RESTRICTED
WORLD TRADE G/ADP/W/237
G/SCM/W/247
ORGANIZATION 5December 1995
(95-3952)
Original: English Committee onAnti-Dumping Practices
Committee Subsidies andCountervailing Measures
QUESTIONS CONCERNING THE NOTIFICATIONS PROVIDED BY
MALAYSIA1OFLAWS AND REGULATIONS UNDER
ARTICLES 18.5AND 32.6OFTHE AGREEMENTS
Thefollowing communication, dated 4December 1995, hasbeenreceived fromthePermanent
Mission ofSingapore.
_______________
1. Normal value: 16(1) oftheActprovides that"thenormal value shallbethecomparable price
actuallypaidorpayableintheordinarycourseoftradeforcomparablemerchandisesoldforconsumption
inthedomestic market oftheexporting country".
Further PartIoftheActdefines "comparable merchandise" asa"merchandise ...thatthe
government considers appropriate foruseinthecalculation ofadumping margin".
Question: Article 2.1oftheWTO A-DAgreement refers to"thecomparable price ...forthe
likeproduct when destined forconsumption intheexporting country". Wewould like
toseekclarification onthescope ofcoverage for"comparable merchandise". Itwould
appear thatthedefinition provided intheMalaysian Actisverybroad andgives
flexibility fortheauthorities toextend beyond the"likeproduct" requirement setout
inArticle 2.1oftheWTO A-DAgreement.
2. Normal value: 16(3) oftheActprovides that"whenever there arereasonable grounds for
believing orsuspecting thattheprices atwhich comparable merchandise isactually soldforconsumption
...arelessthanthecostofproducing thatproduct".
Question: Wewould liketoseekclarification ontheterms "comparable merchandise" andthe
circumstances bywhich "reasonable grounds forbelieving orsuspecting" willbe
established bytheauthorities. Itwould appear thatthese terms areveryloose and
provides fordiscretionary determination.
3. Normal value: 16(5)(a) oftheActprovides thatnormal value maybedetermined onthebasis
oftheremaining salesinthedomestic market made atapricewhich isnotlessthanthecostofproduction
provided thatsuchremaining salesarein"sufficient quantities".
Question: Please clarify whatisdeemed tobe"sufficient quantities"?
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4. Normal value: 16(4) oftheActrefers todetermination ofcostofproduction forconstructing
normal value.
Question: Itisnotclearhowtheauthorities would dealwithcostadjustments forcompanies in
astart-up orexpansion phase. Wewould likemore clarification.
5. Normal value: 16(3) oftheActrefers tosituations when salesmaybeconsidered asnothaving
beenmade intheordinary course oftrade.
Question: Itisnotclear what criteria would beusedfordetermining thatsales arenotinthe
ordinary course oftrade. Thisprovision isvague andwould notbeinlinewith
Article 2.2.1 oftheWTO A-DAgreement. Wewould likesome clarification.
6. Determining normal value byexamining salesinA-Dinvestigations: 26(2)(a) oftheRegulations
provides that"sales ofthecomparable merchandise inthedomestic market donotpermit aproper
comparison where thequantity ofmerchandise soldinthedomestic market issosmall ...".
Question: Pleaseclarifywhatisdeemedtobe"sosmall"?Article2.2oftheWTOA-DAgreement
defines whatthesufficient quantity should beforthedetermination ofthenormal value.
Theuseofthedefinition "sosmall" intheMalaysian Regulations would beopento
arbitrary interpretations.
7. Comparison ofnormal value andexport price: 18(1) oftheActprovides that"theexport price
andthenormal value shall beexamined onacomparable basis toaccount fordifferent physical
characteristics ofthemerchandise ...".
18(3) alsorequires that"where anexporter orimporter claims foranadjustment under sub-
section (1),itmust prove thatitsclaim isjustified.
Question Article 2.4oftheWTO A-DAgreement provides that"afaircomparison shallbemade
between theexport price andnormal value". Itwould appear thatthelanguage inthe
Malaysian Actdoesnotcontain themandatory requirement forafaircomparison.
Wearealsoconcerned with18(3) oftheMalaysian Actwhich imposes anunreasonable burden
ofproof onthose parties when claiming foradjustments. Article 4.2oftheWTO A-DAgreement
makes itclearthat"theauthorities shallindicate totheparties inquestion whatinformation isnecessary
toensure afaircomparison andshallnotimpose anunreasonable burden ofproof onthese parties.
8. Preliminary andfinaldetermination ofdumping andinjury: 23(1)(b) and25(1)(b) oftheAct
provide that"injury isfound toexistwhen thedomestic industry inMalaysia producing thelikeproduct
ismaterially injured byreason ofthesubject merchandise.
21(1)(4) oftheRegulation further explains that"byreason of"shallbeinterpreted tomean
thatthemerchandise under investigation must beacause ofinjury tothedomestic industry.
Question: Wewould likeclarification onwhether thecausality requirement would bemetbythe
term"byreason ofthesubject merchandise". Article 3.5oftheWTO A-DAgreement
requires that"itmustbedemonstrated thatthedumped imports arethrough theeffect
ofdumping, causing injury. Hence theWTO A-DAgreement requires thatthecaused
linkmustbeclearly established. Injury iscaused bytheimpact ofthedumped imports
onthedomestic industry. Injury should notbeattributed toother factors other thanG/ADP/W/237
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thedumped imports ....Itwould appear thattheterm"byreason ofthesubject
merchandise" intheMalaysian Actdoesnotmeetthecausal linkrequirement asset
outintheWTO A-DAgreement.
9. Final determination ofdumping/injury: 25(8) oftheActprovides forimposition ofA-Dduty
onacompany specific basis, where practicable, andonanon-discriminatory basis onallimports of
suchmerchandise intoMalaysia from thecountry found tobedumping thesubject merchandise.
Question: Wewould likeclarification onhowtheMalaysian authorities would treatnegligible
imports, newcomers, andcompanies thathavenotbeeninvestigated?
10. Cumulation: (35)oftheActallows theMalaysian Government "tocumulatively assess the
effects ofsubsidized anddumped merchandise orbothonthedomestic industry.
Question: Weareconcerned withtheprovision. TheWTO A-DAgreement doesnotprovide
forcross-cumulation. Theeffects ofinjury caused bydumped imports should notbe
cumulated withtheeffects ofinjury caused bysubsidized imports.
11. Anti-circumvention measures: (37)oftheActprovides that"theGovernment maytakeaction
toprevent circumvention oftheapplications ofcountervailing andanti-dumping duties asmaybe
prescribed".
Question: Weareconcerned withthisanti-circumvention provision asitisclearly inconsistent
withGATT Article VIandtheWTO A-DAgreement which donotcontain anyanti-
circumvention provisions.
12. Conduct ofinvestigation where nointernational obligations apply: 43(1) oftheActallows
theMalaysian Government touseanymethodology orprocedures withregard totheinvestigations.
Could weseekclarification onwhatarethecircumstances envisaged foruseofsuchflexible procedures.
13. Undertakings andsuspension ofinvestigations: 18(1)(b) oftheRegulations provides that"the
government oftheexporting country ortheexporters agree totakesuchother action soastoeliminate
theinjurious effects ofthedumping".
Question: Wewould likeclarification onwhatisenvisaged under "other actions". Article 8of
theWTO A-DAgreement provides foronlyprice undertakings. Hence other actions
likemarket share arrangements would beinconsistent withtheAgreement.