RESTRICTED
WORLD TRADE G/ADP/W/262
G/SCM/W/272
ORGANIZATION 29January 1996
(96-0309)
Original: English Committee onAnti-Dumping Practices
Committee onSubsidies andCountervailing Measures
REPLIES TOQUESTIONS POSED BYAUSTRALIA1CONCERNING
THE NOTIFICATION OFCANADIAN LAWS AND REGULATIONS2
Thefollowing communication, dated 11January 1996, hasbeenreceived fromthePermanent
Mission ofCanada.
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1. Under paragraph 2(7.3)(d), asubsidy maybespecific ifit"isnotgenerally available".
How would non-general availability bedetermined?
Subsection 2(7.3) ofourSIMA setsoutthefourcriteria contained inArticle 2.1(c) oftheWTO
Agreement onSubsidies andCountervailing Measures (SCM Agreement), which canrender asubsidy
defacto specific notwithstanding theappearance ofdejurenon-specificity. Paragraph (d)ofthis
subsection authorizes theDeputy Minister ofNational Revenue toconsider, inconjunction withthe
other three defacto specificity criteria, whether themanner inwhich discretion isexercised bythe
granting authority indicates thatthesubsidy isnotgenerally available. Inassessing general availability
under paragraph 2(7.3)(d), theDeputy Minister would consider, (inaccordance withfootnote 3tothe
SCM Agreement), suchfactors asthefrequency withwhich applications forasubsidy arerefused or
approved, thereasons forsuchdecisions, theautomaticity ofestablished eligibility criteria, andwhether
these criteria arestrictly adhered tobythesubsidy programme administrators.
2. Inparagraph 16(2)(b), willtheextended period oftime ofArticle 2.2.1 oftheA-D
Agreement normally beoneyear?
Consistent withfootnote 4toArticle 2.2.1 oftheA-DAgreement, paragraph 16(2)(b) provides
thattheperiod oftimeforpurposes ofdetermining profitability shallbe"notlessthansixmonths" .
While itisanticipated thatthetimeperiod forthepurposes ofparagraph 16(2)(b) willnormally be
oneyear, theselection ofthetimeperiod willbedependent ontheparticular circumstances ofeach
case. Insome cases, theselection ofalonger orshorter period might bewarranted, having regard
tosuchfactors asnormal business cycles andtypical accounting periods.
1G/ADP/W/109-G/SCM/W/118.
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3. Indetermining whether there isasufficient quantity ofsalesinsection 19,willtheCanadian
authorities beapplying the5percentruleinfootnote 2toArticle 2.2oftheA-D
Agreement?
The5percentstandard infootnote 2is,ofcourse, intended asageneral guideline andnot
aninflexible standard. Inthisregard, theprovision clearly envisages thepossibility ofadifferent ratio,
where warranted. Thedetermination bytheDeputy Minister ofNational Revenue ofwhether there
areasufficient number ofhome market salesoflikegoods topermit afaircomparison ofnormal values
andexport prices willdepend upon thecircumstances ofeachcase. Inmaking thisdetermination,
theDeputy Minister willbeguided, among other things, byfootnote 2toArticle 2.2oftheA-D
Agreement.
4(a) Subsection 43(1.01) provides forseparate determinations forNAFTA countries. While
non-application oftheA-DandSCM Agreements tocountries inanFTAcanbejustified,
howdoesCanada justify different treatment?
Theseparateorder/findingrequiredbysubsection43(1.01)withrespecttothegoodsofaNAFTA
countryisnecessarytofacilitateappealstobinationalpanels-aremedyonlyavailabletoNAFTAparties.
Thisprovision hasnotbeeninterpreted asrequiring aseparate injury analysis.
(b) Does thismean thatimports from NAFTA countries willnotbecumulated withthose of
other countries forthepurposes ofA-DandCVD investigations?
Ithasbeenthepractice oftheCanadian International Trade Tribunal (CITT) inA-DandCVD
cases toconsider thecumulate effect ofdumping andsubsidizing from allcountries.
(c) Ifthatisthecase,inassessing causal linkinrespect ofnon-NAFTA countries, doesCanada
ensure thatallimports from NAFTA countries aregiven fullconsideration as"other factors
causing injury" ?
Please refertothereply totheprevious question.
(d) Ifanotice withrespect toaNAFTA country were toberevoked forwhatever reason,
what effect would thathave onextant notices inrespect ofother countries?
TheCITT would publish anamendment tothenotice andcontinue theproceedings withrespect
totheother countries.
5. Subparagraph 49(2)(a)(ii) would appear toallow forprice undertakings from the
government oftheexporting country inrespect ofdumped goods. How would thisbe
consistent withtheAnti-Dumping andSafeguards Agreements?
Subparagraph 49(2)(a)(ii) must bereadinconjunction withthedefinition of"undertaking"
insubsection 2(1)oftheSIMA. Inthisregard, itisclear from paragraph (a)ofthatdefinition that
"undertaking" ,inthecaseofdumped goods, means anundertaking from anexporter.G/ADP/W/262
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6. Could Canada explain howthereviews provided forinsubsection 76(5) willbesufficient
tomeet therequirements ofArticles 11.3and21.3oftheA-DandSCM Agreements
respectively?
Re.Orders/Findings: Inaccordance withArticles 11.3 and21.3 oftheA-DandSCM
Agreements, subsection 76(5) oftheSIMA provides forthedeemed rescission oforders/findings upon
theexpiration offiveyears fromthedateoftheoriginal order/finding orthelastreview order continuing
theorder/finding, unless theCITT hasinitiated areview oftheparticular order/finding pursuant to
subsection 76(2) oftheAct.
Indetermining whether anorder/finding should becontinued, theCITT must, inaccordance
withArticle 11.3oftheA-DAgreement and21.3oftheSCM Agreement, besatisfied:
(i) thatthere isalikelihood ofacontinuation/recurrence ofdumping and/or subsidizing
from thesubject countries iftheorder/finding isrescinded; and
(ii) thecontinuation/recurrence ofdumping and/or subsidizing islikely tocause injury
tothedomestic industry.
With respect totheissue ofthelikelihood ofacontinuation/recurrence ofdumping and/or
subsidizing, theCITT would consider suchfactors as,demonstrated propensity todump, product pricing
trends relative tootherrelevant economic indicators, andrelevant datafromtheDepartment ofNational
Revenue, including theresults ofthemost recent administrative review.
Inexamining theissueofwhether thecontinuation/recurrence ofdumping and/or subsidizing
islikely tocause injury tothedomestic industry, theCITT would consider thevolume, price effect,
andindustry impact factors setoutintheWTO A-DandSCM Agreements.
TheTribunal haspublished Guidelines outlining procedures inrespect ofsuchreviews.
Re.Undertakings: Inaccordance withArticles 11.5and21.5oftheA-DandSCM Agreements
respectively, subsection 53(2) oftheSIMA provides forthedeemed rescission ofanundertaking upon
theexpiration offiveyears fromthedateofacceptance oftheundertaking unless theDMhasreviewed
theundertaking before theexpiration ofthefive-year period andrenewed itforafurther period of
notmore thanfiveyears based onadetermination thattheundertaking continues tofulfil itspurpose.
Given thepurpose ofundertakings, (assetoutinsection 49ofSIMA), where thereisunlikely
tobeacontinuation orrecurrence ofdumping/subsidizing andresulting injury iftheundertaking is
allowed toexpire, theundertaking would nolonger continue tofulfil itspurpose andthere would,
therefore, benobasis forextending itforafurther period.
7. Regulation 25.3(1) applies thecriteria ofArticle 8.2(b) oftheSCM Agreement nottothe
territory ofaMember butrather totheterritory ofthegranting authority [seeforexample
25.3(1)(c) and25.3(3)(a)]. How isthisconsistent withtheSCM Agreement?
Thereference to"territory ofthegranting authority" insection 25.3(1) oftheSpecial Import
Measures Regulations inrespect ofnon-actionable subsidies isconsistent withtheSCM Agreement 's
recognition ofthenon-actionability ofsubsidies granted bywhatever levelofgovernment within the
territory ofaMember, provided, ofcourse, thattheother criteria inArticle 8.2(b) aresatisfied.