RESTRICTED
WORLD TRADE G/ADP/W/115
G/SCM/W/124
ORGANIZATION 13October 1995
(95-3081)
Original: English Committee onAnti-Dumping Practices
Committee onSubsidies andCountervailing Measures
QUESTIONS CONCERNING THE NOTIFICATIONS PROVIDED
BYTHE GOVERNMENT OFNEW ZEALAND1OFLAWS AND
REGULATIONS UNDER ARTICLES 18.5AND 32.6OFTHE AGREEMENTS
Thefollowing communication, dated 6October 1995, hasbeenreceived from theHong
Kong Economic andTrade Office.
_______________
1. Keyissues intheWTO A-DAgreement found silent intheNewZealand A-Dlegislation
TheWTO A-DAgreement contains many improvements overtheTokyo Round A-DCode.
Weexpect WTO members would unequivocally reflect theseimprovements intheirnational legislation.
Anexamination oftheNewZealand legislation notified suggests thatthere arenospecific statutory
provisions implementing anumber ofthese improvements ortheprovisions maynotbeadequate.
Notable examples areasfollows:
- establishment ofcosts (Articles 2.2.1.1 and2.2.2)
- currency conversion (Article 2.4.1)
- comparison methodology (Article 2.4.2)
- cumulative assessment ofinjury (Article 3.3)
- threat ofmaterial injury (Article 3.7)
- questionnaires (Article 6.1.1)
- on-site verifications (Article 6.7andAnnex I)
- sampling method (Article 6.10)
- rights ofindustrial users andrepresentative consumer organization (Article 6.12)
- newcomer review (Article 9.5)
Details ofsome oftheomissions would beelaborated below asillustration.
Question: Ifthere arenospecific statutory provisions, howwould New Zealand ensure its
authorities would follow strictly therelevant provisions oftheWTO A-DAgreement
onthese issues? Howwould NewZealand reconcile itsobligations under theWTO
A-DAgreement onthese issues withthelackofspecific statutory provisions?
1G/ADP/N/1/NZL/2-G/SCM/N/1/NZL/2G/ADP/W/115
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2. Section 4(b)(iii) -Export price
Inthecaseofconstructed export price, Article 2.4oftheWTO A-DAgreement provides that
allowances for"profits accruing", among other things, shallbemade.
Section 4(b)(iii) (p.4) states thatincasethepurchase bytheimporter isnotanarms length
transaction andtheexport price istobeconstructed, theprofit component tobededucted could be
theamount oftheprofit onthesalebytheimporter or,where theSecretary sodirects, anamount at
aratedetermined bytheSecretary.
Questions :Inwhatcircumstances would theSecretary determine arateofprofit fordeduction?
How willtheSecretary determine theprofit rate?
3. Section 4(2)-Export price
Where there isnoexport price orwhere theexport price isunreliable, andiftheproducts are
notresold toanindependent buyer ornotresold intheconditions asimported, Article 2.3oftheWTO
A-DAgreement allows construction ofexport price onsuchreasonable basis astheauthorities may
determine.
Section 4(2)provides thatwhere there isnoexporter 'ssaleprice, theexport price shallbe
determined insuchmanner astheSecretary considers appropriate.
Question: Would NewZealand elaborate thecircumstances where thereisnoexporter 'ssaleprice,
inrelation toArticle 2.3oftheWTO A-DAgreement?
4. Section 4(1)(c) -Export price
Article 2.3oftheWTO A-DAgreement allows determination oftheexport price onsuch
reasonable basis astheauthorities maydetermine onlywhere products arenotresold inthecondition
asimported orwhere thegoods arenotresold toanindependent buyer.
Under section 4(c), theexport price isareasonable price determined bytheNew Zealand
authorities, ifgoods aresubsequently soldbytheimporter inacondition inwhich theywereimported.
Thistriggering condition isverysimilar tothatinsection 4(b), ieifgoods aresubsequently soldby
theimporter inthecondition inwhich theywereimported toaparty whoisnotrelated totheimporter.
Butunder section 4(b),theexport priceisconstructed onthebasisofthesaletoanindependent buyer.
Question : What isthedifference inthetriggering conditions insubsections (b)and(c)?Would
New Zealand explain howwould section 4(c)comply with therequirement of
Article 2.3? What istheexport price when thegoods arenotresold inthecondition
asimported?
5. Section 5-Normal value
Articles 2.1and2.2oftheWTO A-DAgreement stipulates howthenormal value could be
established. Itshould be:
(i) price indomestic sales; orif(i)isnotobtainable,
(ii) price insalestoanappropriate thirdcountry or
(iii) costs ofproduction inthecountry oforigin plusSGA andprofits.G/ADP/W/115
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Section 5(1)(p.4)provides thatthenormal value maybetheselling price oflikegoods inthe
exporting country bysellers other thantheexporter iflikegoods arenotsoldbytheexporter.
Question: What isthelegalbasis under theWTO A-DAgreement forthisprovision? Would
itbefairtoresort tosalebyother sellers instead ofsaletothird country or
manufacturing costs andprofits?
6. Sections 5(2)(d), 5(6)-Normal value
Articles2.2.1.1and2.2.2oftheWTOA-DAgreementprovidesfortherequirementstodetermine
thecosts andprofits usedinestablishing thenormal value. Forexample, thecosts shallbebased on
records keptbytheexporter, andtheamounts forSGA andprofits bebased onactual data.
Itappears thatthere arenoequivalent statutory provisions implementing these requirements
when reference ismade tocosts andprofits insections 5(2)(d) and5(6).
Question: WouldtheNewZealandauthoritiesfollowtheserequirementsstipulatedinArticles2.2.2
and2.2.2.1? Ifthere arenostatutory provisions providing forsuchrequirements,
howwould New Zealand ensure itsobligations under these Articles would be
implemented infull?
7. Section 5(2)-Normal value
Article 2.2oftheWTO A-DAgreement provides thatcomparison canbemade withprices
ofthirdcountry salesorcostsofproduction plusSGAandprofits when therearenosalesoflikeproducts
intheordinary course oftrade inthedomestic market orwhen suchsales donotpermit aproper
comparison because oftheparticular situation orthelowvolume ofsuchsales. Footnote 2elaborates
what isnotlowvolume ofsales. Article 2.2.1, withtherelevant Footnotes 4and5,setsoutthe
conditions inwhich salesbelow costs willbedisregarded indetermining thenormal value, iewhen
salesaremade within anextended period oftimeinsubstantial quantities andareatprices which do
notprovide fortherecovery ofallcosts within areasonable period oftime. Prices below perunit
costs atthetimeofsalebutabove weighted average perunitcosts fortheinvestigation period shall
beconsidered toprovide fortherecovery ofallcosts within areasonable period oftime.
Section 5(1)(p.4)states thatthenormal value shallbetheprice paidforlikegoods soldinthe
ordinary course oftrade forhome consumption inthecountry ofexport insalesthatarearm'slength
transactions bytheexporter. Section 5(2)(a), (b)and(c)(p.4&5)setoutthecircumstances inwhich
theNewZealand authorities maydetermine thenormal value otherthanbysalesforhome consumption -
(a) when there isanabsence ofrelevant sales;
(b) when thesituation intherelevant market issuchthatsales thatwould otherwise be
relevant arenotsuitable foruseindetermining theprice fornormal value; and
(c) when likegoods arenotsoldintheordinary course oftrade bytheexporter andit
isnotpracticable toobtain within areasonable timeinformation byother sellers.
Section 5(6)provides forthecircumstances inwhich thepriceshallbedeemed nottohavebeen
paidintheordinary course oftrade. An"extended period oftime" and"asubstantial quantity oflike
good" werenotdefined inthestatute. Theconditions forfullrecovery ofallcostswithin areasonable
period oftimeisalsonotelaborated.G/ADP/W/115
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Questions: (a)IftheNewZealand authorities aretodetermine thenormal value other thanby
salesforhome consumption onaccount oflowvolume ofsalesinthedomestic
market, whatarethecriteria toestablish thelowvolume ofsales? What statutory
provisions havebeenputinplace toensure theNewZealand authorities would
follow thecriteria assetoutinFootnote 2oftheWTO A-DAgreement?
(b)Isthere anystatutory provision defining "anextended period oftime" and"a
substantial quantity oflikegoods" inaccordance withFootnotes 4and5ofthe
WTO A-DAgreement?
(c)AretheNewZealand authorities required, bystatute orotherwise, totreatprices
which arebelow perunitcosts atthetimeofsalebutabove weighted average
perunitcosts fortheperiod ofinvestigation asproviding forrecovery ofcosts
within areasonable period oftime, asstipulated inArticle 2.2.1 oftheWTO
A-DAgreement? Willsalesbetreated intheordinary course oftrade aslong
assaleprices areabove weighted average perunitcosts fortheperiod of
investigation?
(d)How would New Zealand ensure thatitsobligation under theWTO A-D
Agreement would befaithfully implemented?
8. Section 5(3)&(4)-Faircomparison
Article 2.4oftheWTO A-DAgreement requires afaircomparison between normal value and
export price. Apart fromthegeneral requirement ofdueallowance, itspecifically requires establishment
ofnormal value attheappropriate leveloftradeormaking dueallowance incaseofconstructed export
price. Inthiscase, theauthorities arerequired toindicate totheparties concerned whatinformation
isnecessary toensure faircomparison.
Section 5(3)(p.5)provides forthegeneral methodology offaircomparison between export price
andnormal value. Section 5(4)(p.5)specifically obliges theNewZealand authorities tomake necessary
adjustmentstonormalvalueestablishedotherthanonthebasisofdomesticsalesintheexportingcountry.
There ishowever nosimilar provision expressly obliging theNewZealand authorities toestablish the
normal value attheappropriate trade levelormake dueallowance incaseofconstructed export price.
There isalsonorequirement toindicate toparties what information isnecessary toensure afair
comparison.
Question: What arethelegislative intentions toemphasize instatute theobligations forfair
comparison where normal value isestablished other thanonthebasisofdomestic sales
butnotwhere export price isconstructed? How would NewZealand implement its
obligations under Article 2.4torequire itsauthorities toindicate toparties thenecessary
information required forfaircomparison?
9. Section 5-Faircomparison
Itseems thattheNew Zealand legislation hasnoprovisions setting outprocedures forfair
comparison regarding currency conversion andcomparison methodologies asintroduced inArticle 2.4.1
and2.4.2 oftheWTO A-DAgreement.G/ADP/W/115
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Question: Howwould NewZealand implement theprocedures andrequirements prescribed in
Article 2.4.1 and2.4.2 oftheWTO A-DAgreement, ifthereisnoequivalent statutory
provisions?
10. Section 5(5)-Faircomparison
Article 2.5oftheWTO A-DAgreement provides thatcomparison shallnormally bemade with
prices intheexporting country andsetsoutafewexamples where comparison shallbemade withprices
inthecountry oforigin:
(i) theproducts aremerely trans-shipped through thecountry ofexport, or
(ii) suchproducts arenotproduced inthecountry ofexport, or
(iii) there isnocomparable price forsuchproducts inthecountry ofexport.
Section 5(5)(p.5)provides thattheNewZealand authorities mayonitsownopinion ascertain
thenormal value asifthecountry oforigin were thecountry ofexport.
Question: What considerations would theNewZealand authorities takeintoaccount informing
suchanopinion? Does thestatute provide foranyguidelines totheNewZealand
authorities? Howwould NewZealand ensure itsobligations under Article 2.5ofthe
WTO A-DAgreement would notbesubject totoowideadiscretion?
11. Section 6(1)-Export price andnormal value
Article 6.8oftheAgreement provides thatintheapplication of"Best information available"
provisions, procedures inAnnex IIoftheAgreement shallbeobserved.
Section 6(1)(p.6)allows theSecretary, having regard toallavailable information, todetermine
thenormal value andtheexport price onhisown. Whether theSecretary willobserve theprovisions
setoutinAnnex IIoftheWTO A-DAgreement isnotclear.
Question: HowwilltheNewZealand authorities observe theobligations asrequired inAnnex II
oftheWTO A-DAgreement intheabsence ofastatutory provision intheA-D
legislation?Arethereanyspecificguidelinesfortheuseof"bestinformationavailable"?
12. Section 8(2)(e) -Other factors causing injury
Article 3.5oftheWTO A-DAgreement stipulates thattheinjuries caused byfactors other than
thedumped imports must notbeattributed tothedumped imports.
Section 8(2)(p.7) provides thattheSecretary shallhaveregard tothematters listed in(a)to
(f)indetermining whether injury exists. Item(e)ofthissubsection recognizes thefactors other than
thedumped imports, butdoesnotclearly prohibit theinjury caused bysuchfactors from attributing
tothatofthedumped imports.
Question: Howwould theNewZealand authorities haveregard tothematters insection 8(2)(e)?
Willtheinjuries caused byfactors other thanthedumped imports suchasthose stated
insection 8(2)(e) beattributed tothedumped imports?G/ADP/W/115
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13. Section 8-Threat ofmaterial injury
Article 3.7oftheWTO A-DAgreement setsoutspecific requirements forthedetermination
ofathreat ofmaterial injury andlistsoutanumber offactors which theauthorities should consider.
Section 8(p.6&7)doesnotcontain dedicated provisions forsuchadetermination.
Question: IftheNewZealand legislation doesnotcontain anyspecific, dedicated provisions for
adetermination ofathreat ofamaterial injury, howwould NewZealand implement
itsobligations under Article 3.7oftheWTO A-DAgreement?
14. Section 8-Cumulative assessment ofinjury
Article 3.3oftheWTO A-DAgreement allows cumulative assessment ofinjurious effect made
bydumpedimportsfromdifferentcountriessimultaneouslysubjecttoA-Dinvestigationsonlyinrestricted
circumstances.
Section 8doesnotsetouthowwould theNewZealand authorities consider injurious effect
ofsuchdumped imports.
Question: Would theNewZealand authorities allow cumulative assessment ofinjurious effect
onlyincircumstances setoutinArticle 3.3oftheWTO A-DAgreement? Howwould
NewZealand implement itsobligations under thisArticle ifthereisnoexplicit statutory
provisions tothiseffect?
15. Section 9-Form ofnotice
Section 9provides thatanotice shallcontain abriefsummary ofthereasons forthegiving of
thenotice butdoesnotstateclearly whatinformation willbeprovided/included inthenotice.
Article 12.1.1 oftheWTO A-DAgreement liststheinformation thatshould beincluded ina
notice ofinitiation ofaninvestigation. Articles 12.2.1 and12.2.2 setsouttheinformation required
tobeincluded inapublic notice oftheimposition ofprovisional measure andfinalmeasure respectively.
Question: Would thevarious public notices issued under sections 10(4), 13(2) and16(1) contain
those information required tobeincluded byrelevant provisions oftheWTO A-D
Agreement? Howwould NewZealand ensure itsobligations under thepublic notice
requirements would befulfilled?
16. Section 10-Interested parties
Article6.11oftheWTOA-DAgreementdefinestheterm"interestedparties"andgivesexamples.
Article 6.12provides thattheA-Dauthorities shallprovide opportunities forindustrial users andfor
representative consumer organizations toprovide information which isrelevant totheinvestigation
regarding dumping, injury andcausality.
Itseems thatthere isnodefinition of"interested parties" insection 10(p.9)orotherwise and
nospecific provisions setting outtherights ofindustrial usersandrepresentative consumer organizations
during anA-Dinvestigation.
Questions: (a)Which parties willbeincluded in"allinterested parties" inSection 10(6)?G/ADP/W/115
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(b)Willindustrial users andrepresentative consumer organizations beallowed to
provide information regarding dumping, injury andcausality? Howwould New
ZealandimplementitsobligationsunderArticle6.12oftheWTOA-DAgreement?
17. Section 11(c) -Conditions forfinaldetermination
Section 11(1)(a) to(f)(p.10) setsoutthegrounds fortermination ofinvestigations. Under
subsection (c),thecasewould beterminated if,inthecaseofsubsidization, theimposition ofa
countervailing dutyinrespect ofthose goods would beinconsistent withNewZealand 'sobligations
asaparty totheWTO Agreement. There isnosimilar provision regarding A-Daction taken by
NewZealand.
Question: What istherationale behind tostipulate suchaprovision onlyinsubsidy cases? Does
itmean thattheA-Dcasewould notbeterminated eveniftheimposition ofanA-D
dutywould beinconsistent withtheNewZealand 'sobligations asaparty totheWTO
Agreement?
18. Section 11(2)(c) -Negligible imports
Article 5.8oftheWTO A-DAgreement setsoutthequantitative criteria below which anA-D
caseshould beterminated: deminimis dumping margin of2percentandnegligible imports of3per
centofimport share.
Section 11(2) provides thatevidence ofdumping shallbedeemed tobeinsufficient where the
margin ofdumping islessthan2percent(subsection (a))orwhere thevolume ofdumped imports
isnegligible, having regard toNew Zealand 'sobligation asaparty totheWTO Agreement
(subsection (c)).
Question: Would NewZealand abide bythequantitative criterion ofnegligible imports stipulated
inArticle 5.8oftheWTO A-DAgreement? Why doesNewZealand notdirectly
transpose suchquantitative criterion intoitsdomestic legislation, asforthecriterion
fordeminimis dumping margin?
19. Section 14(3) -A-Dandcountervailing duty
Section 14(3) (p.11) provides thatnocountervailing dutymaybeimposed iftodosowould
beinconsistent withNewZealand 'sobligations asapartytotheWTO Agreement. Nosimilar provision
isstipulated foranA-Dcase.
Question: What istherationale behind tostipulate suchaprovision onlyinsubsidy cases? Why
isthere notasimilar provision thatprohibits imposition ofA-Ddutywhich could be
inconsistent with New Zealand 'sGATT/WTO obligations? Does New Zealand
contemplates instances where imposition ofA-Ddutycould beGATT-inconsistent?
20. Section 14(10) -Refunds
Article 9.3oftheWTO A-DAgreement provides fortherefund procedures andtimelimits,
among other things.
Section 14(10) (p.11) onlystates howtherefunds would becalculated. Norelevant procedures
andtime-limits areprovided.G/ADP/W/115
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Question: What would betherelevant procedures andtimelimits forrefunds? How would
NewZealand implement itsobligations under Article 9.3oftheWTO A-DAgreement?
21. Section 14(9)(b) -Reviews
Article 11.3oftheWTO A-DAgreement requires termination ofA-Dduties fiveyears after
areview, ifsuchareview cover bothdumping andinjury, ortheoriginal imposition, whichever earlier.
Section 14(9)(b) provides similarly butwithout thecondition thatthereview mustcover both
dumping andinjury.
Question: Whydoessection 14(9)(b) notprovide forthecondition thatthereview must cover
bothdumping andinjury? Howwould NewZealand reconcile thiswithitsobligations
under Article 11.3oftheWTO A-DAgreement?
22. Section 15-Price undertakings
Article 8.1oftheWTO A-DAgreement contemplates onlyundertakings arrangement made
between theimporting authorities andanyexporter.
Section 15(1) (p.12) states thateither theGovernment ofthecountry ofexport ortheexporter
ofthegoods could enter intoanundertaking arrangement withNewZealand.
Questions: (a)How would theGovernment oftheexporting country, which isnotdirectly
performing anexport function, beinvolved inanundertaking arrangement?
(b)IfthatistheGovernment oftheexporting country which really enters intoan
undertaking arrangement withNewZealand, doesthatmean future exports from
allexporters (including newcomers) intheexporting country concerned should
bebound bytheundertakings?
(c)Further to(b)above, cannewcomers request anexpedited review todetermine
itsliabilities eveniftheirGovernment hasalready concluded anundertaking with
theNewZealand?
23. Section 15(4) -Completion ofthecaseaftertheacceptance ofundertakings
Article 8.4oftheWTO A-DAgreement requires theimporting authorities tocomplete the
investigation ofbothdumping andinjury iftheexporter sodesires eveniftheundertakings areaccepted.
Section 15(4) (p.12) seems toprovide thattheNewZealand authorities willonlycomplete the
investigation concerning theextent ofinjury toanindustry, butnotdumping.
Question: WilltheNewZealand authorities alsocomplete theinvestigation ofdumping insuch
acase? How dotheyfulfill theobligations under Article 8.4oftheWTO A-D
Agreement?
24. Section 16(5) -Provisional dutyinexcess offinalduty
Article 10.3oftheWTO A-DAgreement provides thatifthedefinitive dutyislower thanthe
provisional duty, thedifference shallbereimbursed.G/ADP/W/115
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Section 16(5) (p.13) onlyprovides thattheamount oftheexcess shallberemitted bytheCollector
ifsorequired bytheMinister.
Question: Inwhatcircumstances would theMinister notrequire theCollector toremit theamount
ofexcess? Howwould NewZealand reconcile itsobligations under Article 10.3of
theWTO A-DAgreement iftheCollector doesnotremit theexcess?
25. Section 17(3)(a)(ii) -Retrospective measures
Article 10.6(ii) oftheWTO A-DAgreement provides thatiftheinjury iscaused bymassive
dumped imports ofaproduct inarelatively shorttime,definitive A-Ddutymayberetroactively imposed
provided thattheimporters concerned havebeengiven anopportunity tocomment.
Section17(3)(a)(ii)(p.13)providesforretrospectiveimpositionofA-Ddutiesinthecircumstances
inArticle 10.6(ii) butdoesnotinclude anopportunity forimporters concerned tomake comment.
Question: Willtheimporters concerned begiven anopportunity tocomment inthiscase? What
aretherelevant procedures andstatutory provisions?