  WORLD TRADE  
ORGANIZATION  G/SG/Q2/CHN/7 
4 October 2004 
 (04-4143) 
Committee on Safeguards Original:   English 
   
QUESTIONS AND COMMENTS OF JAPAN WITH 
REGARD TO THE TRANSITIONAL REVIEW 
MECHANISM IN CONNECTION WITH PARAGRAPH 18 
OF THE PROTOCOL OF ACCESSION OF THE 
PEOPLE'S REPUBLIC OF CHINA 
(REGARDING THE IMPLEMENTA TION BY CHINA OF ITS 
COMMITMENTS ON THE COMMITTEE ON SAFEGUARDS) 
 
 
 The following communication, dated 27 September 2004, is being circulated at the request of the Delegation of Japan. 
 
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 1. Japan welcomes that, in the third year after accession, implementation by China of its 
commitments on the Committee on Safeguards has progressed and entered into a cruising phase.  In a 
transitional period of evolving regulations, the impor tance of regulatory transparency, predictability, 
stability and consistency is paramount; the value of  market access commitments and the efforts to 
implement them could be easily clouded out by a s hortness of such elements either in regulations 
themselves or in their application.  The transiti onal review mechanism could be useful for making 
those transitional efforts more efficient and producti ve, and it is a pleasure for Japan to contribute to 
this process. 
 2. In this context, China is further invited to take necessary steps to ensure regular and effective 
application of public comments procedures, well- in-advance publication of laws and regulations, 
avoidance of abrupt regulatory change, clear demarcation of departmental responsibilities, improvement in inter-departmental and central- provincial coordination and consistency, etc. 
 
3. In accordance with Paragraph 18 of the Prot ocol on the Accession of the People’s Republic of 
China, which states that “China shall provide releva nt information to each subsidiary body in advance 
of the review” and in the spirit of cooperation to render the TRM process most efficient and effective, 
Japan requests China to provide in advance of the Committee on Safeguards responses and relevant 
information to the following questions and comments; 
 (a)  As we understand it, China’s domestic regulations on safeguards ( The Regulations of the 
People’s Republic of China on Safeguards ) do not have the requirement of “as a result of 
unforeseen developments”, which is containe d in article XIX of GATT, and the WTO 
Appellate Body’s jurisprudence clarifies that it is one of the requirements to be considered 
when a Party applies a safeguard.  Therefor e, we would like to be advised how this 
requirement is implemented under th e laws and regulations of China. 
 (b)  Article 3.1 of the Agreement on Safeguards s tipulates that, during the investigation process, 
all interested parties may submit their views as to whether or not application of a certain 
safeguard measure would be in the public in terest.  How do China’s domestic regulations G/SG/Q2/CHN/7 
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guarantee the element of “publicity” as set out in Article 3.1 of the Agreement on Safeguards during the investigation process? 
 (c)  Article 12 of The Regulations of the People’ s Republic of China on Safeguards states that the 
investigation may be conducted by means of se nding questionnaires, holding public hearings, 
or “other appropriate means”.  We would like to ask you for a more concrete explanation on 
what “other appropriate means”. means 
 (d)  In order to meet the requirements of “domes tic industry”, to what degree does China consider 
it necessary to offer a “reasoned conclusion” (referred to in Article 3.1 of the WTO 
Agreement on Safeguards)?  For example, do yo u believe that relevant data should be 
disclosed to interested parties?   (This issue relates to the definition of “domestic industry”:  
Article 10 of The Regulations of the People’ s Republic of China on Safeguards almost 
exactly corresponds to Article 4.1 (c) of the WTO Agreement on Safeguards.  However, in 
the case of China’s safeguard measures on st eel, the SETC reported that the 8 domestic 
producers of certain hot-rolled steel products whic h were subject to its investigation could 
represent domestic industry, because the total production of these 8 domestic producers constituted a major proportion of the tota l domestic production of those products.  
Nevertheless concrete information -- such as th e data on which this conclusion was based --
was not provided to us, therefore we were in  a difficult position to decide the reasonableness 
of the above SETC’s report.) 
 
(e)  Article 8.1 of the WTO Agreement on Safe guards specifies provision of compensation, and 
therefore China should also include these provisions concerning compensation in its domestic regulations, as other parties do.  We would li ke to have your comments on this point.  We 
would also like to know at present under which laws or regulations such compensation will be 
provided.  
 (g)  With regard to provisional safeguards, although the provisions of Article 16 of The 
Regulations of the People’s Republic of Chin a on Safeguards is not clear, the terms “clear 
evidence of increase in quantity of an imported pr oduct” in this Article seem to be one of the 
requirements to be fulfilled in applying provisi onal safeguards.  On the other hand, Article 6 
of the Agreement on Safeguards requires “clear evidence that increased imports have caused 
or are threatening to cause serious injury”.  These two requirements are different.  In applying provisional safeguards, evidence required under the Agreement on Safeguards needs to be 
provided.  Therefore, we are of the view that China’s laws and regulations should be clear in 
such point as corresponding to the Agreement on Safeguards.  What comments do you have 
regarding this point? 
 (h)  Please explain what kind of circumstances y ou envisage “in critical circumstances where it 
would cause injury to a domestic industry wh ich would be difficult remedy without the 
application of safeguard measures”, containe d in Article 16 of The Regulations of the 
People’s Republic of China on Safeguards.  Is  this provision different from “in critical 
circumstances where it would cause damage whic h would be difficult to repair” contained in 
Article 6 of the Agreement on Safeguards? 
 (i)  What are the “discriminatory safeguards” referr ed to in Article 31 of The Regulations of the 
People’s Republic of China on Safeguards?  Are “Transitional Product-Specific Safeguards” 
classified as “discriminatory safeguards”?  
 (j)  Article 8.2 of the WTO Agreement on Safeguards specifies that re-balancing  measures shall 
be “substantially equivalent” to safeguard measu res, while Article 31 of The Regulations of 
the People’s Republic of China on Safeguards specifies “corresponding measures”.  What is 
“corresponding measures”?  Does China believe it is  possible to apply re-balancing measures  G/SG/Q2/CHN/7 
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which exceed “substantially equivalent” to saf eguard measures referred to in Article 8.2 
above? 
 
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