RESTRICTED
WORLD TRADE G/ADP/W/32
G/SCM/W/39
ORGANIZATION 13July1995
(95-1972)
Original: English Committee onAnti-Dumping Practices
Committee onSubsidies andCountervailing Measures
QUESTIONS CONCERNINGTHE NOTIFICATIONS PROVIDED
BYTHE GOVERNMENT OFCHILE OFLAWS AND
REGULATIONS UNDER ARTICLES 18.5AND 32.6THE AGREEMENTS
Thefollowing communication, dated 7July,hasbeenreceived fromtheHong Kong Economic
andTrade Office.
_______________
Myauthorities haveasked metoforward toyouthequestions andcomments ontheChilean
A-Dlawsandregulations forthepurpose oftheSpecial Joint A-DandSCM Committees meeting
scheduled fortheweek of17Julyforcirculation toallMembers.
(Articles 10&11ofLawNo.18,525 andDecree No.575Adopted thereunder)
Notification ofA-Dregulations under Article 18.5
Article 18.3oftheWTO A-DAgreement provides thateachMember shalltakeallthenecessary
steps, ofageneral orparticular character, toensure, notlaterthanthedateofentry intoforce ofthe
WTO Agreement forit(i.e.1January 1995), theconformity ofislaws, regulations andadministrative
procedures withtheprovisions oftheWTO A-DAgreement.
The Chilean notification under Article 18.5, asreproduced intheWTO Document
G/ADP/N/1/CHL/1-G/SCM/N/1/CHL/1,providesthat,asfarastheanti-dumpingaspectisconcerned-
(a) theAgreement onImplementation ofArticle VIoftheGeneral Agreement onTariffs
andTrade 1994 (WTO A-DAgreement) areapplied withforce oflawinChile;
(b) adraftLawisbeing prepared topermit anumber ofadministrative changes; and
(c) untilthedraftisapproved, theexisting legislation i.e.Article 11ofLawNo.18,525
anditsmost recent Regulation, Decree No.575of17June1993, apply toA-D
investigations, insofarastheyarenotinconsistent withtheWTO A-DAgreement.
Comment :
Thebringing intoeffect ofinternational treaty provisions inthemunicipal legalsystem isan
exclusive matter foreachWTO member inaccordance withitsownlaws. Weunderstand thatitis
notuncommon incertain countries thattreaty provisions canhavedirect effect inthemunicipal legalG/ADP/W/32
G/SCM/W/39
Page2
system, subject tosome specific actofincorporation asisrequired bythelawsofthecountry concerned.
Weareinterested intheoperation ofthemunicipal legalsystems ofthese countries onlytotheextent
thatweneedtosatisfy ourselves thattheobligations under theWTO A-DAgreement havebeenfaithfully
implemented inthelawsofWTO members.
Question :
1. Onwhat legal basis, judicial practice orcertain constitutional provisions, istheWTO A-D
Agreement applied withforce oflawinChile? Oritisjustamatter ofexecutive practice?
2. Arethere anysignificant qualifications inapplying theWTO A-DAgreement withforce of
lawinChile?
3. Doestheincorporation oftheWTO A-DAgreement intoChile'smunicipal legalsystem require
anyspecific actsuchaspublication oftheAgreement inanyofficial medium orapproval by
aspecific municipal legislation? Ifso,whatisthespecific actandwhen wasitcompleted?
Chile'smunicipal legal system
TheChilean notification provides thatArticle 11ofLawNo.18,525 andRegulation ofDecree
No.575continues tobeapplicable insofartheyarenotinconsistent withtheWTO A-DAgreement.
Comment:
Therelationship between theWTO A-DAgreement andtherelevant Chilean legislation in
themunicipal legalsystem mayhaveimplications onwhether theWTO A-DAgreement is,orcould
be,qualified inaprejudicial manner.
Question:
4. DoestheWTO A-DAgreement takeprecedence overtheinconsistent municipal legalprovisions
byvirtue ofitshigher ranking intheChile'smunicipal legalsystem, orbyvirtue ofitslaterdateof
incorporation intothelegal system? Between theprovisions oftheWTO A-DAgreement anda
municipal lawofChile ofanequal orhigher ranking enacted aftertheincorporation oftheWTO A-D
Agreement, which takesprecedence incaseofinconsistencies? Would Chile confirm thattheprovisions
oftheWTO A-DAgreement arenotinconsistent withanymunicipal lawwithahigher ranking inChile's
legalsystem?
Direct application oftheWTO ADAgreement inChile
Comment:
TheWTO A-DAgreement isdrafted asaninternational treaty, notasapiece ofmunicipal
legislation. Depending onthesituation ofaWTO member, direct application ofitsprovisions may
notbeassmooth asthatofmunicipal legislative provisions. Ifinpractice theChilean authorities always
prefer municipal legislation totheWTO A-DAgreement, thelegaleffect oftheWTO A-DAgreement
would beundermined.G/ADP/W/32
G/SCM/W/39
Page3
Question:
5. How aretheprovisions oftheWTO A-DAgreement applied withforce oflawinChile? In
theconduct ofanti-dumping proceedings, would theexecutive, National Commission andthecourts
takeWTO A-DAgreement astheprimary source oflegalauthority inthesame wayastheytakethe
municipal law? Orwould theyonlyrefertotheWTO A-DAgreement asasupplement tothemunicipal
legislation orasalastresort?
6. Would theChilean authorities havedifficulties inapplying theprovisions oftheWTO A-D
Agreement, drafted asaninternational agreement, initsday-to-day operation? Would theChilean
authorities bemore comfortable andprefer tofollow dedicated municipal legislation incompliance
withtheprovisions oftheWTO A-DAgreement?
Chilean draft Lawonanti-dumping legislation
TheChilean notification provides thatadraft Lawisbeing prepared topermit anumber of
administrative changes.
Question:
7. What arethelegislative intentions ofthedraftlawunder preparation? Isitmeant tobring changes
purely ofanadministrative nature, ortoamend themunicipal lawinawaytoremove andrectify all
provisions thatareinconsistent withtheWTO A-DAgreement? What isthelegalstatus ofthenew
law? Would theWTO A-DAgreement takeprecedence overit?Would Chile notify thenewLaw
asrequired byArticle 18.5ofWTO A-DAgreement?
Inconsistencies intheChilean A-Dlegislation
Comment:
Wehaveidentified areas intheChilean legislation which arenotconsistent withtheWTO A-D
Agreement, suchas-
- confidentiality (Articles 8&14ofDecree No.575, p.6&p.8)
- standingrequirementsforcomplainants(Article10ofDecreeNo.575,para.1,
p.7)
- noticeofprovisionalrecommendation(Article21ofDecreeNo.575,2ndpara.,
p.10)
- modification ofaprovisional measure (Article 23ofDecree No.575, p.10)
Question:
8. Would Chile confirm thatinthese cases, therelevant provisions oftheWTO A-DAgreement
would prevail andtheChilean authorities would faithfully follow theprovisions oftheWTO A-D
Agreement? Does Chile haveanyintentions toamend itslegislation inthisareas tobring itinto
conformity withtheWTO A-DAgreement? (Anelaboration onexamples ofthese inconsistencies is
attached.)G/ADP/W/32
G/SCM/W/39
Page4
Keyissues which arefound silent intheChilean A-Dlegislation
Comment:
TheChilean legislation issilent onanumber ofkeyissues onwhich therearespecific provisions
intheWTO A-DAgreement, including -
. definition oflikeproducts
. methodology intheestablishment ofnormal value andexport price including methodology in
calculating costs
. requirements offaircomparison andmaking dueallowance
. comparison methodology between normal value andexport price
. determination ofinjury andrelevant factors forconsideration
. requirements inmaking cumulative assessment ofinjury
. determination ofindustry support
. termination ofinvestigation incaseofdeminimis dumping margin andnegligible imports
. evidential requirements inproceedings
. definition ofinterested parties
. requirements toprovide opportunities toconsumer groups andindustrial users toprovide
information
. on-site verification procedures
. review procedures
. provision forjudicial review
Question:
9. Would Chile confirm thatitwould follow strictly therelevant provisions oftheWTO A-D
Agreement onthese issues? Does Chile haveanyintentions toenact newprovisions onthese issues
inconformity withtheWTO A-DAgreement?G/ADP/W/32
G/SCM/W/39
Page5
Examples ofprovisions intheChilean legislation which areinconsistent with theWTO A-D
Agreement
(Articles 10&11ofLawNo.18,525 andDecree No.575adopted thereunder)
Decree No.575
Title 1--TheNational Commission
1. Article 8&Article 14--Confidentiality
Article 6.5.2 oftheWTO A-DAgreement setsoutthecondition forwhich the"confidential"
information, ifnotbyitsnature confidential andthesupplier oftheinformation refuses toprovide
anon-confidential summary, maybedisregarded unless itcanbedemonstrated totheauthorities '
satisfaction from appropriate sources thattheinformation iscorrect .
However, Article 8andArticle 14ofDecree No.575(p.6andp.8respectively) donotprovide
fortheconsideration ofsuchinformation evenifitscorrectness canbedemonstrated andsecured.
Comment :Thisisnotconsistent withArticle 6.5.2 oftheWTO A-DAgreement. Besides, as
stated inFootnote 18tothisArticle, requests forconfidentiality should notbearbitrarily
rejected. Thefootnote isadded toensure norelevant andcritical information isto
bedisregarded soastosecure thefairness throughout theA-Dinvestigation process.
TitleII--Complaints andInvestigations ofDistortions inthePrices ofImported Goods
2. Article 10,para. 1--Standing requirements forcomplainants
Article 5.4oftheWTO A-DAgreement stipulates thataninvestigation shallnotbeinitiated
unless theapplication (i.e.thecomplaint) hasbeenmade byoronbehalf ofthedomestic industry.
TheArticle specifically indicates thepercentages oftotalproduction ofthelikeproduct produced by
thedomestic industry required toexpress support fororopposition totheapplication required tobe
considered as"onbehalf ofthedomestic industry".
Article 10ofDecree No.575 (p.7), however, states thatacomplaint maybemade byanynatural
orlegal person concerned .Nospecific standing requirements forthecomplainants isstated.
Comment :Thisisnotconsistent withArticle 5.4oftheWTO A-DAgreement inthatitdoesnot
require thecomplainants toprove thattheyare"onbehalf ofthedomestic industry".
Theconsequence isthattherewillbeafluxofcomplaints, nomatter whether itislodged
intheinterests ofthedomestic industry, incaseanynatural orlegalperson concerned
could make acomplaint. Itisnotonlyaburden toexporters theproducts ofwhich
arealleged tobedumped toChile, butalsototheChilean authorities which should
examine ineachandevery complaint toconsider whether theparticulars specified in
thecomplaints havebeensatisfactorily provided (Article 11ofDecree No.575) before
regarding itasbeformally lodged.G/ADP/W/32
G/SCM/W/39
Page6
Title III--Provisional Measures
3. Article 21,2ndpara. --Notice ofprovisional recommendation
Article 12.2.1 oftheWTO A-DAgreement provides theinformation tobeincluded inthepublic
notice oftheimposition ofprovisional measures, suchasthenames ofthesuppliers, theproduct
description, themargin ofdumping established andafullexplanation ofthereasons forthemethodology
usedintheestablishment andcomparison oftheexport price andthenormal value.
IntheextractoftherecommendationmadebytheCommissioninrespectofprovisionalmeasures,
asstipulated inthesecond paragraph ofArticle 21ofdecree No.575 (p.10), thescope ofthesummary
ofconsiderations taken intoaccount bytheCommission issetoutindetail. There isnomention of
information concerning themargin ofdumping established, explanation ofthereasons forthe
methodology usedintheestablishment andcomparison oftheexport price andthenormal value.
Comment :Theomission ofsuchreporting details, although onlyinthenotice ofarecommendation
ofaprovisional measure, undermines theexporters 'rights torebut thecalculation of
dumping margin, aswellastocomment onthemethodology usedbytheauthorities
intheestablishment andcomparison oftheexport price andthenormal value. This
isnotconsistent withthespirit oftheWTO A-DAgreement toenhance transparency
inA-Dinvestigation process. Thisisanexample where theWTO A-DAgreement
hassetouttherequirements onanissueindetail while theChilean legislation hasleft
ittothediscretion ofitsauthorities.
4. Article 23--Modification ofaprovisional measure
TheWTO A-DAgreement doesnotprovide foranymodification ofaprovisional measure.
Itonlyprovides forthetimelimitforitsapplication, asindicated inArticle 7.4oftheAgreement.
Article 23ofDecree no.575 (p.10) however states thattheCommission mayatanytimerequest
tomodify aprovisional measure.
Comment :Aprovisional measure, being atransitional measure toprevent injury being caused
during theinvestigation (Article 7.1(iii)oftheWTO A-D Agreement) once a
preliminary affirmative determination hasbeenmade ofdumping andconsequent injury
toadomestic industry (Article 7.1(ii)oftheWTO A-DAgreement) isnormally
equivalent totheprovisionally estimated dumping margin, which isalready calculated
bycomparing thenormal value andtheexport pricebased ontheinformation presented
totheCommission. Anyrequirement tomodify aprovisional measure cantherefore
only becaused byachange intheestimation ofdumping margin, orasudden
aggravation oftheinjury caused. Thearbitrary sense ofArticle 23ofDecree No.575,
however, does notmention what causes theCommission torequest tomodify a
provisionalmeasureandwhatwouldbeexaminedforthedeterminationofthemagnitude
ofthemodification.