, under the European Communities’ approach, imports attributable to non-examined producers are simply presumed, in all circumstances, to be dumped, for purposes of Article 3, solely because they are subject to the imposition of anti-dumping duties under Article 9.4. This approach makes it ‘more likely [that the investigating authorities] will determine that the domestic industry is injured’, and, therefore, it cannot be ‘objective’. Moreover, such an approach tends to favour methodologies where small numbers of producers are examined individually. This is because the smaller the number of individually-examined producers, the larger the amount of imports attributable to non-examined producers, and, therefore, the larger the amount of imports presumed to be dumped. Given that the Anti-Dumping Agreement generally requires examination of all producers, and only exceptionally permits examination of only some of them, it seems to us that the interpretation proposed by the European Communities cannot have been intended by the drafters of the Agreement.
For these reasons, we conclude that the European Communities’ determination that all imports attributable to non-examined producers were dumped — even though the evidence from examined producers showed that producers accounting for 53 percent of imports attributed to examined producers were not dumping — did not lead to a result that was unbiased, even-handed, and fair. Therefore, the European Communities did not satisfy the requirements of paragraphs 1 and 2 of Article 3 to determine the volume of dumped imports on the basis of an examination that is ‘objective’.”(154) (d) “the effect of dumped imports” 124. In Guatemala — Cement II, Mexico claimed that Guatemala’s investigating authority had violated Articles 3.1 and 3.2 by not considering at all, in its investigation, certain other cement imports. The Panel understood the Mexican claim to be that the Guatemalan authorities considered the type of cement under the not scrutinized imports as being “unlike” the cement under the imports subject to investigation, an assessment which Mexico considered erroneous. Mexico further claimed that the erroneous exclusion of certain imports from the investigation resulted in the following consequences: (i) the resulting volume of total imports of the product under investigation was lower; (ii) the share of allegedly dumped imports in total imports of the product under investigation was artificially inflated; (iii) the consideration of a faulty and incomplete figure for total imports of the product under investigation yielded a distorted figure for apparent domestic consumption; and (iv) because of this incorrect figure for apparent domestic consumption, the relationship between the increase in dumped imports and consumption was ultimately incorrect.(155) The Panel considered that consequences (i) through (iv), if proven, would constitute a violation of Articles 3.1 and 3.2, in that an exclusion of the imports at issue from the figures for domestic consumption of the like product affected the comparison that was made with the figures for volume of dumped imports for purposes of determining that there had been a significant increase in dumped imports relative to domestic consumption in the importing Member.(156) After reviewing the evidence submitted by Mexico and inconsistencies in Guatemala’s replies in this regard, the Panel ultimately found that Mexico had established a prima facie case of inconsistency with respect to Articles 3.1 and 3.2.(157) (e) Relationship with other paragraphs of Article 3 125. In Thailand — H-Beams, the Appellate Body referred to Article 3.7 as well as Articles 5.2, 5.3, 6 and 12 in interpreting Article 3.1. See paragraph 112 above. (a) Choice of analytical methodology 126. With respect to Article 3.2, the Panel on Thailand — H-Beams stated that “it is for the investigating authorities in the first instance to determine the analytical methodologies that will be applied in the course of an investigation, as Article 3 contains no requirements concerning the methodology to be used.”(158) 127. In Egypt — Steel Rebar, the Panel did not find on the plain text of Article 3.2 any requirement that the price undercutting analysis must be conducted at any particular level of trade. See paragraph 134 below. 128. The Panel on Thailand — H-Beams considered that a quarterly analysis of the trend in import volume is not required under Article 3.2, and went on to state that “[g]iven that on an annual basis over a multiyear period, imports from Poland increased in every period examined, we do not believe that quarter-to-quarter fluctuation in import volumes during one of the twelve-month periods examined invalidates the Thai authorities’ finding that the import volume of the subject imports ‘increased continuously’.”(159) (iii) Length of period of investigation 129. In Guatemala — Cement II, the Panel did not agree with Mexico’s argument that Guatemala’s authority had acted inconsistently with Article 3.2 by examining import data only for the one-year period of investigation. The Panel explained: “A recent recommendation of the Committee on Anti-Dumping Practices calls on Members to use a data collection period of at least three years. This recommendation reflects the common practice of Members.(160) That said, there is no provision in the Agreement which specifies the precise duration of the period of data collection. Thus, it cannot be said a priori that the use of a one-year period of data collection would not be consistent with the requirement of Article 3.2 to consider whether there has been a significant increase in the volume of dumped imports in the circumstances of a particular case. In this case, Guatemala argues that the reason for the short period of data collection was that exports by Cruz Azul did not become significant until 1995. The record of the investigation supports this conclusion.”(161) With respect to the recommendation by the Committee on Anti-Dumping Practices on this topic, see paragraph 8 above. (b) “a significant increase in dumped imports” 130. In Thailand — H-Beams, the Panel considered that Article 3.2 does not require that the term “significant” be used to characterize a subject increase in imports in the determination of an investigating authority. The Panel explained: “We note that the text of Article 3.2 requires that the investigating authorities ‘consider whether there has been a significant increase in dumped imports’. The Concise Oxford Dictionary defines ‘consider’ as, inter alia: ‘contemplate mentally, especially in order to reach a conclusion’; ‘give attention to’; and ‘reckon with; take into account’. We therefore do not read the textual term ‘consider’ in Article 3.2 to require an explicit ‘finding’ or ‘determination’ by the investigating authorities as to whether the increase in dumped imports is ‘significant’. While it would certainly be preferable for a Member explicitly to characterize whether any increase in imports as ‘significant’, and to give a reasoned explanation of that characterization, we believe that the word ‘significant’ does not necessarily need to appear in the text of the relevant document in order for the requirements of this provision to be fulfilled. Nevertheless, we consider that it must be apparent in the relevant documents in the record that the investigating authorities have given attention to and taken into account whether there has been a significant increase in dumped imports, in absolute or relative terms.”(162) 131. In Guatemala — Cement II, the Panel agreed with Mexico that Guatemala’s authority had acted inconsistently with Articles 3.1 and 3.2 by not taking into account imports other than those from the supplier under investigation. See paragraph 124 above.(163) (c) “the effect of the dumped imports on prices” 132. In Guatemala — Cement II, disagreeing with Mexico’s claim that in violation of Article 3.2, Guatemala’s authority did not properly examined the effect of dumped imports on the price of domestic sales, the Panel stated that “[b]ased on the evidence of declining prices and inability to achieve established price levels, coinciding with imports at lower prices we find that an objective and unbiased investigating authority could have properly concluded that the dumped imports were having a negative effect on the prices of the domestic industry.”(164) 133. In Guatemala — Cement II, the Panel also rejected Mexico’s argument that Guatemala’s authority conducted the examination of the price effect of dumped imports at the regional level only and not also at the national level and therefore acted inconsistently with Article 3.2. Rather, the Panel found that Guatemala had not limited its analysis to a particular region. The Panel also added that there was only one cement producer in Guatemala, and thus, even if the negative effect of the dumped imports on the prices of the domestic like product was only evidenced in one particular region (where that producer was located), this could still be viewed as causing injury to that producer.(165) 134. In Egypt — Steel Rebar, Turkey had argued that, to satisfy the requirements of Article 3.2, a price undercutting analysis must be made on a delivered to-the-customer basis, as, in its view, it is only at that level that any such undercutting can influence customers’ purchasing decisions. The Panel did not find on the basis of the plain text of Article 3.2 any requirement that the price undercutting analysis must be conducted in any particular way, that is, at any particular level of trade.(166) 135. The Panel on EC — Tube or Pipe Fittings similarly stated that “unlike Article 2 (in particular Article 2.4.2) of the Anti-Dumping Agreement, which contains specific requirements relating to the calculation of the dumping margin, Article 3.2 requires the investigating authorities to consider whether price undercutting is ‘significant’ but does not set out any specific requirement relating to the calculation of a margin of undercutting, or provide a particular methodology to be followed in this consideration”(167) The Panel reasoned as follows: “The text of Article 3.2 refers to domestic ‘prices’ (in the plural rather than singular). This textual element supports our view that there is no requirement under Article 3.2 to establish one single margin of undercutting on the basis of an examination of every transaction involving the product concerned and the like product. In addition, the text of Article 3.2 refers to the ‘dumped imports’, that is, the imports of the product concerned from an exporting producer that has been determined to be dumping. Thus, investigating authorities may treat any imports from producers/ exporters for which an affirmative determination of dumping is made as ‘dumped imports’ for purposes of injury analysis under Article 3. There is, however, no requirement to take each and every transaction involving the ‘dumped imports’ into account, nor that the ‘dumped imports’ examined under Article 3.2 are limited to those precise transactions subject to the dumping determination. This view is supported by the absence of a specific provision concerning time periods in the Agreement; an importing Member may investigate price effects of imports in an injury investigation period which may be different than the IP for dumping. These considerations do not, of course, diminish the obligation of an investigating authority to conduct an unbiased and even-handed price undercutting analysis.
We take note of the shared view of the parties that ‘the Panel should accord a considerable discretion to the investigating authorities to choose a methodology which produces a meaningful result while avoiding unfairness’. One purpose of a price undercutting analysis is to assist an investigating authority in determining whether dumped imports have, through the effects of dumping, caused material injury to a domestic industry. In this part of an anti-dumping investigation, an investigating authority is trying to discern whether the prices of dumped imports have had an impact on the domestic industry. The interaction of two variables would essentially determine the extent of impact of price undercutting on the domestic industry: the quantity of sales at undercutting prices; and the margin of undercutting of such sales. Sales at undercutting prices could have an impact on the domestic industry (for example, in terms of lost sales) irrespective of whether other sales might be made at prices above those charged by the domestic industry. The fact that certain sales may have occurred at ‘non-underselling prices’ does not eradicate the effects in the importing market of sales that were made at underselling prices. Thus, a requirement that an investigating authority must base its price undercutting analysis on a methodology that offset undercutting prices with ‘overcutting’ prices would have the result of requiring the investigating authority to conclude that no price undercutting existed when, in fact, there might be a considerable number of sales at undercutting prices which might have had an adverse effect on the domestic industry.”(168) (e) Relationship with other paragraphs of Article 3 136. With respect to the relationship of paragraph 2 with paragraphs 1, 3, 4 and 5 of Article 3, see paragraphs 100–101 above. (a) Relationship with other paragraphs of Article 3 137. With respect to the relationship of paragraph 3 with paragraphs 1, 2, 4 and 5 of Article 3, see paragraph 100 above. 138. In its report on EC — Tube or Pipe Fittings, the Appellate Body stated that in case of a cumulated injury analysis, there is no indication in the text of Article 3.2 that the analyses of volume and prices must be performed on a country-by-country basis where an investigation involves imports from several countries.(169) The Appellate Body thus confirmed the Panel’s position in this case that it is possible for the analyses of volume and prices envisaged under Article 3.2 to be done on a cumulative basis, as opposed to an individual country basis, when dumped imports originate from more than one country.(170) (b) Conditions for cumulation — general 139. The Panel on EC — Tube or Pipe Fittings came to the conclusion, on the basis of the text in Article 3.3, and citing contextual support in Articles 3.4 and 3.5, that the conditions identified in Article 3.3 are the sole conditions that must be satisfied by an investigating authority in order to undertake a cumulative assessment of the effects of dumped imports.(171) In particular, the Panel rejected Brazil’s allegation that an investigating authority must first consider whether country-specific import volumes have significantly increased before cumulating them.(172) The Appellate Body agreed with the Panel and reached the following conclusion: “The text of Article 3.3 expressly identifies three conditions that must be satisfied before an investigating authority is permitted under the Anti-Dumping Agreement to assess cumulatively the effects of imports from several countries. These conditions are:
(a) the dumping margin from each individual country must be more than de minimis;
(b) the volume of imports from each individual country must not be negligible; and
(c) cumulation must be appropriate in the light of the conditions of competition
(i) between the imported products; and
(ii) between the imported products and the like domestic product.
By the terms of Article 3.3, it is ‘only if’ the above conditions are established that an investigating authority ‘may’ make a cumulative assessment of the effects of dumped imports from several countries.
We find no basis in the text of Article 3.3 for Brazil’s assertion that a country-specific analysis of the potential negative effects of volumes and prices of dumped imports is a pre-condition for a cumulative assessment of the effects of all dumped imports. Article 3.3 sets out expressly the conditions that must be fulfilled before the investigating authorities may cumulatively assess the effects of dumped imports from more than one country. There is no reference to the country-by-country volume and price analyses that Brazil contends are pre-conditions to cumulation. In fact, Article 3.3 expressly requires an investigating authority to examine country-specific volumes, not in the manner suggested by Brazil, but for purposes of determining whether the ‘volume of imports from each country is not negligible’.”(173) 140. In support of its finding, the Appellate Body in EC — Tube or Pipe Fittings further elaborated on the rationale behind the practice of cumulation: “The apparent rationale behind the practice of cumulation confirms our interpretation that both volume and prices qualify as ‘effects’ that may be cumulatively assessed under Article 3.3. A cumulative analysis logically is premised on a recognition that the domestic industry faces the impact of the ‘dumped imports’ as a whole and that it may be injured by the total impact of the dumped imports, even though those imports originate from various countries. If, for example, the dumped imports from some countries are low in volume or are declining, an exclusively country-specific analysis may not identify the causal relationship between the dumped imports from those countries and the injury suffered by the domestic industry. The outcome may then be that, because imports from such countries could not individually be identified as causing injury, the dumped imports from these countries would not be subject to anti-dumping duties, even though they are in fact causing injury. In our view, therefore, by expressly providing for cumulation in Article 3.3 of the Anti-Dumping Agreement, the negotiators appear to have recognized that a domestic industry confronted with dumped imports originating from several countries may be injured by the cumulated effects of those imports, and that those effects may not be adequately taken into account in a country-specific analysis of the injurious effects of dumped imports. Consistent with the rationale behind cumulation, we consider that changes in import volumes from individual countries, and the effect of those country-specific volumes on prices in the importing country’s market, are of little significance in determining whether injury is being caused to the domestic industry by the dumped imports as a whole.(174)”(175)
(c) Conditions for cumulation — appropriate in light of the “conditions of competition” 141. The Panel on EC — Tube or Pipe Fittings examined the nature and scope of the requirement in Article 3.3(b) that a cumulative assessment of the effects of the imports is appropriate in light of the conditions of competition between the imported products and the conditions of competition between the imported products and the like domestic product. It considered that, “[I]n light of the general wording of the provision and the nature of the term ‘appropriate’, an investigating authority enjoys a certain degree of discretion in making that determination on the basis of the record before it. However, it is clear to us that cumulation must be suitable or fitting in the particular circumstances of a given case in light of the particular conditions of competition extant in the marketplace.”(176) 142. The Panel on EC — Tube or Pipe Fittings understood the phrase “conditions of competition” to refer to the dynamic relationship between products in the marketplace and added that this phrase is not accompanied by any sort fo qualifier such as “identical” or “similar”. It concluded that Article 3.3 contains no express indicators by which to assess the “conditions of competition”, much less any fixed rules dictating precisely the relative percentages or levels of such indicators that must be present: “While we note that a broadly parallel evolution and a broadly similar volume and price trend might well indicate that imports may appropriately be cumulated, we find no basis in the text of the Agreement for Brazil’s assertion that ‘only a comparable evolution and a similarity of the significantly increased import volumes and/or the significant price effects … would indicate that these imports might have a joint impact on the situation of the domestic industry and may be assessed cumulatively’. Moreover, the provision contains no express indicators by which to assess the ‘conditions of competition’, much less any fixed rules dictating precisely and exhaustively the relative percentages or levels of such indicators that must be present. Unlike the lists of factors that guide an authority’s examination under, for example, Articles 3.2, 3.4 and 3.5, Article 3.3 does not provide even an indicative list of factors that might be relevant in the assessment called for under that provision, in particular, the assessment of ‘conditions of competition’.(177) We note that Article 3.2 explicitly concentrates on volume and price trends, and that Article 3.3 is neither specific nor limited in this way. Thus, while price and volume considerations may well be relevant in this context, we find no explicit reference thereto in Article 3.3(b).”(178) 143. In EC — Bed Linen, the Panel rejected the argument that “dumped imports” must be understood to refer only to imports which are the subject of transactions in which the export price was below normal value. See paragraph 119 above. 144. The Appellate Body in US — Hot-Rolled Steel ruled that investigating authorities can undertake “an evaluation of particular parts, sectors or segments within a domestic industry”, provided they respect the fundamental obligation in Article 3.1 to conduct an “objective assessment”(179): “… it seems to us perfectly compatible with Article 3.4 for investigating authorities to undertake, or for a Member to require its investigating authorities to undertake, an evaluation of particular parts, sectors or segments within a domestic industry.(180) Such a sectoral analysis may be highly pertinent, from an economic perspective, in assessing the state of an industry as a whole.
However, the investigating authorities’ evaluation of the relevant factors must respect the fundamental obligation, in Article 3.1, of those authorities to conduct an ‘objective examination’. If an examination is to be ‘objective’, the identification, investigation and evaluation of the relevant factors must be even-handed. Thus, investigating authorities are not entitled to conduct their investigation in such a way that it becomes more likely that, as a result of the fact-finding or evaluation process, they will determine that the domestic industry is injured.
Instead, Articles 3.1 and 3.4 indicate that the investigating authorities must determine, objectively, and on the basis of positive evidence, the importance to be attached to each potentially relevant factor and the weight to be attached to it. In every investigation, this determination turns on the ‘bearing’ that the relevant factors have ‘on the state of the [domestic] industry’.”(181) (ii) Domestic producers outside the “sample” 145. In EC — Bed Linen, the Panel examined whether, further to having defined the Community industry as a group of 35 producers and resorted to a sample of those producers, the European Communities was precluded from considering information relating to producers not within that sample, or not within the Community industry.(182) The Panel, in a finding subsequently not addressed by the Appellate Body, resolved the issue whether “consideration of evidence for domestic producers outside the selected sample but within the domestic industry constitutes, ipso facto, a violation of Article 3.4”(183), as follows: “[I]t is clear from the language of the AD Agreement, in particular Articles 3.1, 3.4, and 3.5, that the determination of injury has to be reached for the domestic industry that is the subject of the investigation. … In our view, it would be anomalous to conclude that, because the [investigating Member] chose to consider a sample of the domestic industry, it was required to close its eyes to and ignore other information available to it concerning the domestic industry it had defined. Such a conclusion would be inconsistent with the fundamental underlying principle that anti-dumping investigations should be fair and that investigating authorities should base their conclusions on an objective evaluation of the evidence. It is not possible to have an objective evaluation of the evidence if some of the evidence is required to be ignored, even though it relates precisely to the issues to be resolved. Thus, we consider that the [investigating authority] did not act inconsistently with Articles 3.1, 3.4, and 3.5 of the AD Agreement by taking into account in its analysis information regarding the … industry as a whole, including information pertaining to companies that were not included in the sample.”(184) (iii) Companies outside the domestic industry 146. Regarding the issue of information concerning Article 3.4 factors for companies outside the domestic industry, the Panel on EC — Bed Linen held that information about companies which are not part of the domestic industry “provides no basis for conclusions about the impact of dumped imports on the domestic industry”: “In our view, information concerning companies that are not within the domestic industry is irrelevant to the evaluation of the ‘relevant economic factors and indices having a bearing on the state of the industry’ required under Article 3.4. This is true even though those companies may presently produce, or may have in the past produced, the like product … . Information concerning the Article 3.4 factors for companies outside the domestic industry provides no basis for conclusions about the impact of dumped imports on the domestic industry itself.”(185) 147. The Panel on EC — Tube or Pipe Fittings held that if like product-specific information was not available, investigating authorities could use other broader data: “[W]hile data and information pertaining specifically to the ‘like product’ is to be used to the extent possible, the Agreement also envisages resort to a broader spectrum of data where separate identification of like product specific data is not possible. It is therefore permissible for an investigating authority to assess the effects of the dumped imports by the examination of the production of a broader range of products, which includes the like product, for which the necessary information can be provided if like-product-specific information is not available.”(186) (c) “all relevant economic factors and indices having a bearing on the state of the industry” (i) Mandatory or illustrative nature of the list of factors 148. The Panel on EC — Bed Linen, in a finding not addressed by the Appellate Body(187), considered whether the list of factors in Article 3.4 is illustrative or mandatory. Further to concluding that the list is mandatory, the Panel addressed the issue of whether only the four groups of “factors” represented by the subgroups separated by semicolons in Article 3.4 must be evaluated, or whether each individual factor listed must be considered: “The use of the phrase ‘shall include’ in Article 3.4 strongly suggests to us that the evaluation of the listed factors in that provision is properly interpreted as mandatory in all cases. That is, in our view, the ordinary meaning of the provision is that the examination of the impact of dumped imports must include an evaluation of all the listed factors in Article 3.4. … With regard to the use of the word ‘including’, we consider that this simply emphasises that there may be other ‘relevant factors and indices having a bearing on the state of the industry’ among ‘all’ such factors that must be evaluated. We recall that, in the Tokyo Round AD Code, the same list of factors was preceded by the phrase ‘such as’, which was changed to the word ‘including’ that now appears in Article 3.4 of the AD Agreement. … We thus read the phrase ‘shall include an evaluation of all relevant factors and indices having a bearing on the state of the industry, including …’ as introducing a mandatory list of relevant factors which must be evaluated in every case. The change in the wording that was introduced in the Uruguay Round in our view supports an interpretation of the current text of Article 3.4 as setting forth a list that is mandatory, and not merely indicative or illustrative.
… [I]n our view, neither the presence of semicolons separating certain groups of factors in the text of Article 3.4, nor the presence of the word ‘or’ within the first and fourth of these groups, serves to render the mandatory list in Article 3.4 a list of only four ‘factors’. We further note that the two ‘ors’ appear within — rather than between — the groups of factors separated by semicolons. Thus, we consider that the use of the term ‘or’ here does not detract from the mandatory nature of the textual requirement that ‘all relevant economic factors’ shall be evaluated. With respect to the second ‘or,’ it appears in the phrase ‘ability to raise capital or investments’, which clearly indicates that the factor that an investigating authority must examine is the ‘ability to raise capital’ or the ‘ability to raise investments’, or both. … Based on the foregoing, we conclude that each of the fifteen factors listed in Article 3.4 of the AD Agreement must be evaluated by the investigating authorities in each case in examining the impact of the dumped imports on the domestic industry concerned.”(188) 149. The Panel on Mexico — Corn Syrup confirmed the mandatory nature of the list of factors in Article 3.4. The Panel indicated that, in its view, the language of Article 3.4 makes it clear that the listed factors in Article 3.4 must be considered in all cases “even though such consideration may lead the investigating authority to conclude that a particular factor is not probative in the circumstances of a particular industry or a particular case, and therefore is not relevant to the actual determination. Moreover, the consideration of each of the Article 3.4 factors must be apparent in the final determination of the investigating authority.(189)”(190) 150. The Panel on Thailand — H-Beams, in a finding subsequently explicitly endorsed by the Appellate Body(191), also confirmed that Article 3.4 requires the examination of all the listed factors: “We note Thailand’s argument that the list of factors in Article 3.4 is illustrative only, and that no change in meaning was intended in the change in drafting from the ‘such as’ that appeared in the corresponding provision in the Tokyo Round Antidumping Code to the ‘including’ that now appears in Article 3.4 of the AD Agreement.(192) The term ‘such as’ is defined as ‘[o]f the kind, degree, category being or about to be specified’ … ‘for example’. By contrast, the verb ‘include’ is defined to mean ‘enclose’; ‘contain as part of a whole or as a subordinate element; contain by implication, involve’; or ‘place in a class or category; treat or regard as part of a whole’. We thus read the Article 3.4 phrase ‘shall include an evaluation of all relevant factors and indices having a bearing on the state of the industry, including …’ as introducing a mandatory list of relevant factors which must be evaluated in every case. We are of the view that the change that occurred in the wording of the relevant provision during the Uruguay Round (from ‘such as’ to ‘including’) was made for a reason and that it supports an interpretation of the current text of Article 3.4 as setting forth a list that is not merely indicative or illustrative, but, rather, mandatory.(193)”(194) 151. Also, in support of its proposition referenced in paragraph 150 above, in Thailand — H-Beams, the Panel examined the presence of the word “or” in Article 3.4, but concluded that the use of this word did not serve to detract from the mandatory nature of the list of factors under this provision: “We are of the view that the language in Article 3.4 makes it clear that all of the listed factors in Article 3.4 must be considered in all cases. The provision is specific and mandatory in this regard. We do not consider that the presence of semi-colons separating certain groups of factors in the text of Article 3.4, nor the presence of the word ‘or’ within the first and fourth of these groups serve to render the mandatory list in Article 3.4 a list of only four ‘factors’. We note that the two ‘ors’ appear within — rather than between — the groups of factors separated by semi-colons. The first ‘or’ in Article 3.4 appears at the end of a group of factors that may indicate declines in the domestic industry (i.e. ‘actual and potential decline in sales, profits, output, market share, productivity, return on investments, or utilization of capacity’ (emphasis added)). In our view, the use of the word ‘or’ here is textually linked to the phrase ‘actual and potential decline’, and may indicate that such ‘declines’ need not occur in respect of each and every one of the factors listed in this group in order to support a finding of injury. Thus, we do not consider that the use of the term ‘or’ here detracts from the textual requirement that ‘all relevant economic factors’ be evaluated. Moreover, we note that this first group of factors in Article 3.4 contains factors that all relate to, and are indicative of, the state of the industry.(195)
With respect to the second ‘or,’ we note that it appears in the phrase ‘ability to raise capital or investments’. In our view, this ‘or’ indicates that the factor that an investigating authority must examine is ‘ability to raise capital’ or ‘ability to raise investments’, or both.”(196) 152. In Guatemala — Cement II, the Panel found that in violation of Article 3.4, Guatemala’s authority had not considered certain factors among those enumerated in that Article. In doing so, the Panel agreed with the finding of the Panel on Mexico — Corn Syrup referenced in paragraph 149 above. In further support of its finding, the Panel also noted a finding of the Panel on Korea — Dairy with respect to Article 4.2 of the Agreement on Safeguards, “which is very similar to Article 3.4 of the AD Agreement.”(197) 153. The Panel on EC — Bed Linen (Article 21.5 — India) underlined that “there is no requirement in Article 3.4 that each and every injury factor, individually, must be indicative of injury”.(198) The Panel concluded that: “[….] an analysis of injury does not rest on the evaluation of the Article 3.4 factors individually, or in isolation. Nor is it necessary that all factors show negative trends or declines. Rather, the analysis and conclusions must consider each factor, determine the relevance of each factor, or lack thereof, to the analysis, and consider the relevant factors together, in the context of the particular industry at issue, to make a reasoned conclusion as to the state of the domestic industry.”(199) (ii) Other factors not listed in Article 3.4 154. The Panel on Mexico — Corn Syrup indicated that, in a particular case, the examination of relevant economic factors other than those listed in Article 3.4 could be required: “In our view, this language [of Article 3.4] makes it clear that the listed factors in Article 3.4 must be considered in all cases. There may be other relevant economic factors in the circumstances of a particular case, consideration of which would also be required. In a threat of injury case, for instance, the AD Agreement itself establishes that consideration of the Article 3.7 factors is also required …”(200) 155. In US — Hot-Rolled Steel, the Appellate Body ruled that the obligation of evaluation that Article 3.4 imposes on investigating authorities is not confined to the listed factors, but extends to “all relevant economic factors”: “Article 3.4 lists certain factors which are deemed to be relevant in every investigation and which must always be evaluated by the investigating authorities.(201) However, the obligation of evaluation imposed on investigating authorities, by Article 3.4, is not confined to the listed factors, but extends to ‘all relevant economic factors’. We see nothing in the Anti-Dumping Agreement which prevents a Member from requiring that its investigating authorities examine, in every investigation, the potential relevance of a particular ‘other factor’, not listed in Article 3.4, as part of its overall ‘examination’ of the state of the domestic industry.”(202) 156. In Egypt — Steel Rebar, the Panel rejected Turkey’s argument that Article 3.4 required a full causation analysis, including a non-attribution analysis, which, according to the Panel, stemmed from Turkey’s reading of the words “having a bearing on” as having to do exclusively with causation: “Turkey’s argument that Article 3.4 requires a full ‘non-attribution’ analysis appears to stem from its reading of the term ‘having a bearing on’ as having to do exclusively with causation, (i.e., as meaning factors having an effect on the state of the industry). There is another meaning of this term which we find more pertinent in the overall context of Article 3.4, however. In particular, the term ‘having a bearing on’ can mean relevant to or having to do with the state of the industry(203), and this meaning is consistent with the fact that many of the factors listed in Article 3.4 are descriptors or indicators of the state of the industry, rather than being factors having an effect thereon. For example, sales levels, profits, output, etc. are not in themselves causes of an industry’s condition. They are, rather, among the factual indicators by which that condition can be judged and assessed as injured or not. Put another way, taken as a whole, these factors are more in the nature of effects than causes.
This reading of ‘having a bearing on’ finds contextual support in the wording of the last group of factors in Article 3.4, namely ‘actual and potential negative effects on cash flow, inventories, …’ (emphasis added). Further contextual support is found in the cross-reference to Article 3.4 contained in the first sentence of Article 3.5: ‘… the effects of dumping as set forth in paragraph [] 4 [of Article 3]’.(emphasis added)
We note in addition that if Turkey were correct that the full causation analysis, including non-attribution, were required by Article 3.4, this would effectively render redundant Article 3.5, which explicitly addresses causation, including non-attribution. Such an outcome would not be in keeping with the relevant principles of international treaty law interpretation, or with consistent practice in WTO dispute settlement.(204)”(205) (d) Evaluation of relevant factors 157. In Thailand — H-Beams, the Panel opined that each of the factors listed in Article 3.4 must be evaluated, not merely as to whether it is “relevant” or “irrelevant”, but on the basis of a “thorough evaluation” of the state of the industry at issue. While the Appellate Body in Thailand — H-Beams explicitly endorsed the Panel’s finding that consideration of all factors listed under Article 3.4 is mandatory, it did not address this particular finding: “… Article 3.4 requires the authorities properly to establish whether a factual basis exists to support a well-reasoned and meaningful analysis of the state of the industry and a finding of injury. This analysis does not derive from a mere characterization of the degree of ‘relevance or irrelevance’ of each and every individual factor, but rather must be based on a thorough evaluation of the state of the industry and, in light of the last sentence of Article 3.4(206), must contain a persuasive explanation as to how the evaluation of relevant factors led to the determination of injury.”(207) 158. In Egypt — Steel Rebar, the Panel faced the question of whether the mere presentation of tables of data, without more, constitutes an “evaluation” in the sense of Article 3.4. Egypt had gathered data on all of the listed factors but could not adduce sufficient evidence of its authorities’ evaluation of all those factors. The Panel considered that “the ‘evaluation’ to which Article 3.4 refers is the process of analysis and interpretation of the facts established in relation to each listed factor”. Since, in spite of having gathered data on all of the factors listed in Article 3.4, the Egyptian investigating authority failed to evaluate a number of listed factors, the Panel found that Egypt acted inconsistently with Article 3.4:(208) “We first consider the ordinary meaning of the word ‘evaluation’. The Oxford English Dictionary defines ‘evaluation’ as follows:
‘(1) The action of appraising or valuing (goods, etc.); a calculation or statement of value. (2) The action of evaluating or determining the value of (a mathematical expression, a physical quantity, etc.), or of estimating the force of (probabilities, evidence).’(209)(emphasis added)
The Merriam-Webster’s Collegiate Dictionary defines ‘evaluation’ as follows:
‘(1) To determine or fix the value of. (2) To determine the significance, worth, or condition of usually by careful appraisal or study.’(210) (emphasis added)
The Merriam-Webster’s Thesaurus lists as synonyms for ‘evaluation’ the following:
‘(1) appraisal, appraisement, assessment, estimation, valuation (with related words: interpreting; judging, rating);(2) appraisal, appraisement, assessment, estimate, judgement, stock (with related words: appreciation; interpretation; decision).’(211)
We find significant that all of these definitions and synonyms connote, particularly in the context of ‘evaluation’ of evidence, the act of analysis, judgement, or assessment. That is, the first definition recited above refers to ‘estimating the force of’ evidence, evoking a process of weighing evidence and reaching conclusions thereon. The second definition recited above — to determine the significance, worth, or condition of, usually by careful appraisal or study — confirms this meaning. Thus, for an investigating authority to ‘evaluate’ evidence concerning a given factor in the sense of Article 3.4, it must not only gather data, but it must analyze and interpret those data.
We nevertheless do recognize that, in addition to the dictionary meanings of ‘evaluation’ that we have cited, the definitions set forth above also refer to a purely quantitative process (i.e., calculating, stating, determining or fixing the value of something). If this were the definition applicable to the word ‘evaluation’ as used in Article 3.4, arguably mere compilation of data on the listed factors, without any narrative explanation or analysis, might suffice to satisfy the requirements of Article 3.4. We find, however, contextual support in Article 17.6(i) of the AD Agreement for our reading that ‘evaluation’ is something different from, and more than, simple compilation of tables of data. We recognize that Article 17.6(i) does not apply directly to investigating authorities, and that instead, it is part of the standard of review to be applied by panels in reviewing determinations of investigating authorities. However, Article 17.6(i) identifies as the object of a panel’s review two basic components of a determination: first, the investigating authority’s ‘establishment of the facts’, and second, the investigating authority’s ‘evaluation of those facts’. Thus, Article 17.6(i)’s characterization of the essential components of a determination juxtaposes ‘establishment of the facts’ with the ‘evaluation of those facts’. That panels are instructed to determine whether an investigating authority’s ‘establishment of the facts’ was proper connotes an assessment by the panel of the means by which the data before the investigating authority were gathered and compiled. By contrast, the fact that panels are instructed to determine whether an investigating authority’s ‘evaluation of those facts’ was objective and unbiased, provides further support for our view that the ‘evaluation’ to which Article 3.4 refers is the process of analysis and interpretation of the facts established in relation to each listed factor.”(212) 159. A similar view was expressed by the Panel on EC — Tube or Pipe Fittings. The Panel considered that “an evaluation of a factor, in our view, is not limited to a mere characterisation of its relevance or irrelevance. Rather, we believe that an ‘evaluation’ also implies the analysis of data through placing it in context in terms of the particular evolution of the data pertaining to each factor individually, as well as in relation to other factors examined”.(213) According to the Panel, “a meaningful investigation must also take into account the actual intervening trends in each of the injury factors and indices — rather than just a comparison of ‘end-points’. There must a streamlined, genuine and undistorted picture drawn from the facts before the investigating authority. Only on the basis of such a thorough and dynamic evaluation of data capturing the current state of the industry in the determination would a reviewing panel be able to assess whether the conclusions drawn from the examination are those of an unbiased and objective authority”.(214) (ii) Evaluation of all listed factors Evaluation of all listed factors must be apparent in the authorities’ conclusions 160. The Panel on EC — Bed Linen, in a finding not specifically addressed by the Appellate Body, stated that the evaluation of all the factors by the investigating authorities must be apparent in the final determination: “[W]hile the authorities may determine that some factors are not relevant or do not weigh significantly in the decision, the authorities may not simply disregard such factors, but must explain their conclusion as to the lack of relevance or significance of such factors. … [W]e are of the view that every factor in Article 3.4 must be considered, and that the nature of this consideration, including whether the investigating authority considered the factor relevant in its analysis of the impact of dumped imports on the domestic industry, must be apparent in the final determination.”(215) 161. Similarly, the Panel on Guatemala — Cement II stated that “the consideration of the factors in Article 3.4 must be apparent in the determination so the Panel may assess whether the authority acted in accordance with Article 3.4 at the time of the investigation.” (216) 162. On the other hand, in its Report on EC — Tube or Pipe Fittings, the Appellate Body stated that Article 3.4 “requires an investigating authority to evaluate all relevant economic factors in its examination of the impact of the dumped imports. By its terms, it does not address the manner in which the results of this evaluation are to be set out, nor the type of evidence that may be produced before a panel for the purpose of demonstrating that this evaluation was indeed conducted”(217). In other words, the Appellate Body considered that the text of Article 3.4 “does not address the manner in which the results of the investigating authority’s analysis of each injury factor are to be set out in the published documents”(218). This led the Appellate Body to reject Brazil’s claims that the absence of an explicit evaluation in the published record of the investigation of one of the factors of Article 3.4 — i.e. the factor “growth” — was inconsistent with Article 3.4: “Accordingly, because Articles 3.1 and 3.4 do not regulate the manner in which the results of the analysis of each injury factor are to be set out in the published documents, we share the Panel’s conclusion that it is not required that in every anti-dumping investigation a separate record be made of the evaluation of each of the injury factors listed in Article 3.4. Whether a panel conducting an assessment of an anti-dumping measure is able to find in the record sufficient and credible evidence to satisfy itself that a factor has been evaluated, even though a separate record of the evaluation of that factor has not been made, will depend on the particular facts of each case. Having said this, we believe that, under the particular facts of this case, it was reasonable for the Panel to have concluded that the European Commission addressed and evaluated the factor ‘growth’.
Having regard to the nature of the factor ‘growth’, we believe that an evaluation of that factor necessarily entails an analysis of certain other factors listed in Article 3.4. Consequently, the evaluation of those factors could cover also the evaluation of the factor ‘growth’.”(219) 163. The Panel on EC — Bed Linen (Article 21.5 — India) addressed the question of the adequacy of the evaluation in the case of a redetermination by the investigating authority in order to implement a recommendation by the DSB to bring the measure into conformity. In doing so, the Panel made the following finding: “With respect to the adequacy of the evaluation of the elements as an overall matter, we look to the explanation of the EC regarding its conclusions, based on the combination of elements discussed in the original determination and redetermination. While this is perhaps less straightforward than we might wish, it is clear to us that merely because the redetermination confirms or adopts certain findings made in the original determination does not demonstrate a failure to carry out an overall evaluation of the information in making the injury redetermination.”(220) 164. In EC — Bed Linen, the European Community objected to what it termed the “checklist” approach to the list of factors under Article 3.4 and argued that the relevance of some factors may be apparent early in the investigation. The Panel, in a finding not reviewed by the Appellate Body, concluded that “as long as the lack of relevance or materiality of the factors not central to the decision is at least implicitly apparent from the final determination, the Agreement’s requirements are satisfied. While a checklist would perhaps increase an authority’s and a panel’s confidence that all factors were considered, we believe that it is not a required approach to decision-making under Article 3.4.”(221) 165. In US — Hot-Rolled Steel, the issue was whether the US investigating authority had violated Article 3.4 by failing to explicitly discuss, in its determination, certain factors for each year of the period of investigation. In that case, according to the Panel, the authority had discussed each of the factors for the final two years of the three-year period of investigation, and only some of them for the first year of that period. The Panel found that the determination explained the particular relevance of the second and third years of the period, and that the authority’s failure to explicitly address each factor in its discussion of the first year of the period did not constitute a violation of Article 3.4.(222) The Panel thus found that each of the listed Article 3.4 factors was explicitly discussed in the authority’s determination, and given the explanations provided in that determination for the particular emphasis on a part of the period of investigation, the evaluation of the facts was deemed adequate by the panel.(223) Relevance of written record of authorities’ evaluation 166. In Egypt — Steel Rebar, Egypt had gathered data on all of the listed factors but could not adduce sufficient evidence of its authorities’ evaluation of all those factors on its written analysis. See paragraph 158 above. The Panel stressed the importance of the written record in the context of an anti-dumping investigation for burden of proof purposes. “Here we must emphasize that in the context of an antidumping investigation, which is by definition subject to multilateral rules and multilateral review, a Member is placed in a difficult position in rebutting a prima facie case that an evaluation has not taken place if it is unable to direct the attention of a panel to some contemporaneous written record of that process. If there is no such written record — whether in the disclosure documents, in the published determination, or in other internal documents — of how certain factors have been interpreted or appreciated by an investigating authority during the course of the investigation, there is no basis on which a Member can rebut a prima facie case that its ‘evaluation’ under Article 3.4 was inadequate or did not take place at all. In particular, without a written record of the analytical process undertaken by the investigating authority, a panel would be forced to embark on a post hoc speculation about the thought process by which an investigating authority arrived at its ultimate conclusions as to the impact of the dumped imports on the domestic industry. A speculative exercise by a panel is something that the special standard of review in Article 17.6 is intended to prevent. Thus, while Egypt attempts to derive support from the panel report in the US — Hot-Rolled Steel dispute for its position that Article 3.4 does not require an explicit written analysis of all of the factors listed therein(224), to us, the findings in that dispute confirms our interpretation, in that what was at issue, was the substantive adequacy of the authority’s written analysis of each of those factors.”(225) 167. In Egypt — Steel Rebar, the Panel rejected the argument of one of the parties whereby the requirement of a written analysis of the Article 3.4 factors would be exclusively governed by Article 12 of the Anti-Dumping Agreement: “Nor do we consider, as suggested by Egypt [footnote omitted], that the requirement of a written analysis of the Article 3.4 factors is exclusively governed by Article 12 of the AD Agreement (public notice and explanation of determinations). While Article 12 contains a requirement to publish, and to make available to the interested parties in the investigation, some form of a report on the investigating authority’s determination, this is, as the Appellate Body has noted, a procedural requirement having to do with due process(226), rather than with the relevant substantive analytical requirements (which in the context of this claim are found in Article 3.4).”(227) Evaluation of specific listed factors 168. In Egypt — Steel Rebar, Turkey claimed that Egypt had violated Article 3.4 because its investigating authorities had not examined all factors affecting profits. The Panel disagreed: “We recall that Turkey’s claim is that Egypt violated Article 3.4 because the IA did not examine all factors affecting profits, and did not examine all factors affecting domestic prices. The above text indicates to us, however, a different requirement on an investigating authority. In particular, the text is straightforward in that the requirement is to examine all relevant factors and indices having a bearing on the state of the industry. The text then lists a variety of such factors and indices that are presumptively relevant to the investigation and must be examined, one of which is ‘profits’. The text does not say, as argued by Turkey, ‘all factors affecting profits’. To us, this text means that in its evaluation of the state of the industry, an investigating authority must include an analysis of the domestic industry’s profits. Turkey has raised no claim that the IA failed to conduct such an analysis in the rebar investigation.”(228) “factors affecting domestic prices” 169. In Egypt — Steel Rebar, Turkey claimed that Egypt had violated Article 3.4 because its investigating authorities had not examined all factors affecting prices. The Panel disagreed: “We recall that Turkey’s claim is that Egypt violated Article 3.4 because the IA did not examine … all factors affecting domestic prices.
… Here again, we note that contrary to Turkey’s argument, the text does not read ‘all factors affecting domestic prices’. Rather, what is required is that there be an evaluation of factors affecting domestic prices. This requirement is clearly linked to the requirements of Articles 3.1 and 3.2 for an ‘objective examination’ of ‘the effect of dumped imports on prices in the domestic market for like products’…
In our view, this means that in its evaluation of the state of the industry, an investigating authority must in every case include a price analysis of the type required by Articles 3.1 and 3.2. Turkey has raised no claim that the IA failed to conduct such an analysis in the rebar investigation. In addition, in our view, an investigating authority must consider generally the question of ‘factors affecting domestic prices’…”(229) 170. The Panel on EC — Tube or Pipe Fittings stated that it saw “no basis in the text of the Agreement for Brazil’s argument that would require an analysis of factors affecting domestic prices beyond an Article 3.2 price analysis, and observe that certain of the factors potentially affecting price may be more in the way of causal factors to be analysed under Article 3.5, rather than under 3.4.”(230) 171. In Egypt — Steel Rebar, the Panel considered that Article 3.4 threshold as regards addressing the factor “growth” had been satisfied by Egypt since its authorities had addressed sales volume and market share in their final determinations.(231) (e) Relationship with other paragraphs of Article 3 172. With respect to the relationship of paragraph 4 with paragraphs 1, 2, 3 and 5 of Article 3, see paragraphs 100–101 above. 173. With respect to the relationship between Article 3.4 and Article 3.7, see paragraphs 195–196 below. (a) Article 3.5 requirements for investigating authorities 174. In US — Hot-Rolled Steel, the Appellate Body laid down the requirements that Article 3.5 imposes on the investigating authorities when performing a causation analysis as follows: “This provision requires investigating authorities, as part of their causation analysis, first, to examine all ‘known factors’, ‘other than dumped imports’, which are causing injury to the domestic industry ‘at the same time’ as dumped imports. Second, investigating authorities must ensure that injuries which are caused to the domestic industry by known factors, other than dumped imports, are not ‘attributed to the dumped imports.’ (emphasis added)”(232) (b) Scope of the non-attribution language in Article 3.5 175. The Appellate Body in US — Hot-Rolled Steel delimitated the situations where the non-attribution language of Article 3.5 plays a role. In this regard, the Appellate Body specified that this language applies “solely [to] situations where dumped imports and other known factors are causing injury to the domestic industry at the same time”.(233) 176. In EC — Bed Linen, the Panel rejected the argument that “dumped imports” must be understood to refer only to imports which are the subject of transactions in which the export price was below normal value. See paragraph 119 above. (d) “any known factors other than dumped imports” 177. On the issue of what are “known factors” other than the dumped imports, the Panel on Thailand — H-Beams, in a finding not reviewed by the Appellate Body, found that other “known factors” would include factors “clearly raised before the investigating authorities by interested parties in the course of an AD investigation” and that investigating authorities are not required to seek out such factors on their own initiative: “We consider that other ‘known’ factors would include those causal factors that are clearly raised before the investigating authorities by interested parties in the course of an AD investigation. We are of the view that there is no express requirement in Article 3.5 AD that investigating authorities seek out and examine in each case on their own initiative the effects of all possible factors other than imports that may be causing injury to the domestic industry under investigation.(234) … We note that there may be cases where, at the time of the investigation, a certain factor may be ‘known’ to the investigating authorities without being known to the interested parties. In such a case, an issue might arise as to whether the authorities would be compelled to examine such a known factor that is affecting the state of the domestic industry. However, it has not been argued that such factors are present in this case.”(235) 178. The Appellate Body on EC — Tube or Pipe Fittings disagreed with the Panel’s understanding of the term “known” in Article 3.5. The Panel had considered that the alleged causal factor was “known” to the European Commission in the context of its dumping and injury analyses, but that the factor was nevertheless not “known” in the context of its causality analysis.(236) The Appellate Body disagreed with this approach and considered that “a factor is either ‘known’ to the investigating authority, or it is not ‘known’; it cannot be ‘known’ in one stage of the investigation and unknown in a subsequent stage.”(237) 179. In Guatemala — Cement II, the Panel agreed with Mexico’s claim that Guatemala’s authority failed to take into account certain undumped imports, and accordingly, failed to assess other factors which were injuring the domestic industry at the same time, in violation of Article 3.5.(238) (ii) Illustrative list of known factors 180. In Thailand — H-Beams, in a finding not reviewed by the Appellate Body, the Panel further stated that “[t]he text of Article 3.5 indicates that the list of other possible causal factors enumerated in that provision is illustrative.”(239) (e) Non-attribution methodology 181. In US — Hot-Rolled Steel, the Appellate Body considered that the Panel had erred in its interpretation of the non-attribution language by finding that this language does not require the investigating authorities to separate and distinguish the injurious effects of the other known causal factors from the injurious effects of the dumped imports. The Panel had followed the interpretive approach set forth by the GATT Panel in US — Norwegian Salmon AD which the Appellate Body thus also presumably considered erroneous. The Appellate Body ruled that “in order to comply with the non-attribution language in that provision, investigating authorities must make an appropriate assessment of the injury caused to the domestic industry by the other known factors, and they must separate and distinguish the injurious effects of the dumped imports from the injurious effects of those other factors. This requires a satisfactory explanation of the nature and extent of the injurious effects of the other factors, as distinguished from the injurious effects of the dumped imports”:(240) “The non-attribution language in Article 3.5 of the Anti-Dumping Agreement applies solely in situations where dumped imports and other known factors are causing injury to the domestic industry at the same time. In order that investigating authorities, applying Article 3.5, are able to ensure that the injurious effects of the other known factors are not ‘attributed’ to dumped imports, they must appropriately assess the injurious effects of those other factors. Logically, such an assessment must involve separating and distinguishing the injurious effects of the other factors from the injurious effects of the dumped imports. If the injurious effects of the dumped imports are not appropriately separated and distinguished from the injurious effects of the other factors, the authorities will be unable to conclude that the injury they ascribe to dumped imports is actually caused by those imports, rather than by the other factors. Thus, in the absence of such separation and distinction of the different injurious effects, the investigating authorities would have no rational basis to conclude that the dumped imports are indeed causing the injury which, under the Anti-Dumping Agreement, justifies the imposition of anti-dumping duties.
We emphasize that the particular methods and approaches by which WTO Members choose to carry out the process of separating and distinguishing the injurious effects of dumped imports from the injurious effects of the other known causal factors are not prescribed by the Anti-Dumping Agreement. What the Agreement requires simply that the obligations in Article 3.5 be respected when a determination of injury is made.”(241) 182. The Appellate Body in US — Hot-Rolled Steel acknowledged the practical difficulty of separating and distinguishing the injurious effects of different causal factors but indicated that “although this process may not be easy, this is precisely what is envisaged by the non-attribution language. If the injurious effects of the dumped imports and the other known factors remain lumped together and indistinguishable, there is simply no means of knowing whether injury ascribed to dumped imports was, in reality, caused by other factors. Article 3.5, therefore, requires investigating authorities to undertake the process of assessing appropriately, and separating and distinguishing, the injurious effects of dumped imports from those of other known causal factors.”(242) 183. The Appellate Body in US — Hot-Rolled Steel supported its interpretation of the non-attribution language of Article 3.5 by referring to its decisions in two safeguards Reports, US — Wheat Gluten and US — Lamb where it interpreted the non-attribution language in Article 4.2(b) of the Agreement on Safeguards in a similar manner.(243) 184. The Appellate Body on EC — Tube or Pipe Fittings addressed the question whether the non-attribution language of Article 3.5 requires an investigating authority, in conducting its causality analysis, to examine the effects of the other causal factors collectively after having examined them individually. The Appellate Body first reiterated its basic view that non-attribution requires separation and distinguishing of the effects of other causal factors from those of the dumped imports so that injuries caused by the dumped imports and those caused by other factors are not “lumped together” and made “indistinguishable”. It further stated that “provided that an investigating authority does not attribute the injuries of other causal factors to dumped imports, it is free to choose the methodology it will use in examining the ‘causal relationship’ between dumped imports and injury.”(244) On this basis, the Appellate Body did not find that “an examination of collective effects is necessarily required by the non-attribution language of the Anti-Dumping Agreement. In particular, we are of the view that Article 3.5 does not compel, in every case, an assessment of the collective effects of other causal factors, because such an assessment is not always necessary to conclude that injuries ascribed to dumped imports are actually caused by those imports and not by other factors.”(245) At the same time, the Appellate Body recognized that “there may be cases where, because of the specific factual circumstances therein, the failure to undertake an examination of the collective impact of other causal factors would result in the investigating authority improperly attributing the effects of other causal factors to dumped imports”.(246) (f) Relationship with other paragraphs of Article 3 185. With respect to the relationship of paragraph 5 with paragraphs 1, 2, 3 and 4 of Article 3, see paragraphs 100–101 above. (a) Domestic industry production 186. The Panel on Mexico — Corn Syrup addressed the issue of allowing the determination of injury on the basis of the portion of the domestic industry’s production sold in one sector of the domestic market, as follows: “Article 3.6 does not, on its face, allow the determination of injury or threat of injury on the basis of the portion of the domestic industry’s production sold in one sector of the domestic market, rather than on the basis of the industry as a whole. Indeed, Article 3.6 relates to a situation different from that at issue here. Article 3.6 provides for the situation where information concerning the production of the like product, such as producers’ profits and sales, cannot be separately identified. In such cases, Article 3.6 allows the authority to consider information concerning production of a broader product group than the like product produced by the domestic industry, which includes the like product, in evaluating the effect of imports. Nothing in Article 3.6 allows the investigating authority to consider information concerning production of a product sub-group that is narrower than the like product produced by the domestic industry. In particular, nothing in Article 3.6 allows the investigating authority to limit its examination of injury to an analysis of the portion of domestic production of the like product sold in the particular market sector where competition with the dumped imports is most direct.”(247) 187. In US — Hot-Rolled Steel, the Appellate Body examined whether the investigating authorities could make a sectoral examination of the domestic industry. See paragraphs 116 and 144 above. 9. Article 3.7:Threat of material injury 188. In Egypt — Steel Rebar, the Panel considered that the text of Article 3.7 makes explicit that the central question in a threat of injury investigation is whether there will be a “change in circumstances” that would cause the dumping to begin to injure the domestic industry: “[T]he text of this provision makes explicit that in a threat of injury investigation, the central question is whether there will be a ‘change in circumstances’ that would cause the dumping to begin to injure the domestic industry. Solely as a matter of logic, it would seem necessary, in order to assess the likelihood that a particular change in circumstances would cause an industry to begin experiencing present material injury, to know about the condition of the domestic industry at the outset. For example, if an industry is increasing its production, sales, employment, etc., and is earning a record level of profits, even if dumped imports are increasing rapidly, presumably it would be more difficult for an investigating authority to conclude that it is threatened with imminent injury than if its production, sales, employment, profits and other indicators are low and/or declining.”(248) 189. The Panel on US — Softwood Lumber VI after first noting that the text of Article 3.7 concerning “change of circumstances” is “not a model of clarity” (249), went on to find that Articles 3.7 and 15.7 required that some change in circumstances must be both foreseen and imminent and that this change of circumstances would lead to a situation in which injury would occur: “[T]he relevant ‘change in circumstances’ referred to in Articles 3.7 and 15.7 is one element to be considered in making a determination of threat of material injury. However, we can find no support for the conclusion that such a change in circumstances must be identified as a single or specific event. Rather, in our view, the change in circumstances that would give rise to a situation in which injury would occur encompasses a single event, or a series of events, or developments in the situation of the industry, and/or concerning the dumped or subsidized imports, which lead to the conclusion that injury which has not yet occurred can be predicted to occur imminently.”(250) (b) Requirement to “consider” factors of Article 3.7 190. The Panel on US — Softwood Lumber VI was of the view that while investigating authorities are not required to make an explicit determination with respect to factors considered under Articles 3.7 and 15.7, they must however do more than simply recite the facts in the abstract: “[I]n order to conclude that the investigating authorities have ‘considered’ the factors set out in Articles 3.7 and 15.7, it must be apparent from the determination before us that the investigating authorities have given attention to and taken into account those factors. That consideration must go beyond a mere recitation of the facts in question, and put them into context. However, the investigating authorities are not required by Articles 3.7 and 15.7 to make an explicit ‘finding’ or ‘determination’ with respect to the factors considered.”(251) 191. Moreover, according to the Panel on US — Softwood Lumber VI, due to the use of the word “should” in Article 3.7, consideration of each of the factors listed in Articles 3.7 and 15.7 is not mandatory: “Whether a violation existed would depend on the particular facts of the case, in light of the totality of the factors considered and the explanations given. In this case, it is clear from the face of the determination that the USITC in fact addressed the facts concerning each of the factors set out in Articles 3.7 and 15.7 of the Agreements. Indeed, Canada does not argue that any relevant factor was ignored by the USITC, or not addressed in the determination. Thus, we cannot conclude that the USITC failed to consider the factors set forth in Articles 3.7 and 15.7, in the sense of not taking them into account at all.”(252) 192. The Panel on US — Softwood Lumber VI hastened to add that the fact that the Article 3.7 factors were “considered” does not answer the question “whether the USITC’s overall determination of a threat of material injury is consistent with the requirement of Articles 3.7 that the totality of the factors considered lead to the conclusion that further dumped and subsidized exports are imminent and that, unless protective action was taken, material injury would occur”.(253) (c) Article 3.7(i): “likelihood of substantially increased importation” 193. The Panel on Mexico — Corn Syrup found that the investigating authority had failed to adequately address the likelihood of substantially increased imports by failing to properly evaluate the facts concerning, and to provide a reasoned explanation of its conclusions regarding the potential effects of the alleged restraint agreement. The Panel considered as follows:(254) “In our view, the question for purposes of an antidumping investigation is not whether an alleged restraint agreement in violation of Mexican law existed, an issue which might well be beyond the jurisdiction of an anti-dumping authority to resolve, but whether there was evidence of and arguments concerning the effect of the alleged restraint agreement(255), which, if it existed, would be relevant to the analysis of the likelihood of increased dumped imports in the near future. If the latter is the case, in our view, the investigating authority is obliged to consider the effects of such an alleged agreement, assuming it exists.”(256) (d) Analysis of the “consequent impact” of dumped imports on the domestic industry 194. The Panel on Mexico — Corn Syrup considered the requirements imposed upon investigating authorities in a determination of a “threat of injury” under Article 3.7. One of the issues which arose in this context was whether a specific analysis of the consequent impact of the dumped imports on the domestic industry is required in a threat of injury determination. Referring to Article 3.7, the Panel stated that “[t]his language, in our view, recognizes that factors other than those set out in Article 3.7 itself will necessarily be relevant to the determination.” (257) The Panel concluded that “an analysis of the consequent impact of imports is required in a threat of material injury determination”: “[I]t is clear that in making a determination regarding the threat of material injury, the investigating authority must conclude that ‘material injury would occur’ (emphasis added) in the absence of an anti-dumping duty or price undertaking. A determination that material injury would occur cannot, in our view, be made solely on the basis of consideration of the Article 3.7 factors. Rather, it must include consideration of the likely impact of further dumped imports on the domestic industry.
While an examination of the Article 3.7 factors is required in a threat of injury case, that analysis alone is not a sufficient basis for a determination of threat of injury, because the Article 3.7 factors do not relate to the consideration of the impact of the dumped imports on the domestic industry. The Article 3.7 factors relate specifically to the questions of the likelihood of increased imports (based on the rate of increase of imports, the capacity of exporters to increase exports, and the availability of other export markets), the effects of imports on future prices and likely future demand for imports, and inventories. They are not, in themselves, relevant to a decision concerning what the ‘consequent impact’ of continued dumped imports on the domestic industry is likely to be. However, it is precisely this latter question — whether the ‘consequent impact’ of continued dumped imports is likely to be material injury to the domestic industry — which must be answered in a threat of material injury analysis. Thus, we conclude that an analysis of the consequent impact of imports is required in a threat of material injury determination.”(258) 195. Having established that an analysis of the impact of imports on the domestic industry is required also in the context of the determination of a “threat of injury”, the Panel on Mexico — Corn Syrup held that this analysis is to be performed pursuant to Article 3.4, since “[n]othing in the text or context of Article 3.4 limits consideration of the Article 3.4 factors to cases involving material injury”: “Turning to the question of the nature of the analysis required, we note that Article 3.4 of the AD Agreement sets forth factors to be evaluated in the examination of the impact of dumped imports on the domestic industry. Nothing in the text or context of Article 3.4 limits consideration of the Article 3.4 factors to cases involving material injury. To the contrary, as noted above, Article 3.1 requires that a determination of ‘injury’, which includes threat of material injury, involve an examination of the impact of imports, while Article 3.4 sets forth factors relevant to that examination. Article 3.7 requires that the investigating authorities determine whether, in the absence of protective action, material injury would occur. In our view, consideration of the Article 3.4 factors in examining the consequent impact of imports is required in a case involving threat of injury in order to make a determination consistent with the requirements of Articles 3.1 and 3.7.”(259) 196. The Panel on Mexico — Corn Syrup concluded that consideration of the factors in Article 3.4 “is necessary in order to establish a background against which the investigating authority can evaluate whether imminent further dumped imports will affect the industry’s condition in such a manner that material injury would occur in the absence of protective actions, as required by Article 3.7.”(260) It further indicated that “[t]he text of the AD Agreement requires consideration of the Article 3.4 factors in a threat determination. Article 3.7 sets out additional factors that must be considered in a threat case, but does not eliminate the obligation to consider the impact of dumped imports on the domestic industry in accordance with the requirements of Article 3.4”.(261) 197. The Panel on US — Softwood Lumber VI agreed with the views expressed by the Panel on Mexico — Corn Syrup (see paragraph 196 above), while emphasizing at the same time that there is no requirement under Article 3.7 to conduct a second Article 3.4 analysis: “It seems clear to us that, as the Panel found in Mexico — Corn Syrup, there must, in every case in which threat of material injury is found, be an evaluation of the condition of the industry in light of the Article 3.4/15.4 factors to establish the background against which the impact of future dumped/subsidized imports must be assessed, in addition to an assessment of specific threat factors. However, once such an analysis has been carried out, we do not read the relevant provisions of the Agreements to require an assessment of the likely impact of future imports by reference to a consideration of projections regarding each of the Article 3.4/15.4 factors. There is certainly nothing in the text of either Article 3.7 of the AD Agreement and Article 15.7 of the SCM Agreement, or Article 3.4 of the AD Agreement and Article 15.4 of the SCM Agreement, setting out an obligation to conduct a second analysis of the injury factors in cases involving threat of material injury. Of course, such an assessment could be undertaken, to the extent available information permitted, and might be useful. However, in many instances, it seems likely that the necessary information would not be available, for instance projected productivity, return on investment, projected cash flow, etc. Even if projections are made on the basis of the information gathered in the investigation, this might result in a degree of speculation in the decision–making process, which is not consistent with the requirements of the Agreements.”(262) 198. The Panel on US — Softwood Lumber VI came to a similar conclusion with respect to the absence of a requirement for a second Article 3.2 analysis: “With respect to the factors set out in Article 3.2 of the AD Agreement and Article 15.2 of the SCM Agreement, we see even less basis for concluding that they must be directly considered in a ‘predictive’ context in making a threat of material injury determination. These provisions require the investigating authorities to consider events in the past, during the period investigated, in making a determination regarding present material injury. Thus, the text directs the investigating authorities to consider whether there ‘has been’ a significant increase in imports, whether there ‘has been’ significant price undercutting, or whether the effect of imports is otherwise to depress prices or prevent price increases which otherwise ‘would have’ occurred. As with the consideration of the Article 3.4/15.4 factors, the consideration of the Article 3.2/15.2 factors forms part of the background against which the investigating authorities can evaluate the effects of future dumped and/or subsidized imports.(263)”(264) (e) Distinction between the roles of the investigating authorities and the Panel 199. In Mexico — Corn Syrup (Article 21.5 — US), Mexico had requested the Appellate Body to reverse the finding of the Panel regarding the likelihood of increased imports on the grounds that the Panel had wrongly interpreted Article 3.7 of the Anti-Dumping Agreement and incorrectly applied the standard of review prescribed by Articles 17.5 and 17.6 of that Agreement. The Appellate Body drew the line between the roles of the investigating authorities and the panel in respect to Article 3.7 of the Anti-Dumping Agreement as follows: “In previous anti-dumping cases, we have emphasized the importance of distinguishing between the different roles of panels and investigating authorities.(265) We note, in this regard, that Article 3.7 of the Anti-Dumping Agreement sets forth a number of requirements that must be respected in order to reach a valid determination of a threat of material injury. The third sentence of Article 3.7 explicitly recognizes that it is the investigating authorities who make a determination of threat of material injury, and that such determination — by the investigating authorities — ‘must be based on facts and not merely on allegation, conjecture or remote possibility’. Consequently, Article 3.7 is not addressed to panels, but to the national investigating authorities which determine the existence of a threat of material injury.
The Anti-Dumping Agreement imposes a specific standard of review on panels. With respect to facts, Articles 17.5 and 17.6(i) of the Anti-Dumping Agreement, together with Article 11 of the DSU (266), set out the standard to be applied by panels when assessing whether a Member’s investigating authorities have ‘established’ and ‘evaluated’ the facts consistently with that Member’s obligations under the covered agreements.(267) These provisions do not authorize panels to engage in a new and independent fact-finding exercise. Rather, in assessing the measure, panels must consider, in the light of the claims and arguments of the parties, whether, inter alia, the ‘establishment’ of the facts by the investigating authorities was ‘proper’, in accordance with the obligations imposed on such investigating authorities under the Anti-Dumping Agreement.(268)
In our view, the ‘establishment’ of facts by investigating authorities includes both affirmative findings of events that took place during the period of investigation as well as assumptions relating to such events made by those authorities in the course of their analyses. In determining the existence of a threat of material injury, the investigating authorities will necessarily have to make assumptions relating to the ‘occurrence of future events’ since such future events ‘can never be definitively proven by facts’.(269) Notwithstanding this intrinsic uncertainty, a ‘proper establishment’ of facts in a determination of threat of material injury must be based on events that, although they have not yet occurred, must be ‘clearly foreseen and imminent’, in accordance with Article 3.7 of the Anti-Dumping Agreement.(270)”(271) (f) Relationship with other paragraphs of Article 3 200. In Thailand — H-Beams, the Appellate Body referred to Article 3.7 in interpreting Article 3.1. See paragraph 112 above. 201. With respect to the relationship between paragraphs 4 and 7 of Article 3, see paragraphs 195–196 above. 202. The Panel on US — Softwood Lumber VI examined the meaning of the requirement under Article 3.8 to consider and decide the application of antidumping measures in a threat of injury case with “special care”: “The adjective ‘special’ is defined as, inter alia, ‘Exceptional in quality or degree; unusual; out of the ordinary’.(272) The noun ‘care’ is defined, inter alia, as ‘Serious attention, heed; caution, pains, regard’.(273) Thus, it seems clear to us that a degree of attention over and above that required of investigating authorities in all anti-dumping and countervailing duty injury cases is required in the context of cases involving threat of material injury.”(274) 203. The Panel on US — Softwood Lumber VI, further considered that, in spite of the fact that Article 3.8 provides that the application of a measure has to be considered with special care, the “special care” obligation of Article 3.8 applies “during the process of investigation and determination of threat of material injury, that is, in the establishment of whether the prerequisites for application of a measure exist, and not merely afterward when final decisions whether to apply a measure are taken”.(275) Faced with the question of what is entailed by this obligation to act with an enhanced degree of attention, so as to demonstrate compliance with the “special care” obligation, the Panel made the following finding: “The Agreements require, as noted above, an objective evaluation based on positive evidence in making any injury determination, including one based on threat of material injury. Canada has not asserted any specific legal requirements with respect to special care — it has made no arguments as to what it considers might constitute the special care required by the Agreements in threat cases. It is not clear to us what the parameters of such ‘special care’ in the context of an objective evaluation based on positive evidence would be. In these circumstances, we consider it appropriate to consider alleged violations of Articles 3.8 and 15.8 only after consideration of the alleged violations of specific provisions. While we do not consider that a violation of the special care obligation could not be demonstrated in the absence of a violation of the more specific provision of the Agreements governing injury determinations, we believe such a demonstration would require additional or independent arguments concerning the asserted violation of the special care requirement beyond the arguments in support of the specific violations.”(276) 11. Relationship with other Articles 204. In Guatemala — Cement II, the Panel found that the subject anti-dumping duty order of Guatemala was inconsistent with several articles of the Anti-Dumping Agreement, among them Article 3. The Panel then opined that Mexico’s claims under other articles of the Anti-Dumping Agreement, among them Article 1, were “dependent claims, in the sense that they depend entirely on findings that Guatemala has violated other provisions of the AD Agreement.”(277) In light of this dependent nature of Mexico’s claim, the Panel considered it not necessary to address these claims. See also paragraph 5 above. 205. In Mexico — Corn Syrup, the Panel discussed the relationship between footnote 9 to Article 3 and Article 4.1. See paragraph 106 above. 206. In Thailand — H-Beams, the Appellate Body referred to Articles 5.2 and 5.3, as well as to Articles 3.7, 6 and 12 in interpreting Article 3.1. See paragraph 112 above. 207. The Panel on Mexico — Corn Syrup touched on the relationship between Articles 3.2 and 5.2. See paragraph 238 below. 208. The Panel on Mexico — Corn Syrup also discussed the relationship between Articles 3.4 and 5.2. See paragraph 238 below. 209. In Guatemala — Cement II, the relationship between Article 3.7 and Articles 5.2 and 5.3 was discussed. See paragraphs 253–255 below. 210. In Thailand — H-Beams, the Appellate Body referred to Article 6 as well as Articles 3.7, 5.2, 5.3 and 12 in interpreting Article 3.1. See paragraph 112 above. 211. In Guatemala — Cement II, the Panel found that the subject anti-dumping duty order of Guatemala was inconsistent with several articles of the Anti-Dumping Agreement, among them Article 3. The Panel then asserted that Mexico’s claims under other articles of the Anti-Dumping Agreement, among them Article 9, were “dependent claims, in the sense that they depend entirely on findings that Guatemala has violated other provisions of the AD Agreement.”(278) In light of this dependent nature of Mexico’s claim, the Panel considered it not necessary to address these claims. See also paragraph 5 above. 212. The Panel on US — DRAMS discussed the relationship between Articles 3.5 and 11.2. See paragraph 506 below. 213. Further in US — DRAMS, the Panel discussed the relationship between footnote 9 to Article 3 and Article 11.2. See paragraph 506 below. 214. In Thailand — H-Beams, the Appellate Body referred to Article 12 as well as Articles 3.7, 5.2, 5.3 and 6 in interpreting Article 3.1. See paragraph 112 above. 215. The Panels on EC — Bed Linen and Egypt — Steel Rebar touched on the relationship between Articles 3.4 and 12.2. See paragraphs 566 below and 167 above respectively. 216. The Appellate Body in Thailand — H-Beams compared the obligation set forth in Article 3.1 with those in Articles 17.5 and 17.6. See paragraph 113 above. 217. In Mexico — Corn Syrup (Article 21.5 — US), the Appellate Body drew a line between the roles of investigating authorities and the panels as regards Article 3.7 threat of injury analysis. In doing so, the Appellate Body referred to Articles 17.5 and 17.6(i). See paragraph 199 above. 218. In Guatemala — Cement II, the Panel found that the subject anti-dumping duty order of Guatemala was inconsistent with several articles of the Anti-Dumping Agreement, among them Article 3. The Panel then opined that Mexico’s claims under other articles of the Anti-Dumping Agreement, among them Article 18, were “dependent claims, in the sense that they depend entirely on findings that Guatemala has violated other provisions of the AD Agreement.”(279) In light of this dependent nature of Mexico’s claim, the Panel considered it not necessary to address these claims. See also paragraph 5 above. 12. Relationship with other WTO Agreements (a) Article VI of the GATT 1994 219. The Panel on US — 1916 Act (EC) explained its exercise of judicial economy with respect to Article 3 as follows: “Since we found above that the 1916 Act violated Article VI:1 by not providing for an injury test compatible with the terms of that Article and since Article 3 simply addresses in more detail the requirement of ‘material injury’ contained in Article VI:1, we do not find it necessary to make specific findings under Article 3 and therefore exercise judicial economy, as we are entitled to do under GATT panel practice and WTO panel and Appellate Body practice.”(280) 220. In Guatemala — Cement II, the Panel found that the subject anti-dumping duty order of Guatemala was inconsistent with several articles of the Anti-Dumping Agreement, among them Article 3. The Panel then determined that Mexico’s claims under other articles of the Anti-Dumping Agreement and under Article VI of the GATT 1994 were “dependent claims, in the sense that they depend entirely on findings that Guatemala has violated other provisions of the AD Agreement.”(281) In light of this dependent nature of Mexico’s claim, the Panel considered it not necessary to address these claims. See also paragraph 5 above. 221. The Appellate Body in US — Hot-Rolled Steel supported its interpretation of the non-attribution language of Article 3.5 by referring to its decisions in two safeguards Reports, US — Wheat Gluten and US — Lamb where it interpreted the non-attribution language in Article 4.2(b) of the Agreement on Safeguards in a similar manner. See also the Panel Report in Guatemala — Cement II, paragraph 152 above.
IV. Article 4 back to top Article 4: Definition of Domestic Industry 4.1 For the purposes of this Agreement, the term “domestic industry” shall be interpreted as referring to the domestic producers as a whole of the like products or to those of them whose collective output of the products constitutes a major proportion of the total domestic production of those products, except that:
(i) when producers are related(11) to the exporters or importers or are themselves importers of the allegedly dumped product, the term “domestic industry” may be interpreted as referring to the rest of the producers;
(footnote original) 11 For the purpose of this paragraph, producers shall be deemed to be related to exporters or importers only if (a) one of them directly or indirectly controls the other; or (b) both of them are directly or indirectly controlled by a third person; or (c) together they directly or indirectly control a third person, provided that there are grounds for believing or suspecting that the effect of the relationship is such as to cause the producer concerned to behave differently from non-related producers. For the purpose of this paragraph, one shall be deemed to control another when the former is legally or operationally in a position to exercise restraint or direction over the latter.
(ii) in exceptional circumstances the territory of a Member may, for the production in question, be divided into two or more competitive markets and the producers within each market may be regarded as a separate industry if (a) the producers within such market sell all or almost all of their production of the product in question in that market, and (b) the demand in that market is not to any substantial degree supplied by producers of the product in question located elsewhere in the territory. In such circumstances, injury may be found to exist even where a major portion of the total domestic industry is not injured, provided there is a concentration of dumped imports into such an isolated market and provided further that the dumped imports are causing injury to the producers of all or almost all of the production within such market.
4.2 When the domestic industry has been interpreted as referring to the producers in a certain area, i.e. a market as defined in paragraph 1(ii), anti-dumping duties shall be levied(12) only on the products in question consigned for final consumption to that area. When the constitutional law of the importing Member does not permit the levying of anti-dumping duties on such a basis, the importing Member may levy the anti-dumping duties without limitation only if (a) the exporters shall have been given an opportunity to cease exporting at dumped prices to the area concerned or otherwise give assurances pursuant to Article 8 and adequate assurances in this regard have not been promptly given, and (b) such duties cannot be levied only on products of specific producers which supply the area in question.
(footnote original) 12 As used in this Agreement “levy” shall mean the definitive or final legal assessment or collection of a duty or tax.
4.3 Where two or more countries have reached under the provisions of paragraph 8(a) of Article XXIV of GATT 1994 such a level of integration that they have the characteristics of a single, unified market, the industry in the entire area of integration shall be taken to be the domestic industry referred to in paragraph 1.
4.4 The provisions of paragraph 6 of Article 3 shall be applicable to this Article. 222. Referring to Article 4.1 and footnote 9 to Article 3, the Panel on Mexico — Corn Syrup stated: “These two provisions inescapably require the conclusion that the domestic industry with respect to which injury is considered and determined must be the domestic industry defined in accordance with Article 4.1”.(282) 223. As regards domestic industry production, see paragraphs 186–187 above. 224. Referring to provisions which use the plural form, but are applicable in the singular case, the Panel on EC — Bed Linen, in a finding not reviewed by the Appellate Body, stated that “Article 4.1 of the AD Agreement defines the domestic industry in terms of ‘domestic producers’ in the plural. Yet we consider it indisputable that a single domestic producer may constitute the domestic industry under the AD Agreement, and that the provisions concerning domestic industry under Article 4 continue to apply in such a factual situation.”(283) 225. The Panel on EC — Bed Linen examined whether, further to having defined the Community industry as a group of 35 producers and resorted to a sample of those producers, the European Communities was precluded from considering information relating to producers not within that sample, or not within the Community industry. See paragraphs 145–147 above. (c) “a major proportion of the total domestic production” 226. The Panel on Argentina — Poultry Anti-Dumping Duties considered whether or not the phrase “a major proportion” implies that the “domestic industry” refers to domestic producers whose collective output constitutes the majority, that is, more than 50 per cent, of domestic total production. The Panel considered different dictionary definitions and noted that the the word “major” is also defined as “important, serious, or significant”.(284) The Panel therefore found that “an interpretation that defines the domestic industry in terms of domestic producers of an important, serious or significant proportion of total domestic production is permissible.(285)”(286) 2. Relationship with other Articles 227. In Mexico — Corn Syrup, the Panel referred to footnote 9 to Article 3 in interpreting Article 4.1. See paragraph 222 above. 228. The Panel on Argentina — Poultry Anti-Dumping Duties rejected the argument that Article 4.1 does not contain an obligation, but is merely a definition which, as such, cannot be violated. The Panel considered that: “Article 4.1 provides that the term ‘domestic industry’ ‘shall’ be interpreted in a specific manner. In our view, this imposes an express obligation on Members to interpret the term ‘domestic industry’ in that specified manner. Thus, if a Member were to interpret the term differently in the context of an anti-dumping investigation, that Member would violate the obligation set forth in Article 4.1.”(287)
V. Article 5 back to top Article 5: Initiation and Subsequent Investigation 5.1 Except as provided for in paragraph 6, an investigation to determine the existence, degree and effect of any alleged dumping shall be initiated upon a written application by or on behalf of the domestic industry.
5.2 An application under paragraph 1 shall include evidence of (a) dumping, (b) injury within the meaning of Article VI of GATT 1994 as interpreted by this Agreement and (c) a causal link between the dumped imports and the alleged injury. Simple assertion, unsubstantiated by relevant evidence, cannot be considered sufficient to meet the requirements of this paragraph. The application shall contain such information as is reasonably available to the applicant on the following:
(i) the identity of the applicant and a description of the volume and value of the domestic production of the like product by the applicant. Where a written application is made on behalf of the domestic industry, the application shall identify the industry on behalf of which the application is made by a list of all known domestic producers of the like product (or associations of domestic producers of the like product) and, to the extent possible, a description of the volume and value of domestic production of the like product accounted for by such producers;
(ii) a complete description of the allegedly dumped product, the names of the country or countries of origin or export in question, the identity of each known exporter or foreign producer and a list of known persons importing the product in question;
(iii) information on prices at which the product in question is sold when destined for consumption in the domestic markets of the country or countries of origin or export (or, where appropriate, information on the prices at which the product is sold from the country or countries of origin or export to a third country or countries, or on the constructed value of the product) and information on export prices or, where appropriate, on the prices at which the product is first resold to an independent buyer in the territory of the importing Member;
(iv) information on the evolution of the volume of the allegedly dumped imports, the effect of these imports on prices of the like product in the domestic market and the consequent impact of the imports on the domestic industry, as demonstrated by relevant factors and indices having a bearing on the state of the domestic industry, such as those listed in paragraphs 2 and 4 of Article 3.
5.3 The authorities shall examine the accuracy and adequacy of the evidence provided in the application to determine whether there is sufficient evidence to justify the initiation of an investigation.
5.4 An investigation shall not be initiated pursuant to paragraph 1 unless the authorities have determined, on the basis of an examination of the degree of support for, or opposition to, the application expressed(13) by domestic producers of the like product, that the application has been made by or on behalf of the domestic industry.(14) The application shall be considered to have been made “by or on behalf of the domestic industry” if it is supported by those domestic producers whose collective output constitutes more than 50 per cent of the total production of the like product produced by that portion of the domestic industry expressing either support for or opposition to the application. However, no investigation shall be initiated when domestic producers expressly supporting the application account for less than 25 per cent of total production of the like product produced by the domestic industry.
(footnote original) 13 In the case of fragmented industries involving an exceptionally large number of producers, authorities may determine support and opposition by using statistically valid sampling techniques.
(footnote original) 14 Members are aware that in the territory of certain Members employees of domestic producers of the like product or representatives of those employees may make or support an application for an investigation under paragraph 1.
5.5 The authorities shall avoid, unless a decision has been made to initiate an investigation, any publicizing of the application for the initiation of an investigation. However, after receipt of a properly documented application and before proceeding to initiate an investigation, the authorities shall notify the government of the exporting Member concerned.
5.6 If, in special circumstances, the authorities concerned decide to initiate an investigation without having received a written application by or on behalf of a domestic industry for the initiation of such investigation, they shall proceed only if they have sufficient evidence of dumping, injury and a causal link, as described in paragraph 2, to justify the initiation of an investigation.
5.7 The evidence of both dumping and injury shall be considered simultaneously (a) in the decision whether or not to initiate an investigation, and (b) thereafter, during the course of the investigation, starting on a date not later than the earliest date on which in accordance with the provisions of this Agreement provisional measures may be applied.
5.8 An application under paragraph 1 shall be rejected and an investigation shall be terminated promptly as soon as the authorities concerned are satisfied that there is not sufficient evidence of either dumping or of injury to justify proceeding with the case. There shall be immediate termination in cases where the authorities determine that the margin of dumping is de minimis, or that the volume of dumped imports, actual or potential, or the injury, is negligible. The margin of dumping shall be considered to be de minimis if this margin is less than 2 per cent, expressed as a percentage of the export price. The volume of dumped imports shall 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, unless 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.
5.9 An anti-dumping proceeding shall not hinder the procedures of customs clearance.
5.10 Investigations shall, except in special circumstances, be concluded within one year, and in no case more than 18 months, after their initiation. 229. Paragraph 7.1 of the Doha Ministerial Decision of 14 November 2001 on Implementation-Related Issues and Concerns provides that the Ministerial Conference “agrees that investigating authorities shall examine with special care any application for the initiation of an anti-dumping investigation where an investigation of the same product from the same Member resulted in a negative finding within the 365 days prior to the filing of the application and that, unless this pre-initiation examination indicates that circumstances have changed, the investigation shall not proceed.”(288) 230. In Guatemala — Cement II, in examining Mexico’s claim that Guatemala’s authority, in violation of Article 5.2, had initiated the anti-dumping investigation without sufficient evidence of dumping having been including in the application, the Panel interpreted Article 5.2 with reference to Article 2, which outlines the elements that describe the existence of dumping. The Panel stated that “evidence on the … elements necessary for the imposition of an anti-dumping measure may be inferred into Article 5.3 by way of Article 5.2.”(289) See paragraph 248 below. 231. On the issue of what evidence was necessary to justify the initiation of an investigation under Article 5, the Panel on Guatemala — Cement I had reached the same conclusion as the Panel on Guatemala — Cement II.(290) However, the Appellate Body found that the dispute was not properly before the Panel and therefore did not reach any conclusion on the Panel’s discussion of Article 5.(291) The Panel Report on Guatemala — Cement I was adopted as reversed by the Appellate Body.(292) 232. In Guatemala — Cement II, the Panel further agreed that “statements of conclusion unsubstantiated by facts do not constitute evidence of the type required by Article 5.2.”(293) 233. The Panel on US — Lumber V considered that an application need only include such reasonably available information on the relevant matters as the applicant deems necessary to substantiate its allegations of dumping, injury and causality, and not all information available to the applicant: “We note that the words ‘such information as is reasonably available to the applicant’, indicate that, if information on certain of the matters listed in sub-paragraphs (i) to (iv) is not reasonably available to the applicant in any given case, then the applicant is not obligated to include it in the application. It seems to us that the ‘reasonably available’ language was intended to avoid putting an undue burden on the applicant to submit information which is not reasonably available to it. It is not, in our view, intended to require an applicant to submit all information that is reasonably available to it. Looking at the purpose of the application, we are of the view that an application need only include such reasonably available information on the relevant matters as the applicant deems necessary to substantiate its allegations of dumping, injury and causality. As the purpose of the application is to provide an evidentiary basis for the initiation of the investigative process, it would seem to us unnecessary to require an applicant to submit all information reasonably available to it to substantiate its allegations.(294) This is particularly true where such information might be redundant or less reliable than, information contained in the application.” (295) 234. In Guatemala — Cement II, the Panel addressed the issue of whether the elements of “dumping” require sufficient evidence under Article 5.3, and based its analysis upon its reading of the term “dumping”, under Article 5.2, as a reference to dumping as within the meaning of Article 2. See paragraphs 248–249 below. 235. On this issue, the Panel on Guatemala — Cement I also reached the same conclusion(296), but the Appellate Body found that the dispute was not properly before the Panel and therefore did not reach any conclusion on the Panel’s discussion of Article 2.4.(297) The Panel Report on Guatemala — Cement I was adopted as reversed by the Appellate Body.(298) 236. The Panel on Guatemala — Cement I, in response to Mexico’s claim of violation of Articles 5.2 and 5.3, addressed the issue of the evidence of injury in an application necessary under Article 5.2.(299) However, the Appellate Body found that the dispute was not properly before the Panel and therefore did not reach any conclusion on the Panel’s discussion of Article 5.(300) The Panel Report on Guatemala — Cement I was adopted as reversed by the Appellate Body.(301) 237. The Panel on Guatemala — Cement II also addressed the issue of the evidence of threat of injury necessary in an application under Article 5.2, and the closely related issue of the amount of evidence necessary under Article 5.3 to justify the initiation of an investigation. See paragraphs 253–254 below. (d) “evidence of … causal link” — subparagraph (iv) 238. In considering what information regarding the existence of a causal link must be provided in an application pursuant to Article 5.2, the Panel on Mexico — Corn Syrup found that “the quantity and quality of the information provided by the applicant need not be such as would be required in order to make a preliminary or final determination of injury”: “[T]he inclusion in Article 5.2(iv) of the word ‘relevant’ and the phrase ‘such as’ in the reference to the factors and indices in Articles 3.2 and 3.4 in our view makes it clear that an application is not required to contain information on all the factors and indices set forth in Articles 3.2 and 3.4. Rather, Article 5.2(iv) requires that the application contain information on factors and indices relating to the impact of imports on the domestic industry, and refers to Articles 3.2 and 3.4 as illustrative of factors which may be relevant. Which factors and indices are relevant to demonstrate the consequent impact of imports on the domestic industry will vary depending on the nature of the allegations made by the industry, and the nature of the industry itself. If the industry provides information reasonably available to it concerning factors which are relevant to the allegation of injury (or threat of injury) it makes in the application, and the information concerning those factors demonstrates, that is, ‘shows evidence of’, the consequent impact of dumped imports on the domestic industry, we believe that Article 5.2(iv) is satisfied.
Obviously, the quantity and quality of the information provided by the applicant need not be such as would be required in order to make a preliminary or final determination of injury. Moreover, the applicant need only provide such information as is ‘reasonably available’ to it with respect to the relevant factors. Since information regarding the factors and indices set out in Article 3.4 concerns the state of the domestic industry and its operations, such information would generally be available to applicants. Nevertheless, we note that an application which is consistent with the requirements of Article 5.2 will not necessarily contain sufficient evidence to justify initiation under Article 5.3.”(302) 239. In Mexico — Corn Syrup, the Panel distinguished, for the purposes of Article 5.2, between information and analysis: “Article 5.2 does not require an application to contain analysis, but rather to contain information, in the sense of evidence, in support of allegations. While we recognize that some analysis linking the information and the allegations would be helpful in assessing the merits of an application, we cannot read the text of Article 5.2 as requiring such an analysis in the application itself.(303)”(304) 240. In Thailand — H-Beams, the Panel agreed with the view of the Panel on Mexico — Corn Syrup referenced in paragraph 239 above.(305) Further, the Panel rejected Poland’s argument that paragraph (iv) of Article 5.2 implies that some sort of analysis of data is required in the application, and stated that “we do not read this provision as imposing any additional requirement that the application contain analysis of the data submitted in support of the application.”(306) The Appellate Body did not review these findings of the Panel. (e) “simple assertion, unsubstantiated by relevant evidence” 241. In Thailand — H-Beams, the Panel stated that “raw numerical data would constitute ‘relevant evidence’ rather than merely a ‘simple assertion’ within the meaning of this provision.”(307) (f) Relationship with other paragraphs of Article 5 242. The Panel on Guatemala — Cement II discussed the relationship between Articles 5.2 and 5.3 in order to clarify the requirements under both Articles 5.2 and 5.3. See paragraph 248 below. 243. Also, in Guatemala — Cement II, the Panel stated that “[i]n light of our finding that the Ministry’s determination that it had sufficient evidence to justify the initiation of an investigation was inconsistent with Article 5.3, we do not consider it necessary to rule on Mexico’s Article 5.2 claims regarding the sufficiency of Cementos Progreso’s application.”(308) (a) “sufficient evidence to justify the initiation of an investigation” (i) Distinction from the requirements under Article 5.2 244. In Guatemala — Cement II, in examining the claim that Guatemala’s investigating authority based its initiation decision on insufficient evidence in violation of Article 5.3, the Panel stated: “Article 5.2 requires that the application contain sufficient evidence on dumping, injury and causation, while Article 5.3 requires the investigating authority to satisfy itself as to the accuracy and adequacy of the evidence to determine that it is sufficient to justify initiation.”(309) 245. On the relationship between Articles 5.2 and 5.3, the Panel on Guatemala — Cement I commented to the same effect that the fact than an application satisfied the requirements of Article 5.2 did not demonstrate that there was “sufficient evidence” to justify initiation under Article 5.3.(310) however, the Appellate Body found that the dispute was not properly before the Panel and therefore did not reach any conclusion on the Panel’s discussion of Article 5.(311) The Panel Report on Guatemala — Cement I was adopted as reversed by the Appellate Body.(312) 246. The Panel on Guatemala — Cement II held that the appropriate legal standard under Article 5.3 was not the adequacy and accuracy per se of the evidence in the application, but the sufficiency of the evidence: “[I]n accordance with our standard of review, we must determine whether an objective and unbiased investigating authority, looking at the facts before it, could properly have determined that there was sufficient evidence to justify the initiation of an anti-dumping investigation. Article 5.3 requires the authority to examine, in making this determination, the accuracy and adequacy of the evidence in the application. Clearly, the accuracy and adequacy of the evidence is relevant to the investigating authorities’ determination whether there is sufficient evidence to justify the initiation of an investigation. It is however the sufficiency of the evidence, and not its adequacy and accuracy per se, which represents the legal standard to be applied in the case of a determination whether to initiate an investigation.”(313) 247. In Guatemala — Cement II, on the basis of the distinction between Articles 5.2 and 5.3 described in the excerpt in paragraph 248 below, the Panel stated that “[o]ne of the consequences of this difference in obligations is that investigating authorities need not content themselves with the information provided in the application but may gather information on their own in order to meet the standard of sufficient evidence for initiation in Article 5.3.”(314) In support of this proposition, the Panel cited the panel’s finding on Guatemala — Cement I.(315) (ii) Sufficient evidence for “dumping” 248. In Guatemala — Cement II, in examining the issue of whether Articles 2.1 and 2.4 are applicable to the decision to initiate an investigation, i.e. which specific elements of dumping need to be supported by sufficient evidence under Article 5.3, the Panel first held that what constitutes necessary evidence for the purposes of Article 5.3 can be inferred from Article 5.2. The Panel then found that “in order to determine that there is sufficient evidence of dumping, the investigating authority cannot entirely disregard the elements that configure the existence of this practice as outlined in Article 2”: “[W]e first observe that, although there is no express reference to evidence of dumping in Article 5.3, evidence on the three elements necessary for the imposition of an anti-dumping measure may be inferred into Article 5.3 by way of Article 5.2. In other words, Article 5.2 requires that the application contain sufficient evidence on dumping, injury and causation, while Article 5.3 requires the investigating authority to satisfy itself as to the accuracy and adequacy of the evidence to determine that it is sufficient to justify initiation. Thus, reading Article 5.3 in the context of Article 5.2, the evidence mentioned in Article 5.3 must be evidence of dumping, injury and causation. We further observe that the only clarification of the term ‘dumping’ in the AD Agreement is that contained in Article 2. In consequence, in order to determine that there is sufficient evidence of dumping, the investigating authority cannot entirely disregard the elements that configure the existence of this practice as outlined in Article 2. This analysis is done not with a view to making a determination that Article 2 has been violated through the initiation of an investigation, but rather to provide guidance in our review of the Ministry’s determination that there was sufficient evidence of dumping to warrant an investigation. We do not of course mean to suggest that an investigating authority must have before it at the time it initiates an investigation evidence of dumping within the meaning of Article 2 of the quantity and quality that would be necessary to support a preliminary or final determination. An anti-dumping investigation is a process where certainty on the existence of all the elements necessary in order to adopt a measure is reached gradually as the investigation moves forward. However, the evidence must be such that an unbiased and objective investigating authority could determine that there was sufficient evidence of dumping within the meaning of Article 2 to justify initiation of an investigation.
We note that Article 2.1 states that a product is to be considered as dumped ‘if the export price … is less than the comparable price, in the ordinary course of trade, for the like product when destined for consumption in the exporting country.’ (emphasis added). Other provisions of Article 2 that further elaborate on this basic definition include Article 2.4, which sets forth certain principles regarding the comparability of export prices and normal value. In particular, Article 2.4 specifies that comparisons between the export price and the normal value shall be made at the same level of trade, and that due allowance shall be made in each case, on its merits, for differences which affect price comparability, including differences in level of trade and quantity. Consistent with our discussion above, we consider that, although these provisions of Article 2 do not ‘apply’ as such to initiation determinations, they are certainly relevant to an investigating authorities’ consideration as to whether sufficient evidence of dumping exists to justify the initiation of an investigation.(316)”(317) 249. The Panel on Guatemala — Cement I reached the same conclusion as the Panel on Guatemala — Cement II on the issue of which specific elements of dumping need to be supported by sufficient evidence under Article 5.3 (see paragraph 248 above)(318), but the Appellate Body found that the dispute was not properly before the Panel and therefore did not reach any conclusion on the Panel’s discussion of Article 2.4.(319) The Panel Report on Guatemala — Cement I was accordingly adopted as reversed by the Appellate Body.(320) 250. The Panel on Argentina — Poultry Anti-Dumping Duties rejected Brazil’s claim that an investigation cannot be initiated based on an application including only normal value data related to sales in one city and expressed the view that “it is sufficient for an investigating authority to base its decision to initiate on evidence concerning domestic sales in a major market of the exporting country subject to the investigation, without necessarily having data for sales throughout that country”.(321) 251. The Panel on Argentina — Poultry Anti-Dumping Duties also examined the compatibility with Article 5.3, read in light of Article 2.4.2, of an inititation based on a weighted average export price that was calculated using only those transactions with a price lower than the normal value. As the weighted average export price was therefore not based on the totality of comparable export transactions, the Panel considered that “the use of such a practice would not allow an objective and impartial investigating authority to properly conclude that there was sufficient evidence of dumping to justify the initiation of an investigation”.(322) The Panel thus also rejected the argument that, in order to initiate, an investigating authority need only satisfy itself that there has been some dumping, in the sense that certain transactions were dumped: “We recall that, ‘in order to determine whether or not there is sufficient evidence of dumping for the purpose of initiation, an investigating authority cannot entirely disregard the elements that configure the existence of [dumping] outlined in Article 2’.(323) A determination of dumping should be made in respect of the product as a whole, for a given period, and not for individual transactions concerning that product. An investigating authority therefore cannot disregard export transactions at the time of initiation simply because they are equal to or greater than normal value. Disregarding such transactions does not provide a proper basis for determining whether or not there is sufficient evidence of dumping to justify initiation.”(324) 252. On the question of whether a comparison between normal value for one day and and export price for a period of several months constitutes a proper basis for determining whether there is sufficient evidence of dumping to justify the inititiation of the investigation, the Panel on Argentina — Poultry Anti-Dumping Duties recalled that Article 2.4 requires that a fair comparison be made between the export price and the normal value in respect of sales “made at as nearly as possible the same time”. It concluded that “there should be a substantial degree of overlap in the periods considered in order for the comparison of =normal value and export price to be fair within the meaning of Article 2.4”.(325) For a product in respect of which there are many transactions taking place on a daily basis, it was “not persuaded that domestic sales data for one day provides sufficient overlap with export price data for several months for the purpose of Article 5.3.”(326) (iii) Sufficient evidence for “injury” 253. In Guatemala — Cement II, the Panel examined Mexico’s argument that the Guatemalan authority did not have sufficient evidence of threat of material injury to justify the initiation of an investigation. In rebuttal, Guatemala argued that Article 3.7 does not apply to the determination of the investigating authorities on this issue, because Article 5.2(iv), which requires that an application contain certain information, does not refer to Article 3.7, but only to Articles 3.2 and 3.4. The Panel responded: “[W]hen considering whether there is sufficient evidence of threat of injury to justify the initiation of an investigation, an investigating authority cannot totally disregard the elements that configure the existence of threat of injury outlined in Article 3. We do not mean to suggest that an investigating authority must have before it at the time it initiates an investigation evidence of threat of material injury within the meaning of Article 3 of the quantity and quality that would be necessary to support a preliminary or final determination of threat of injury. However, the investigating authority must have before it evidence of threat of material injury, as defined in Article 3, sufficient to justify the initiation of an investigation.”(327) 254. However, with respect to Article 3.7, the Panel added a caveat to its finding quoted under paragraph 253 above, in stating that the investigating authority need not have before it information on all Article 3.7 factors where there is an allegation of threat of injury: “Article 3.7 provides specific guidance on the factors to be considered by an investigating authority when making a determination of threat of injury. Although we do not necessarily believe that an investigating authority must have before it information on all Article 3.7 factors in a case where initiation of an investigation is requested on the basis of an alleged threat of injury, a consideration of those factors is certainly pertinent to an evaluation of whether there was sufficient evidence of threat of material injury to justify the initiation of an investigation.”(328) 255. On the issue of which specific elements of dumping need to be supported by sufficient evidence under Article 5.3, the Panel on Guatemala — Cement I reached the same conclusion as the Panel on Guatemala — Cement II (see paragraphs 253–254 above).(329) However, the Appellate Body found that the dispute was not properly before the Panel and therefore did not reach any conclusion on the Panel’s discussion of Article 5(330), and accordingly, the Panel Report on Guatemala — Cement I was adopted as reversed by the Appellate Body.(331) (iv) Standard of review — relationship with Article 17.6 256. In determining what constitutes “sufficient evidence to justify the initiation of an investigation” under Article 5.3, the Panel on Guatemala — Cement I applied the standard of review set out in Article 17.6(i)(332), referring, in so doing, to the GATT Panel Report on US — Softwood Lumber II.(333) The Panel also agreed with the view expressed by the Panel on US — Softwood Lumber II that “the quantum and quality of the evidence required at the time of initiation is less than that required for a preliminary, or final, determination of dumping, injury, and causation, made after the investigation”.(334) However, the Appellate Body found that the dispute was not properly before the Panel and therefore did not reach a conclusion on the interpretation of Article 17.6 by the Panel(335), and accordingly, the Panel Report on Guatemala — Cement I was adopted as reversed by the Appellate Body.(336) 257. Referring to the approach of the Panel on Guatemala — Cement I (337), which took into account the reasoning of the GATT Panel on US — Softwood Lumber II, the Panel on Mexico — Corn Syrup stated that “[o]ur approach in this dispute will similarly be to examine whether the evidence before [the investigating authority] at the time it initiated the investigation was such that an unbiased and objective investigating authority evaluating that evidence, could properly have determined that sufficient evidence of dumping, injury, and causal link existed to justify initiation.”(338) 258. In Guatemala — Cement II, the Panel found that “[i]t is clear on the face of these documents that the invoices reflecting prices in Mexico are for sales occurring at the very end of the commercialisation chain and the import certificates reflect prices at the point of importation which is the beginning of the commercialisation chain for Mexican cement in Guatemala”. (339) The Panel subsequently found, applying the standard of review set forth in Article 17.6(i): “[T]he fact that the sales in the Mexican and Guatemalan markets were at different levels of trade was apparent from the application itself, and an unbiased and objective investigating authority should have recognized this fact without the need for it to be pointed out. Nor do we consider that an investigating authority can completely ignore obvious differences that could affect the comparability of the prices cited in an application on the ground that the foreign exporter has not demonstrated that they have affected price comparability. Moreover, at the point where the investigating authority is considering whether there is sufficient evidence to initiate an investigation, potentially affected exporters have not even been notified of the existence of an application, much less been provided a copy thereof. Thus, the logical implication of Guatemala’s argument is that an investigating authority need never take into account issues of price comparability when considering whether there is sufficient evidence of dumping to initiate an investigation. We cannot agree with such an interpretation of the AD Agreement, particularly in light of the criteria set out in para. 8.36 above.
After a thorough review of all the actions by the Ministry leading up to the initiation of the investigation, we find that no attempt was made to take into account glaring differences in the levels of trade and sales quantities and their possible effects on price comparability. Under these circumstances, an unbiased and objective investigating authority could not in our view have concluded that there was sufficient evidence of dumping to justify the initiation of an anti-dumping investigation.”(340) 259. Having found that the Guatemalan investigating authority should have considered the issue of price comparability when considering whether there was sufficient evidence of dumping to initiate an investigation, the Panel emphasized that it did not expect: “[I]nvestigating authorities at the initiation phase to ferret out all possible differences that might affect the comparability of prices in an application and perform or request complex adjustments to them. We do however expect that, when from the face of an application it is obvious that there are substantial questions of comparability between the export and home market prices being compared, the investigating authority will at least acknowledge that differences in the prices generate questions with regards to their comparability, and either give some consideration as to the impact of those differences on the sufficiency of the evidence of dumping or seek such further information as might be necessary to do so.”(341) (b) “shall examine the accuracy and adequacy of the evidence provided in the application” 260. The Panel on Guatemala — Cement I considered whether there had been sufficient evidence to justify an anti-dumping investigation under Article 5.3.(342) However, the Appellate Body found that the dispute was not-properly before the Panel and therefore did not reach a conclusion on the discussion of Article 5.3 by the Panel(343), and accordingly, the Panel Report on Guatemala — Cement I was adopted as reversed by the Appellate Body.(344) 261. In determining what the parameters are of the requirement to “examine” the accuracy and adequacy of the evidence, and on what basis an assessment can be made regarding whether the necessary examination was carried out, the Panel on EC — Bed Linen, in a finding subsequently not reviewed by the Appellate Body, stated: “The only basis, in our view, on which a panel can determine whether a Member’s investigating authority has examined the accuracy and adequacy of the information in the application is by reference to the determination that examination is in aid of — the determination whether there is sufficient evidence to justify initiation. That is, if the investigating authority properly determined that there was sufficient evidence to justify initiation, that determination can only have been made based on an examination of the accuracy and adequacy of the information in the application, and consideration of additional evidence (if any) before it.”(345) 262. Regarding a determination under Article 5.3, the Panel on Mexico — Corn Syrup stated that “Article 5.3 does not impose an obligation on the investigating authority to set out its resolution of all underlying issues considered”.(346) Applied to the facts of the dispute, the Panel concluded that “Article 5.3 does not establish a requirement for the investigating authority to state specifically the resolution of questions concerning the exclusion of certain producers involved in defining the relevant domestic industry in the course of examining the accuracy and adequacy of the evidence to determine whether there was sufficient evidence to justify initiation.”(347) 263. In Guatemala — Cement II, the Panel agreed that “statements of conclusion unsubstantiated by facts do not constitute evidence of the type … which allows an objective examination of its adequacy and accuracy by an investigating authority as provided in Article 5.3.”(348) (c) Relationship with other paragraphs of Article 5 264. The Panel on Guatemala — Cement II discussed the relationship between Articles 5.2 and 5.3. See paragraphs 248–249 above. 265. The Panel on Guatemala — Cement II rejected Mexico’s argument that a violation of Article 5.3 due to the initiation of an investigation in the absence of sufficient evidence necessarily constitutes a violation of Article 5.7. See paragraph 281 below. 266. The Panel on Mexico — Corn Syrup touched on the relationship between Articles 5.3 and 5.8. See paragraph 283 below. 267. The Appellate Body on US — Offset Act (Byrd Amendment) considered that Article 5.4 requires “no more than a formal examination of whether a sufficient number of domestic producers have expressed support for an application”.(349) The Appellate Body went on to note that Article 5.4 contains no requirement for investigating authorities to examine the motives of producers that elect to support (or to oppose) an application.(350) The Appellate Body recalled that “there may be a number of reasons why a domestic producer could choose to support an investigation.” (351) The Appellate Body strongly disagreed with the approach taken by the Panel in relation to the concept of support(352) and reached the following conclusion: “A textual examination of Article 5.4 of the Anti-Dumping Agreement and Article 11.4 of the SCM Agreement reveals that those provisions contain no requirement that an investigating authority examine the motives of domestic producers that elect to support an investigation. Nor do they contain any explicit requirement that support be based on certain motives, rather than on others. The use of the terms ‘expressing support’ and ‘expressly supporting’ clarify that Articles 5.4 and 11.4 require only that authorities ‘determine’ that support has been ‘expressed’ by a sufficient number of domestic producers. Thus, in our view, an ‘examination’ of the ‘degree’ of support, and not the ‘nature’ of support is required. In other words, it is the ‘quantity’, rather than the ‘quality’, of support that is the issue.”(353) (b) Relationship with Article 11.4 of the SCM Agreement 268. In US — Offset Act (Byrd Amendment), the Appellate Body further to noting that both Article 5.4 of the Anti-Dumping Agreement and Article 11.4 of the SCM Agreement are “identical” provisions, analysed them jointly. See paragraph 267 above. (a) “before proceeding to initiate” 269. In Guatemala — Cement II, Mexico claimed that in violation of Article 5.5, Guatemala did not notify the Government of Mexico before proceeding to initiate the investigation. Guatemala argued that that the effective date of initiation of the investigation was not 11 January 1996, the date alleged by Mexico, and maintained that according to its own Constitution and legislation, the investigating authority could not have initiated the investigation until the Government of Mexico had been officially notified. Referring to footnote 1 of the Anti-Dumping Agreement, the Panel first determined at what specific point in time the Guatemalan investigation had been initiated within the meaning of the Anti-Dumping Agreement: “[T]he date of initiation is the date of the procedural action by which Guatemala formally commenced the investigation. We are of the view that in the case before us the action by which the investigation was formally commenced is the date of publication of the notice of initiation which occurred on 11 January 1996.”(354) 270. The Panel on Guatemala — Cement I, like the Panel on Guatemala — Cement II, also reached the conclusion that the date of initiation for purposes of Article 5.5 is the date of action by which the Guatemalan authorities formally commenced the investigation.(355) The Appellate Body, however, found that the dispute was not properly before the Panel and therefore did not reach a conclusion on the discussion of Article 5.5 by the Panel,(356) and accordingly, the Panel Report on Guatemala — Cement I was adopted as reversed by the Appellate Body.(357) 271. The Panel on Guatemala — Cement II further rejected Guatemala’s argument that “[it] could not have initiated the investigation until after it had notified Mexico”(358), because its own Constitution and laws mandated it to do so: “In acceding to the WTO, Guatemala undertook to be bound by the rules contained in the AD Agreement, and our mandate is to review Guatemala’s compliance with those rules. The fact that the Constitution of Guatemala mandates that the investigating authorities proceed in a way which is consistent with its international obligations, does not validate the actions actually carried out by those authorities if those actions violate Guatemala’s commitments under the WTO. Whether Mexico chose not to pursue its rights under Guatemalan law is of no concern to us, as this would not affect its rights under the WTO Agreements. …”(359) 272. In Guatemala — Cement II, the Panel also stated, with respect to Guatemala’s assertion that “in some cases Mexico has failed to notify the government of the investigated exporters in a timely fashion under Article 5.5”(360), that “[w]e are of the view that Mexico’s actions regarding notifications is of no relevance to issues before us in this case, which requires us to review the actions of the Guatemalan authorities. (361)”(362) 273. At its meeting of 29 October 1998, the Committee on Anti-Dumping Practices adopted a recommendation on the timing of notifications required under Article 5.5.(363) 274. In Thailand — H-Beams, the Panel, in a finding not reviewed by the Appellate Body, considered that a notification required under Article 5.5 can be made orally. The Panel stated: “Article 5.5 AD does not specify the form that the notification must take. The Concise Oxford Dictionary defines the term ‘notify’ as: ‘inform or give notice to (a person)’; ‘make known, announce or report (a thing)’. We consider that the form of the notification under Article 5.5 must be sufficient for the importing Member to ‘inform’ or ‘make known’ to the exporting Member certain facts. While a written notification might arguably best serve this goal and the promotion of transparency and certainty among Members, and might also provide a written record upon which an importing Member could rely in the event of a subsequent claim of inconsistency with Article 5.5 of the AD Agreement, the text of Article 5.5 does not expressly require that the notification be in writing.(364)”(365) 275. In Thailand — H-Beams, the Panel examined what must be notified under Article 5.5, as follows: “The text of Article 5.5 does not specify the contents of the notification. It provides: ‘after receipt of a properly documented application and before proceeding to initiate an investigation, the authorities shall notify the government of the exporting Member concerned’.(366) Because the text of the provision specifies that notification necessarily follows the receipt of a properly documented application, we consider that the fact of the receipt of a properly documented application would be an essential element of the contents of the notification.”(367) (c) “Harmless error” with respect to Article 5.5 violation/Rebuttal against nullification or impairment presumed from a violation of Article 5.5 276. In Guatemala — Cement II, Guatemala argued that the alleged violations of Articles 5.5, 12.1.1 and 6.1.3, had not affected the course of the investigation, and thus, (a) the alleged violations were not harmful according to the principle of harmless error, (b) Mexico “convalidated” the alleged violations by not objecting immediately after their occurrence, and (c) the alleged violations did not cause nullification or impairment of benefits accruing to Mexico under the Anti-Dumping Agreement. The Panel first responded to the argument on “harmless error”, concluding that “the concept of ‘harmless error’ as presented by Guatemala” had not “attained the status of a general principle of public international law”: “In our view, the GATT panel referred to by Guatemala in support of its position merely stated that it did not wish ‘to exclude that the concept of harmless error could be applicable in dispute settlement proceedings under the Agreement.‘ (368) It therefore cannot be concluded that the GATT panel referred to ‘recognized the principle of harmless error ‘as alleged by Guatemala. We do not consider that the concept of ‘harmless error’ as presented by Guatemala has attained the status of a general principle of public international law. In any event, we consider that our first task in this dispute is to determine whether Guatemala has acted consistently with its obligations under the relevant provisions of the AD Agreement. To the extent that Mexico can demonstrate that Guatemala has not respected its obligations under the relevant provisions of that Agreement, we must next consider arguments raised by Guatemala in respect of the nullification or impairment of benefits accruing to Mexico thereunder. Thus, while arguments regarding the existence and extent of the possible harm suffered by Mexico may be relevant to the issue of nullification or impairment,(369) we do not consider that an argument of harmless error represents a defence in itself to an alleged infringement of a provision of the WTO Agreement.”(370) 277. On the second argument put forward by Guatemala in the context of the alleged violations of Articles 5.5, 12.1.1 and 6.1.3, namely the lack of reaction from Mexico, the Panel found that “Mexico was under no obligation to object immediately to the violations it now alleges before the Panel”: “Guatemala uses both the concepts of ‘acquiescence’ and ‘estoppel’ in support of this argument. We note that ‘acquiescence’ amounts to ‘qualified silence’, whereby silence in the face of events that call for a reaction of some sort may be interpreted as a presumed consent.(371) The concept of estoppel, also relied on by Guatemala in support of its argument, is akin to that of acquiescence. Estoppel is premised on the view that where one party has been induced to act in reliance on the assurances of another party, in such a way that it would be prejudiced were the other party later to change its position, such a change in position is ‘estopped’, that is precluded.(372)
Regarding both arguments of acquiescence and estoppel we note that Mexico was under no obligation to object immediately to the violations it now alleges before the Panel.(373) Mexico raised claims concerning Articles 5.5, 12.1.1 and 6.1.3 at an appropriate moment under the dispute settlement procedure envisaged by the AD Agreement and the DSU. Thus, Mexico cannot therefore be considered as having acquiesced to belated notification by Guatemala, to insufficiency in the public notice or to delay in providing the full text of the application, much less to have given ‘assurances’ to Guatemala that it would not later challenge these actions in WTO dispute settlement. Since Mexico raised its claims at an appropriate moment under the WTO dispute settlement procedures, Guatemala could not have reasonably relied upon Mexico’s alleged lack of protest to conclude that Mexico would not bring a WTO complaint. In any event, Guatemala has not satisfied us that, had Mexico complained after the fact, but during the course of the investigation, Guatemala could or would have taken action to remedy the situation. Specifically, with respect to the delay in the Article 5.5 notification, Guatemala asserts that had Mexico objected to the notification delay in a timely manner, the Guatemalan authorities would have reinitiated the investigation after presenting Mexico with the notification under Article 5.5. We are of the view that this argument presented by Guatemala is highly speculative and note that the Panel has been established to rule on the WTO conformity of the actions by Guatemala and not on the WTO conformity of the actions Guatemala alleges it could have taken. In any event, Guatemala states at para. 217 of its first written submission that Mexico first raised the Article 5.5 issue on 6 June 1996, that is at a relatively early stage of the Ministry’s investigation, and precedes the Ministry’s preliminary affirmative determination. Nevertheless, Guatemala failed to take any steps to address the delayed Article 5.5 notification at that time. Based on these considerations the Panel rejects Guatemala’s defence that Mexico ‘convalidated’ the alleged violations of Articles 5.5, 6.1.3 and 12.1.1 of the AD Agreement.”(374) 278. The Panel on Guatemala — Cement II then considered the third element of Guatemala’s argument in the context of the alleged violations of Articles 5.5, 12.1.1 and 6.1.3, namely that no nullification or impairment resulted from the alleged violation of Article 5.5. The Panel found that Guatemala did not rebut the presumption of nullification or impairment under Article 3.8 of the DSU, stating: “There is no way to ascertain what Mexico might have done if it had received a timely notification. The extension of time for response to the questionnaire granted to Cruz Azul has no bearing on the fact that Mexico was not informed in time. Thus, we do not consider that Guatemala has rebutted the presumption of nullification or impairment with respect to violations of Article 5.5.”(375) 279. The Panel also rejected Guatemala’s argument “that the Panel should examine Guatemala’s acts and decide whether the non-fulfilment of a procedural obligation should be overlooked on the grounds that the omission did not prejudice the rights of Mexico or [the Mexican producer on whose products antidumping duties had been imposed]”: “We could find no basis for such a distinction in the DSU, as suggested by Guatemala between substantive and ‘mere’ procedural violations. There is no reason to regard violations of procedural obligations differently than obligation of a substantial nature. Compliance with the complete set of procedural rules relating to anti-dumping investigations, including those concerning notification and enhanced transparency, is required. This obligation to comply with all provisions, both procedural and substantive should not be taken lightly if one is not to devoid of all meaning the AD Agreement itself. As detailed in sections … above we have found that Guatemala violated Articles 5.5, 6.1.3 and 12.1.1 of the AD Agreement by failing to timely notify Mexico of the decision to initiate an investigation, to timely provide Mexico and Cruz Azul a copy of the application, and to publish an adequate notice of initiation. We consider that a key function of the transparency requirements of the AD Agreement is to ensure that interested parties, including Members, are able to take whatever steps they deem appropriate to defend their interests. Where a required notification is not made in a timely fashion, or the application is not provided in time, or the public notice is inadequate the ability of the interested party to take such steps is vitiated. It is not for us to now speculate on what steps Mexico might have taken had it been timely notified or provided with the application, or had the public notice been adequate, and how Guatemala might have responded to those steps. Thus, while there is a possibility that the investigation would have proceeded in the same manner had Guatemala complied with its transparency obligations, we cannot state with certainty that the course of the investigation would not have been different.”(376) 280. The Panel on Guatemala — Cement I also addressed the argument for the concept of “harmless error”.(377) However, the Appellate Body found that the dispute was not properly before the Panel and therefore did not reach a conclusion on the discussion of Article 5.5 by the Panel.(378) The Panel Report on Guatemala — Cement I was adopted as reversed by the Appellate Body.(379) 281. In Guatemala — Cement II, with the understanding that Mexico argued that “the initiation of an investigation in the absence of sufficient evidence to justify initiation (contrary to Article 5.3) necessarily constitutes a violation of Article 5.7”, the Panel held : “Article 5.7 requires the investigating authority to examine the evidence before it on dumping and injury simultaneously, rather than sequentially. We do not consider that the fulfilment of this requirement is conditioned in any way on the substantive nature of that evidence.”(380) 282. The Panel on Argentina — Poultry Anti-Dumping Duties rejected the argument that evidence of dumping and injury must cover simultaneous periods. It was thus of the view that an argument which concerned the substantive nature of the evidence considered by the authorities in the decision whether or not to initiate an investigation, rather than the timing of the consideration itself, was “outside the scope of the obligation contained in Article 5.7”.(381) The Panel considered that: “Article 5.7 imposes a procedural obligation on the investigating authority to examine the evidence before it of dumping and injury simultaneously, rather than sequentially, inter alia in the decision whether or not to initiate an investigation. We are of the view that Article 5.7 is not concerned with the substance of the decision to initiate an investigation, which is dealt with in Article 5.3 of the AD Agreement.”(382) (a) Rejection of an application to initiate an investigation 283. The Panel on Mexico — Corn Syrup noted that “Article 5.8 does not impose additional substantive obligations beyond those in Article 5.3 on the authority in connection with the initiation of an investigation. That is, if there is sufficient evidence to justify initiation under Article 5.3, there is no violation of Article 5.8 in not rejecting the application.”(383) 284. In Guatemala — Cement II, the Panel addressed the question of applicability of Article 5.8 before the initiation of an investigation, in order to examine Mexico’s claim that Guatemala violated Article 5.8 by not rejecting the application made by a Guatemalan producer and by not refraining from initiating the investigation due to the lack of sufficient evidence of dumping and threat of material injury to justify initiation. Citing the finding of the Panel on Mexico — Corn Syrup referenced in paragraph 285 below, Guatemala argued that Article 5.8 applies only after the initiation of an investigation. The Panel rejected this argument, and stated: “We note that Article 5.8 makes specific reference to the rejection of an application as soon as the authorities conclude that there is not sufficient evidence of dumping or injury to justify proceeding with the case. This language on rejection of an application seems to be in contrast with Guatemala’s argument that Article 5.8 applies only after initiation. We are of the view that, if the drafters intended that Article 5.8 apply only after initiation, the reference to promptly terminating an investigation would have sufficed. By referring to the rejection of an application Article 5.8 addresses the situation where an application has been received but an investigation has not yet been initiated. That the text of Article 5.8 continues after the quoted section to describe situations in which an initiated investigation should be terminated, does not support Guatemala’s argument that the whole of Article 5.8 applies only after the investigation has been initiated. On the contrary, the second sentence of Article 5.8, by specifying that ‘there shall be immediate termination in cases’ confirms that the first sentence of Article 5.8 expressly contemplates its application pre-initiation by including a reference to the rejection of an application. Otherwise, mere reference to the termination of an investigation, as in the second sentence of Article 5.8, would have been all that was needed in the first sentence to make it clear that it applied once an investigation was underway.”(384) 285. With respect to the finding of the Panel on Mexico — Corn Syrup cited by Guatemala, the Panel stated: “In our view, the findings in Mexico — HFCS on this issue do not support the interpretation that Article 5.8 applies only after an investigation has been initiated. … The panel in Mexico — HFCS determined that there had not been a violation of Article 5.3 as there was sufficient evidence to justify initiation. After having made that determination the Mexico — HFCS panel proceeded to find that given that there was sufficient evidence to justify initiation under Article 5.3, there was no possible violation of Article 5.8. This in no way detracts from our position that Article 5.8 applies pre-initiation. The Panel in Mexico — HFCS would not have even considered the question of whether rejection of the application was warranted if it had not considered that Article 5.8 applies before initiation.” (385) 286. On the issue of whether Article 5.8 applied only after the initiation of an investigation, the Panel on Guatemala — Cement I reached the same conclusion as the Panel on Guatemala — Cement II.(386) However, the Appellate Body found that the dispute was not properly before the Panel and did not reach any conclusion on the interpretation of Article 5.8 by the Panel(387), and accordingly, the Panel Report on Guatemala — Cement I was adopted as reversed by the Appellate Body.(388) 287. The Panel on US — Lumber V stated that Article 5.8 does not require an investigating authority, after initation, to continue to assess the sufficiency of the evidence in the application and to terminate the investigation on the grounds that other information undermines the sufficiency of that evidence: “We can however find no basis to conclude that Article 5.8 imposes upon an investigating authority a continuing obligation after initiation to continue to assess the sufficiency of the evidence in the application and to terminate the investigation on the grounds that other information undermines the sufficiency of that evidence. Once an investigation has been initiated on the basis of sufficient evidence of dumping, the application has served its purpose. Logically, the continuing obligation to terminate an investigation where an investigating authority is satisfied that there is not sufficient evidence to justify proceeding must be based on an assessment of the overall state of the evidence deduced before it in the investigation, not on an assessment of the continuing sufficiency of the information in the application. We are of the view that it could not have been the intention of the drafters of Article 5.8 that its interpretation could result in that an investigation could have been initiated on the basis of sufficient evidence, but that the very same investigation had to be terminated if additional evidence was made available by the respondents at a later stage, while the evidence being gathered during the course of the investigation, indicates dumping”.(389) 288. The Panel on US — DRAMS was called upon to decide whether the scope of Article 5.8, as defined by the word “cases” in the second sentence, includes both anti-dumping investigations and Article 9.3 duty assessment procedures. The Panel held that it did not see “how the sufficiency of evidence concerning a subsequent duty assessment could be relevant to the treatment of an ‘application’ or the conduct of an ‘investigation’”: “First, the term ‘case’ is used in the first sentence of Article 5.8. The first sentence is concerned explicitly and exclusively with the circumstances in which an ‘application’ (‘under [Article 5,] paragraph 1’) shall be rejected and an ‘investigation’ terminated as a result of insufficient evidence to justify proceeding with the ‘case’. As the treatment of the ‘application’ and conduct of the ‘investigation’ is dependent on the sufficiency of evidence concerning the ‘case’, we consider that the term ‘case’ in the first sentence must at least encompass the notions of ‘application’ and ‘investigation’. In our view, it would [be] meaningless for the term ‘case’ in the first sentence to also encompass the concept of an Article 9.3 duty assessment procedure, since we fail to see how the sufficiency of evidence concerning a subsequent duty assessment could be relevant to the treatment of an ‘application’ or the conduct of an ‘investigation’, both of which precede the Article 9.3 duty assessment procedure. As we consider that the term ‘case’ in the first sentence of Article 5.8 does not include the concept of ‘duty assessment’, we see no reason to adopt a different approach to the term ‘cases’ in the second sentence of that provision.”(390) 289. Having determined that that term “cases” in Article 5.8 does not encompass the concept of an Article 9.3 duty assessment procedure(391), as referenced in paragraph 288 above, the Panel on US — DRAMS then concluded that “Article 5.8, second sentence, does not require Members to apply a de minimis test in Article 9.3 duty assessment procedures”.(392) The Panel described the function of the Article 5.8 de minimis test as “to determine whether or not an exporter is subject to an anti-dumping order” and clearly distinguished this from any de minimis test applied under Article 9.3 duty assessment procedures.(393) 290. For further discussion of this issue by the Panel on US — DRAMS, see also paragraphs 461–462 below. 291. On 27 November 2002, the Committee on Anti-Dumping Practices adopted the “Recommendation concerning the time-period to be considered in making a determination of negligible import volumes for purposes of Article 5.8 of the Agreement”.(394) In this Recommendation, the Committee on Anti-Dumping Practices notes that Article 5.8 of the Anti-Dumping Agreement, which provides that there shall be immediate termination in cases where the authorities determine that the volume of dumped imports, actual or potential, is negligible, does define the volume of dumped imports from a particular country that shall normally be regarded as negligible but does not however establish a period of time over which imports are to be counted in determining whether the volume of imports is negligible. The Committee therefore considered that guidance regarding an appropriate time-period for that determination would be useful. Accordingly, the Committee on Anti-Dumping Practices recommends: “… with respect to original investigations to determine the existence of dumping and consequent injury, whether the volume of dumped imports, actual or potential, from a particular country is regarded as negligible shall be determined with reference to the volume of dumped imports from that country during:
(a) the period of data collection for the dumping investigation; or
(b) the most recent 12 consecutive months prior to initiation for which data are available; or
(c) the most recent 12 consecutive months prior to the date on which the application was filed, for which data are available, provided that the lapse of time between the filing of the application and the initiation of the investigation is no longer than 90 days.
Not later than 60 days after the approval of this recommendation Members shall notify to the Committee on Anti-Dumping Practices which of the time-periods set out above, they will use in all investigations thereafter. If in any investigation the chosen methodology is not utilized, one of the two other methodologies shall be adopted, and an explanation shall be made in the public notice or separate public report of that investigation. Members which adopt the time-period mentioned in item (c) above shall also notify which of the other two time-periods they shall use in any case in which the lapse of time between the filing of the application and the initiation of the investigation is longer than 90 days, unless a Member’s domestic law prohibits such a lapse.”(395) (e) Relationship with other paragraphs of Article 5 292. With respect to the relationship between Articles 5.3 and 5.8, see paragraph 283 above. 8. Relationship with other Articles 293. The Guatemala — Cement II Panel referred to footnote 1 to Article 1 in interpreting Article 5.5. See paragraph 269 above. 294. In Guatemala — Cement II, the Panel found that the subject anti-dumping duty order of Guatemala was inconsistent with several articles of the Anti-Dumping Agreement, among them Article 5. The Panel then opined that Mexico’s claims under other articles of the Anti-Dumping Agreement, among them Article 1, were “dependent claims, in the sense that they depend entirely on findings that Guatemala has violated other provisions of the AD Agreement.”(396) In light of this dependent nature of Mexico’s claim, the Panel considered it not necessary to address these claims. See also paragraph 5 above. 295. The Panel on Guatemala — Cement II discussed the relationship between Articles 2, 5.2 and 5.3 in order to clarify the requirements under Article 5.3. See paragraph 248 above. 296. The relationship between Article 5.2(iv) and Articles 3.2 and 3.4 was discussed in Mexico — Corn Syrup. See paragraph 238 above. 297. In Thailand — H-Beams, the Appellate Body referred to Articles 3.7, 5.2 and 5.3 in interpreting Article 3.1. See paragraph 112 above. 298. Article 3 was discussed in interpreting which elements of “injury” have to be supported by sufficient evidence under Article 5.3 in Guatemala — Cement II. See paragraphs 253–254 above. 299. In Guatemala — Cement II, the Panel referred to Article 5.10 in examining Mexico’s claim under Article 6.1.3. See paragraph 325 below. 300. Also, in US — DRAMS, the Panel discussed the relationship between Articles 5.8 and 9.3. See paragraphs 288–289 above, and 461–462 below. 301. In Guatemala — Cement II, the Panel found that the subject anti-dumping duty order of Guatemala was inconsistent with several articles of the Anti-Dumping Agreement, among them Article 5. The Panel then determined that Mexico’s claims under other articles of the Anti-Dumping Agreement, among them Article 9, were “dependent claims, in the sense that they depend entirely on findings that Guatemala has violated other provisions of the AD Agreement.”(397) In light of this dependent nature of Mexico’s claim, the Panel considered it not necessary to address these claims. See also paragraph 5 above. 302. In US — Hot-Rolled Steel, the Panel interpreted the term “sufficient evidence” in Article 10.7 by reference to Article 5.3. See paragraph 483 below. 303. The Panel on Guatemala — Cement II touched on the relationship between Articles 5.3 and 12.1 in addressing a claim under Article 12.1. See paragraph 548 below. 304. In Thailand — H-Beams, the Panel examined Poland’s argument that Article 12 of the Anti-Dumping Agreement is “useful context” in connection with its Article 5.5 claim. The Panel responded as follows: “We note that both Articles 5.5 and 12.1 contain a requirement to notify the government of the exporting Member concerned of certain events connected with the initiation of an investigation at a certain point in time. However, it is clear that the requirements as to the timing, form and content of these notifications is different. Article 5.5 makes it clear that the notification referred to in that provision must take place ‘after receipt of a properly documented application and before proceeding to initiate an investigation’. By contrast, Article 12.1 of the AD-Agreement concerns notification of initiation, as it requires notification to ‘the Member or Members the products of which are subject to such investigation …’, ‘[w]hen the authorities are satisfied that there is sufficient evidence to justify the initiation of an anti-dumping investigation pursuant to Article 5 …’ and requires ‘public notice’ of initiation. As Article 12.1 provides that such ‘public notice’ must ‘contain, or otherwise make available through a separate report, adequate information….’, the notice must presumably be in writing. Furthermore, Article 12 involves the notification of a decision to initiate, which a Member may not yet have taken at the time of an Article 5.5 notification. That Article 12 specifically enumerates certain requirements with respect to the contents and form of the notice it requires, and Article 5.5 does not, strongly suggests to us that the requirements of Article 12 do not apply to notification under Article 5.5, and in no way changes our interpretation of the requirements concerning the timing, form and content of the notification to be given under Article 5.5.”(398) 305. With respect to the application of Article 17 in the examination required under Article 5.3, see paragraphs 256–259 above. 306. In Guatemala — Cement II, the Panel found that the subject anti-dumping duty order of Guatemala was inconsistent with several articles of the Anti-Dumping Agreement, among them Article 5. The Panel then found that Mexico’s claims under other articles of the Anti-Dumping Agreement, among them Article 18, were “dependent claims, in the sense that they depend entirely on findings that Guatemala has violated other provisions of the AD Agreement.”(399) In light of this dependent nature of Mexico’s claim, the Panel considered it not necessary to address these claims. See also paragraph 5 above. 9. Relationship with other WTO Agreements (a) Article VI of the GATT 1994 307. In Guatemala — Cement II, the Panel found that the subject anti-dumping duty order of Guatemala was inconsistent with several articles of the Anti-Dumping Agreement, among them Article 5. The Panel then opined that Mexico’s claims under other articles of the Anti-Dumping Agreement and under Article VI of GATT 1994, were “dependent claims, in the sense that they depend entirely on findings that Guatemala has violated other provisions of the AD Agreement.”(400) In light of this dependent nature of Mexico’s claim, the Panel considered it not necessary to address these claims. See also paragraph 5 above.
Footnotes: 126. Appellate Body Report on
Thailand — H-Beams, para. 106. back to text |
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