RESTRICTED
WORLD TRADE G/ADP/W/22
G/SCM/W/29
13July1995
ORGANIZATION(95-1995)
Original: English Committee onAnti-Dumping Practices
Committee onSubsidies andCountervailing Measures
QUESTIONS CONCERNING THE NOTIFICATIONS PROVIDED BY
THE GOVERNMENT OFVENEZUELA OFLAWS AND
REGULATIONS UNDER ARTICLES 18.5AND
32.6OFTHE AGREEMENTS
Thefollowingcommunication,dated5July1995,hasbeenreceivedfromthePermanentMission
ofKorea.
_______________
With regard tothefirstreview ofanti-dumping andcountervailing legislation scheduled for
theweek of17July1995, andinresponse toWTO/AIR/78, Iamsending yousome written questions
addressed toVenezuela.G/ADP/W/22
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QUESTIONNAIRE ONTHE ANTI-DUMPING LAWS OFVENEZUELA
Here, LawonUnfair Foreign Trade Practices means theVenezuela 'slegislation notified in
G/ADP/N/1/VEN/1.
"TheWTOAgreement"meanstheWTOAgreementimplementationofArticleVIoftheGeneral
Agreement onTariffs andTrade 1994.
Question 1:Normal value
TheWTO Agreement, Article 2.2,stipulates:
"When there arenosalesofthelikeproduct intheordinary course oftrade inthedomestic
market oftheexporting country orwhen ...suchsalesdonotpermit aproper comparison, themargin
ofdumpingshallbedeterminedbycomparisonwithacomparablepriceofthelikeproductwhenexported
toanappropriate thirdcountry, provided thatthispriceisrepresentative, orwiththecostofproduction
inthecountry oforigin plusareasonable amount foradministrative, selling andgeneral costsandfor
profits."
Relevant Article 11oftheRegulations under theLawonUnfair Foreign Trade Practices
stipulates:
"Thecompared export value isthepriceofsalesbytheexporter oftheallegedly dumped good
tobuyers inacountry other thanVenezuela orthecountry ofexport oroforigin. Insuchcases, the
Commission maytakeintoaccount thehighest price, provided thatitisrepresentative, andshallensure
thattheconditions laiddown inArticle 8oftheseRegulations arefulfilled withreference tothecountry
ofexport selected."
Asshown above, when there arenosalesofthelikeproduct intheordinary course oftrade
andsothemargin ofdumping isdetermined bycomparison withaprice ofthelikeproducts exported
toathirdcountry, theWTO Agreement requires theuseofacomparable price, whereas Article 11
oftheRegulations states thattheCommission mayusethehighest price.
Using thehighest price indetermining dumping margin does notconform totheWTO
Agreement.
Question 2:Domestic industry
TheWTO Agreement, Article 5.4,stipulates:
"Theapplicationshallbeconsideredtohavebeenmade‘byoronbehalfofthedomesticindustry'
ifitissupported bythose domestic producers whose collective output constitutes more than50percent
ofthedomestic industry expressing either support fororopposition totheapplication.
However, noinvestigation shallbeinitiated when domestic producers expressly supporting
theapplication account forlessthan25percentoftotalproduction ofthelikeproduct produced by
thedomestic industry."G/ADP/W/22
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Therelevant Article 47oftheRegulations under theLawonUnfair Foreign Trade Practices
stipulates:
"...themajor proportion ofdomestic industry shallmean those producers representing atleast
30percentofdomestic industry. Exceptionally, theCommission mayuseasabenchmark ahigher
percentage, which maynotunder anycircumstances exceed 40percent,oralower percentage, which
maynotbelessthan20percent."
Asshown above, theWTO Agreement establishes twocriteria fordetermining "domestic
production": those domestic producers whosupport theapplication should haveatleast25percent
ofthedomestic production andmore than50percentoftheproduction oftherespondents.
However, therelevant Article 47oftheRegulations establishes onlyonecriterion: thatthose
domestic producers whosupport theapplication account foratleast30percentofdomestic industry.
Venezuela should accept theother criterion: thesupporters oftheapplication should represent
more than50percentoftheproduction oftherespondents.
What istheopinion ofVenezuela onthis?
Also, what isthemeaning of"30percentofdomestic industry"? Isitbased onquantity
produced oramount ofmoney earned bysales?
Question 3:Determination ofinjury
TheWTO Agreement, Article 3.2,stipulates:
"With regard tothevolume ofthedumped imports, theinvestigating authorities shallconsider
whether there hasbeenasignificant increase indumped imports, ...asignificant price undercutting
bythedumped imports, ...otherwise todepress prices toasignificant degree ...Nooneorseveral
ofthese factors cannecessarily givedecisive guidance."
Therelevant Article 50ofRegulations under theLawonUnfair Foreign Trade Practices
stipulates:
"Itshallbedetermined thatthere ismaterial injury tothedomestic industry producing like
goods when atleasttwoofthefollowing conditions aremet:
1. Thevolume ofdumped orsubsidized imports issignificant ...;
2. Imports ofdumped orsubsidized goods aresoldatprices considerably lower thanthose
forlikegoods produced inthecountry ...;
3. Importsofdumpedorsubsidizedgoodshaveanadverseimportonproducersofdomestic
likegoods ..."
Asshown above, Article 50oftheRegulations states thatinjury todomestic industry is
determined bytheabove conditions, which doesnotconform totherelevant WTO Agreement which
states thatsuchfactors, cannot necessarily givedecisive guidance.G/ADP/W/22
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What istheopinion ofVenezuela onthis?
Question 4:Cumulative assessment ofinjury
TheWTO Agreement, Article 3.3,stipulates:
"Where imports ofaproduct from more thanonecountry aresimultaneously subject to
anti-dumping investigations, theinvestigating authorities maycumulatively assess theeffects ofsuch
imports onlyiftheydetermine that(a)themargin ofdumping established inrelation totheimports
from eachcountry ismore thandeminimis asdefined inparagraph 8ofArticle 5andthevolume of
imports fromeachcountry isnotnegligible and(b)acumulative assessment oftheeffects oftheimports
isappropriate inlightoftheconditions ofcompetition between theimported products andtheconditions
ofcompetition between theimported products andthelikedomestic product."
TherelevantArticle12(SINGLEPARAGRAPH)oftheLawonUnfairForeignTradePractices
stipulates:
"Ininvestigating theinjury, imports coming fromororiginating intwoormore countries may
becumulated toassess whether thecountries inquestion havebeenthesubject ofananti-dumping or
subsidy investigation during theyearpriortothedateoftheinitiation ofthecorresponding anti-dumping
orsubsidy procedure."
Asshown above, theWTO Agreement specifies three conditions should bemettoassess
cumulatively theimports frommore thanonecountry. TheWTO Agreement requires thattheimports
besimultaneously subject toanti-dumping investigation, whereas theLawstipulates thattheimports
besubject toinvestigation during theyearprior tothedateoftheinitiation, tocumulatively assess
theeffects ofsuchimports. Inaddition, theLawdoesnotrequire thatthetwoother conditions provided
bytheWTO Agreement beconsidered:
(a) deminimis margin andnegligible import volume ;
(b) theconditions ofcompetition.
TheLawshould accept therelevant provisions oftheWTO Agreement.