RESTRICTED
WORLD TRADE G/ADP/W/268
G/SCM/W/278
ORGANIZATION 29January 1996
(96-0313)
Original: English Committee onAnti-Dumping Practices
Committee onSubsidies andCountervailing Measures
REPLIES TOQUESTIONS POSED BYKOREA1CONCERNING
THE NOTIFICATION OFCANADIAN LAWS AND REGULATIONS2
Thefollowing communication, dated 11January 1996, hasbeenreceived fromthePermanent
Mission ofCanada.
_______________
1.(a) Incases where there arenorelevant provisions inthedomestic legislation, doestheWTO
Agreement apply?
Domestic legislation ispresumed tobeinconformity withtheinternational agreements being
implemented. Therefore, where domestic legislation issilent onanissue andambiguity results,
international agreements, suchastheWTO Agreement ,canbeusedasguides tointerpretation.
(b) Iftheprovisions ofexisting domestic legislation donotconform totheWTO Agreement,
dotheprovisions oftheWTO Agreement apply?
International agreements suchastheWTO Agreement donothavedirect effect under Canadian
law. Therefore, intheevent ofaconflict between domestic legislation andtheWTO Agreement, the
domestic legislation would prevail.
2. Issection 17(b) ofSIMA applied onlyincases where themargin ofdumping iscalculated
onatransaction-to-transaction basis?
Section 17oftheSIMA allows theprice oflikegoods forthepurpose ofnormal value
calculations tobebased onaweighted average price under paragraph 17(a) orarepresentative price
under paragraph 17(b). These options areintended toallow fortheestablishment ofnormal values
onaweighted average basisoronanindividual transaction basisforthepurposes ofthecomparisons
authorized under Article 2.4.2 oftheA-DAgreement.
1G/ADP/W/131-G/SCM/W/140.
2G/ADP/N/1/CAN/2-G/SCM/N/1/CAN/2.G/ADP/W/268
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3. Please clarify thedefinition of"reasonable" inrelation toadministrative, selling andall
other costs andprofits, under paragraph 19(b) oftheSIMA.
Paragraph 19(b) oftheSIMA must bereadinconjunction withparagraphs 11(b) and(c)of
theSpecialImportMeasuresRegulations,whichdefinetheconceptsof"areasonableamountforprofits"
and"areasonable amount foradministrative, selling andallother costs", respectively.
Inaccordance withArticle 2.2.2 oftheA-DAgreement, these regulations require thatthese
amounts bedetermined withreference toactual data.
4.(a) Re.section 30.2oftheSIMA, please provide anexplanation ofhowthemargin iscalculated
inacasewhere themargin iscalculated bycomparison ofindividual prices.
Wearenotentirely clearabout themeaning ofthisquestion. Ifyouarereferring tohowwe
dealwithtargeted dumping involving significant variations intheprices ofgoods from aparticular
exporter, among purchasers, regions ofCanada, ortimeperiods, subsection 30.2(2) oftheSIMA allows
theDeputy Minister tobasethemargin ofdumping onselected individual sales. Pursuant tosubsection
30.2(3) oftheAct,theexport prices ofthese individual sales arecompared tonormal values based
ontheweighted average oftheprices atwhich likegoods weresoldbytheexporter initshome market.
Thisisconsistent withArticle 2.4.2 oftheWTO A-DAgreement.
Wewould notnormally resort toatransaction-to-transaction approach except perhaps inthe
caseoflarge capital item, inwhich case, theDeputy Minister could undertake astraight comparison
ofindividual normal value andexport price.
(b) Please provide thereason fordisregarding negative margins, eventhough itisnotrequired
intheWTO/A-D Agreement.
Subsection 30.2(1) oftheSIMA provides forthedetermination ofthemargin ofdumping of
anygoods attheexporter level.
Foreachspecific category ofgoods under consideration inrespect ofanexporter, themargin
ofdumping iscalculated bysubtracting thetotalexport pricefromthetotalnormal value. Thiswould
result inanegative amount ifthetotalexport price exceeded thecomparable normal value.
Inthecalculation,negativemarginswould,thereforeoffsetpositivemarginsinordertodetermine
whether specific goods were being dumped during theperiod.
However, when theoverall margin ofdumping isbeing established fortheexporter, theproduct
groupings thathavenegative margins willbesetequal tozerotoensure thatnegative margins onspecific
product categories arenotusedtooffset positive margins on"non-like" goods.
Thismethodology isconsistent withArticle 2.4.2 oftheA-DAgreement since themargins
ofdumping arecalculated attheproduct category levelbyadirect comparison between normal value
andtheexport price forthecomparable goods.
5. Re.Section 30.3oftheSIMA onsampling, is"thelargest percentage ofgoods" determined
onaquantity basis, asprescribed bytheWTO/A-D Agreement?
Inaccordance withArticle 6.10oftheA-DAgreement, thelargest percentage ofgoods would
bedetermined onavolume basis.G/ADP/W/268
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6. Regarding theadditional requirement infootnote 11oftheA-DAgreement thatthere
must begrounds forbelieving/suspecting thattheproducer behaves differently from non-
related producers, itwould appear thatsubsection 31(4) oftheSIMA ischanging thenotion
of"relatedness" inArticle 4.1(i) oftheWTO Agreement.
Footnote 11totheA-DAgreement requires thattherebe"....grounds forbelieving orsuspecting
thattheeffect oftherelationship issuchastocause theproducer concerned tobehave differently from
non-related producers" .Given thattheprovision expressly pertains totherelatedness ofproducers
ontheonehand, andexporters andimporters ontheother, thedifferent behaviour referred toin
footnote11,whilenotexplicit,isclearlyvis-à-visexportersandimporters.ConsistentwithArticle4.1(i)
andfootnote 11oftheA-DAgreement, subsection 31(4) ofSIMA additionally requires thatthere be
grounds tobelieve thattheproducer behaves differently towards theexporter orimporter thandoes
anon-related producer.