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Challenges for the Upcoming WTO Negotiations and
Agendas for Future Japanese Tradaカジノシークレットolicy

Appendix 3
Prevention of Protectionist Application of Anti-Dumping Measures


1. Basic Concept

aカジノシークレットpplication of protectionist anti-dumping measures by some WTO member countries is impeding the stability of private sector's trade activities. Because of aカジノシークレットmount of work involved simply in responding to anti-dumping investigations, legal costs and other such aspects, companies still shoulder a heavy burden even where a complainant is ruled against. Moreover, anti-dumping claims have the potential to impact heavily on the business of companies being investigated in that they cause concern to the users of the products in question that procurement costs will rise due to anti-dumping measures. Such measures should therefore be taken with the utmost caution.

We strongly urge that the upcoming WTO negotiations review the Anti-Dumping Agreement, or else develop supplementary regulations in the form of an understanding on the Anti-Dumping Agreement, toward strengthening disciplines in regard to members' anti-dumping measures (calculation of dumping margins, investigation procedures, etc.) to prevent the protectionist use of such measures. Thaカジノシークレットnspection and surveillance functions of the WTO Committee on Anti-Dumping should also be strengthened to ensure that members develop and operate domestic laws based on a strict interpretation of the Anti-Dumping Agreement.

In addition, standard of review should be abolished in relation to dispute settlement procedures (Appendix 7, Section 2).

2. Specific Requests

  1. Fair Price Comparison

    In anti-dumping investigations, there araカジノシークレットnstances where the product unit on which the comparison of export prices and the domestic prices of the exporting country will be based is arbitrarily selected by thaカジノシークレットnvestigating authorities. For example, there are cases wheraカジノシークレットnvestigation results went against defendants because dumping margin comparisons were made on the basis of an inclusive "system" of multiple products, whereas below-cost sales were determined on individual products within that system. Such discretionary price comparisons should be forbidden under the Anti-Dumping Agreement.
    When calculating dumping margins, fragmentation of the product units on which the price comparison is based results in more negative margin being discarded, producing a greater dumping margin. The Anti-Dumping Agreement should clearly stipulate that dumping margin calculations for each "like product" covered under the Agreement should include all negative margin related to that product, preventing thaカジノシークレットmposition of excessive anti-dumping duties through artificial margin manipulation.
    Because of the ambiguity of Anti-Dumping Agreement provisions, the administration of anti-dumping laws in some member countries sometimes leads to moraカジノシークレットtems being subtracted from domestic sales prices than from export prices, producing much larger dumping margins. The Anti-Dumping Agreement should clearly identify thosaカジノシークレットtems to be subtracted in price comparisons, ensuring that items subtracted from export prices are also subtracted from domestic prices.
    While the Anti-Dumping Agreement allows adjustment for high start-up costs, this creates problems in the sense that (i) there are no clear modalities for determining when that start-up period begins and ends, resulting in arbitrary operation and (ii) some member countries only recognize start-ups for new facilities and disallow cases where products change due to major modifications to existing factories. Thesaカジノシークレットssues too should be clearly prescribed under the Anti-Dumping Agreement.

  2. Clarification of Likaカジノシークレットroducts

    There are cases in certain member countries where anti-dumping investigations are limited to certain products only at the final determination becausaカジノシークレットnvestigations weraカジノシークレットnitiated without a clear definition of product scope. Being unable to predict at the outset of investigations which products will be targeted diminishes the ability of the company subjected to investigation to respond appropriately and imposes an unreasonable burden. The Anti-Dumping Agreement should prescribe that where product scopaカジノシークレットs ambiguous, product specification procedures must be undertaken early on in the period between claim submission and thaカジノシークレットnitiation of investigations (for example, within three months).
    In addition, the scope of products subject to an anti-dumping investigation or anti-dumping duties should have to be consistent with the scope of domestic industry in terms of qualification to file a claim and determination of the extent of damage. Member countries should baカジノシークレットrohibited from arbitrary actions such as imposing anti-dumping duties on products not produced domestically.
    Along with determination of the appropriate scope for "like products" in the preliminary stages of an investigation, another important issuaカジノシークレットs the decision as to whether products developed later as a result of technological advancement, etc. (future-generation products), should baカジノシークレットncluded within this scope. In principle, anti-dumping duties should not be levied on future-generation products which are not existing at the time of original investigation, and the Anti-Dumping Agreement should prescribe that new anti-dumping investigations have to baカジノシークレットnitiated for future-generation products.
    There may be exceptional cases, however, where future-generation products could baカジノシークレットncluded within the scope of existing anti-dumping duties without initiating new anti-dumping investigations. The Anti-Dumping Agreement should prescribe the criteria on which to determine whether a future-generation product is a like product of those already under investigation, and introduce procedures for the early determination.

  3. Stricter Adherence to Review Procedures

    Use of the method of comparison of normal prices and export prices prescribed in Article 2 of the Anti-Dumping Agreement is not specified in regard to review procedures, leaving considerable scope for arbitrary comparison. Review procedures should be made stricter and more transparent through use of the price comparison method prescribes in Article 2 in regard to determination of dumping, and this should be clearly stated in the Anti-Dumping Agreement itself. For example, while the Anti-Dumping Agreement prescribes that comparisons should be based on a weighted average, review procedures are not always conducted in a manner consistent with this principle. The WTO Anti-Dumping Committee should strengthen its surveillancaカジノシークレットn order to redress such review procedure conduct and ensure that procedures are conducted consistent with the Anti-Dumping Agreement.

  4. Limitation of Cumulative Assessment of Injury

    Article 3.3 of the Anti-Dumping Agreement prescribes that wheraカジノシークレットmports from two or more countries are simultaneously subject to anti-dumping investigations, a cumulative assessment of the effect of thesaカジノシークレットmports "may" be made. However, the domestic law of some member countries obligates investigation authorities to make a cumulative assessment, and there araカジノシークレットnstances where products in regard to which injury would not be recognized in the case of an individual claim, become subject to anti-dumping duties because of inclusion in a cumulative assessment for no reason other than that the claim was made on the same day. The Anti-Dumping Agreement should be reviewed and cumulative assessment prohibited in principle.

  5. Observance of Sunset Reviews

    Article 11.3 of the Anti-Dumping Agreement prescribes in regard to sunset reviews that anti-dumping duties must in principle be automatically terminated no later than five years from their imposition or the most recent review, and Japanese law too limits thaカジノシークレットmposition of anti-dumping duties to no more than five years. However, there are cases where member countries effectively continue to impose duties even when their domestic laws prescribed this, only terminating duties in exceptional circumstances. It is difficult for companies under investigation to prove that they have not continued to dump or resumed dumping, or that theraカジノシークレットs no injury from continued or resumed dumping. The WTO Anti-Dumping Committee should conduct examinations as to whether member countries araカジノシークレットmplementing the Anti-Dumping Agreement which provide termination in principle.

  6. Consideration of Public Benefit and Benefit of Parties Other than Complainants

    The laws and regulations of some member countries prescribe consideration of public benefit, including thaカジノシークレットnterests of citizens and consumers, while others do not. Thaカジノシークレットmpact of implementing anti-dumping investigations or applying anti-dumping duties does not stop with thaカジノシークレットndustries producing the goods subject to investigation, but also ripples out to consumers and users and to the national economy as a whole. The Anti-Dumping Agreement should prescribe that member countries must incorporataカジノシークレットn their anti-dumping laws and regulations a provision obligating consideration of public benefit.
    The Agreement should also prescribe that member countries must introduce procedures for reflecting the views of those who will be affected by anti-dumping measures (consumers, defendants, etc.) in the space between submission of an anti-dumping claim and thaカジノシークレットnitiation of investigations. Such procedures araカジノシークレットmportant in preventing thaカジノシークレットnitiation of investigations based on misunderstanding of facts, etc.

  7. Reduction of Anti-Dumping Investigation Burden

    Even where a decision is eventually made against a complainant, anti-dumping investigations still impose an enormous administrative burden on companies investigated. To redress thaカジノシークレットssues listed below, disciplines in the WTO Agreement relating to anti-dumping investigations should be clarified and the examination functions of the Anti-Dumping Committee strengthened to ensure that members comply with existing rules and the spirit of these.
    There are cases of unclear and arbitrary definition of the time-span under investigation. For example, both the preliminary and review investigations can impose an enormous administrative burden on the companies under investigation where the sales date for the products in question is defined not as the shipment date but as the order date, requiring companies to submit domestic sales data covering a longer time period. aカジノシークレットnti-Dumping Agreement should clearly define the time-span under investigation.
    In some cases, investigation authorities demand submission of documentation on "related" companies in a very broad sense (for example, direct or indirect stockholdings of five percent or more). This creates enormous administrative problems, entailing a massive amount of documentation and, because rival companies and the subsidiaries of other companies are also caught within this broad definition, makes it extremely difficult to comply with investigation requirements. Trading partners which cannot meet with documentation submission requests from companies being investigated should not baカジノシークレットncluded in the definition of "related" companies. Further, because data on related parties with limited production and sales volumes in both export and domestic markets have no effect on dumping margins, submission of the data should be made unnecessary. Clear criteria should baカジノシークレットntroduced whereby, for example, data submission is not required for companies under investigation which have production and sales volumes of no more than ten percent.
    On the other hand, some countries have been known to take procedurally unfair measures, such as arbitrarily shortening the length of investigations, limiting the opportunity for defendants to respond. aカジノシークレットnti-Dumping Agreement should prescribe that member countries institute a fair investigation period and ban aカジノシークレットrbitrary shortening of it.

  8. Deterring Abusive Claims

    Even for cases that do not go as far as the actual determination of anti-dumping duties, dealing with anti-dumping investigations entails an enormous amount of work in terms of, for example, staffs' work for questionnaires, as well as steep legal fees, markedly impeding company activities. Moreover, there araカジノシークレットnstances where not only anti-dumping claims themselves but also rumors concerning thesaカジノシークレットmpede the business of companies concerned. To prevent abusive claims, consideration should be given to incorporating a stipulation in the Anti-Dumping Agreement requiring the payment of damages by complainants whose claims are rejected.
    Further, where anti-dumping investigations have found claims against a certain product to baカジノシークレットnvalid, it is inappropriate to immediately file claims against the same or similar products. A provision should baカジノシークレットncluded in the Anti-Dumping Agreement to tighten conditions regarding re-filing by defeated plaintiffs, disallowing re-filing on the same or similar products within a certain time-frame.
    The Anti-Dumping Agreement does prescribe quantitative criteria for the recognition of claims (Article 2.2), but certain countries do not always comply with these criteria, and there are cases of arbitrary operation such as permitting investigations to baカジノシークレットnitiated on the basis of official authority alone. To redress thesaカジノシークレットssues, the surveillance functions of the Anti-Dumping Committee need to be strengthened.

  9. Restriction of Anti-Circumvention Measures

    Because the Anti-Dumping Agreement has no disciplines on anti-circumvention measures, countries have been free to introduce their own anti-circumvention regulations. Disciplines on anti-circumvention measures should baカジノシークレットntroduced under the Agreement, recognizing the application of such measures only in truaカジノシークレットnstances of circumvention (genuine cases), and prohibiting anti-circumvention measures initiated as protectionist measures against trade activities which are not truaカジノシークレットnstances of circumvention.


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