RESTRICTED
WORLD TRADE G/ADP/W/199
G/SCM/W/211
ORGANIZATION 28November 1995
(95-3790)
Original: English Committee onAnti-Dumping Practices
Committee onSubsidies andCountervailing Measures
QUESTIONS CONCERNING THE NOTIFICATIONS PROVIDED
BYJAPAN1OFLAWS AND REGULATIONS UNDER
ARTICLES 18.5AND 32.6OFTHE AGREEMENTS
Thefollowing communication, dated 20November 1995, hasbeenreceived from theOffice
oftheUnited States Trade Representative.
_______________
Note PageCitations aretoDocument G/ADP/N/1/JPN/2.
ANTI-DUMPING
BASIC METHODOLOGY
CEPSales: Article 3oftheA-DCabinet Order (page 42)states thatwhere theexporter ofthe
products inquestion is"associated" withtheimporter, theselling price fortheproducts willbebased
uponthepriceatwhich theproducts arefirstresold inJapan toaparty notassociated withtheexporter
orimporter.
1. Article 3specifies thatinthecaseofassociated andimporters theprice tothefirstunrelated
parties willbethebasis fordetermining selling price. Could youplease explain whatismeant bythe
basis? What, ifany,adjustments willbemade tothisprice?
Intermediate Country Sales: Neither theCustoms LawnortheA-DCabinet Order contains aprovision
relating tointermediate country sales.
2. Inthecasewhere theexports toJapan areunder theconditions specified inArticle 2.5ofthe
A-DAgreement (through anintermediate country etc.)whatbasiswillbeusedfordetermining normal
value?
Adjustments: Article 2,Paragraph 3oftheA-DCabinet Order (Page 42)states thatnormal value
willbeadjusted for"differences intransaction stages, quantity oranyother conditions affecting price
comparability between thenormal value andtheselling price forexport oftheimported good in
question".
3. Cantransaction stages beinterpreted tomean levels oftrade?
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Exchange Rates
4. Forpurposes ofdumping, willexchange rateconversions bemade consistent withArticle 4-7
oftheJapanese Customs law(Page 7)?
Price Averaging
5. Onwhat basis willnormal value becompared toexport price orconstructed export price
(transaction totransaction oraverage toaverage)?
COST/COP
6. There doesnotappear tobeanyindication intheJapanese lawthatsalesmade below thecost
ofproduction willbedisregarded forpurposes ofdetermining normal value, willsuch sales be
disregarded? Ifso,under whatconditions?
CV/General: Article 2oftheA-DCabinet Order (Page 41)provides thatnormal value maybebased
oncostofproduction, plusSG&A, plusprofit, ifitcannot bebased onhome market salesbecause
there arenone intheordinary course oftrade orforother reasons. There arenoother provisions
governing COP/CV issues.
7. HowwillJapan calculate thecostofproduction? Under whatcircumstances might Japan not
utilize costrecords maintained byaproducer/exporter inthenormal course ofbusiness? WillJapan
make anyadjustments tothecostofproduction toaccount fornon-recurring and/or start-up costs?
8. How willJapan calculate SG&A andprofit? WillJapan relyonlyoninformation provided
bytheproducer/exporter astoitsactual SG&A andprofit?
COUNTERVAILING DUTIES
IDENTIFICATION, VALUATION
Conferral ofBenefit andAmount ofSubsidy
9. What method willbeusedfordetermining thesubsidy amount?
INVESTIGATION PROCEDURES
BASIC PROCEDURES
Initiation/Industry Support: Articles 7.5and8.4oftheCustoms Law(pages 10and15)provide that
"anyperson withaninterest indomestic industry ...asmaybeprescribed byaCabinet Order" may
bring apetition. Article 2.1oftheCVD Cabinet Order defines "domestic industry" as"domestic
producer whose collective output ofthelikeproducts constitutes amajor portion ofthetotaldomestic
production ofthelikeproducts" inaccordance withArticle 16.1oftheSCM Agreement.
10. Article 4oftheA-DCabinet Order (page 42)defines "industry inJapan" as"theproducers
inJapan whose collective output ofthelikeproducts constitutes more thanasubstantial portion ofthe
totaldomestic production ofthelikeproducts". Article 4.1oftheA-DAgreement provides fora"major
proportion". Wastheuseofadifferent termintended toimply analternative standard, particularly
inlightoftheuseof"major proportion" inArticle 4oftheCVD Cabinet Order? (Translation problem?)G/ADP/W/199
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Article 5.1oftheA-DCabinet Order (page 43)andArticle 3.1oftheCVD Cabinet Order
(page 48)provide thatpetitioners mustrepresent 25percent ofdomestic production inaccordance with
Article 5.4oftheA-DAgreement andArticle 11.4oftheSCM Agreement.
11. Whyisthere noprovision requiring 50percentsupport from domestic production ofthose
expressing anopinion when there isopposition toapetition asrequired byArticle 5.4oftheA-D
Agreement andArticle 11.4oftheSCM Agreement?
DeMinimis Margins andNegligible Imports
12. Isthereaprovisionforterminationoftheinvestigationwherepreliminarymarginsaredeminimis
orimport volumes arenegligible inaccordance withArticle 5.8oftheA-DAgreement orArticle 11.9
oftheSCM Agreement?
UNDERTAKINGS
Article 8.7oftheCustoms Lawstates thatwhen ananti-dumping investigation isinitiated,
exportersmayofferthegovernmentpriceundertakingssoastoeliminatetheinjuriouseffectsofdumping
ortocease exports altogether. Article 8.8allows thegovernment tosuspend aninvestigation forno
more thanfiveyears where (1)anundertaking hasbeenoffered (2)sufficient evidence indicates the
existence ofdumping andmaterial injury and(3)theexporter doesnotrequest theinvestigation to
becontinued.
13. Article 8.2oftheA-DAgreement states thatpriceundertakings shallnotbe"sought oraccepted"
from exporters untilthere isapreliminary affirmative determination ofdumping andinjury caused
bydumping. However, Article 8.7oftheCustoms Law(page 16)allows anexporter toofferanA-D
price undertaking totheGovernment "[w]hen aninvestigation under paragraph 5hasbeeninitiated".
Similarly, Article 7.8oftheCustoms Law(page 10)allows anexporter ortheauthorities oftheexporting
country tooffer aCVD undertaking "where aninvestigation hasbeeninitiated under paragraph 6".
Please explain thisapparent inconsistency.
14. Article 8.8oftheCustoms Law(page 16)states thatA-Dundertakings maybeenacted "so
longasthetermofvalidity ofwhich islessthanfiveyears". However, Article 7.9oftheCustoms
Law(page 11)states thatthe"valid period should belimited within fiveyears" forCVD undertakings.
Does thisdifference inlanguage mean thatthegovernment hasdiscretion toaccept aCVD undertaking
foraperiod greater thanfiveyears?
ALL OTHERS, NEW SHIPPERS
AllOthers Rate
15. Howwilltherateforthose producers whohavenotbeenindividually investigated becalculated
inA-Dcases?
NewShippers
16. Theevidence required forinitiation ofanewshippers review includes evidence ontheamount
ofdumping (A-D Cabinet order Art.7.2(4) page44))whatbasisintheAgreement existforrequiring
thisevidence prior toinitiation ofanewshipper review?G/ADP/W/199
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JUDICIAL REVIEW
TheJapanese A-D/CVD legislation submitted totheWTO contains noexplicit provision for
judicial review offinaladministrative A-DorCVD actions. Article 13oftheA-DAgreement and
Article 23oftheSCM Agreement require thateachmember provide forjudicial review ofsuchactions.
17. Canyouclarify whether independent judicial review isavailable inJapan forA-DandCVD
determinations, asrequired bytheA-DandSCM Agreements?
Implementation ofadverse panel reports:
18. IfJapan chooses toimplement anadverse WTO panel report, arethere anyprovisions under
Japanese lawspecifically forimplementing thepanel reports?