RESTRICTED
WORLD TRADE G/ADP/W/235
G/SCM/W/245
ORGANIZATION 1December 1995
(95-3920)
Original: English Committee onAnti-Dumping Practices
Committee Subsidies andCountervailing Measures
QUESTIONS CONCERNING THE NOTIFICATIONS PROVIDED BY
COSTA RICA1OFLAWS AND REGULATIONS UNDER
ARTICLES 18.5AND 32.6OFTHE AGREEMENTS
Thefollowing communication, dated 30November 1995, hasbeenreceived fromthePermanent
Mission ofCanada.
_______________
Withreference totheNotification ofLaws andRegulations byCosta Ricaunder Article 18.5
oftheAgreement onImplementation ofArticle VIandArticle 32.6oftheSubsidies andCountervailing
Measures Agreement oftheGATT 1994, document G/ADP/N/1/CRI/1-G/SCM/N/1/CRI/1 dated
30March 1995 totheCommittee onAnti-Dumping Practices andtheCommittee onSubsidies and
Countervailing Measures, Canada would liketoaddress thefollowing items:
Definitions
1. According totheCentral American regulations, adirectly competitive article is:
Onewhich isnotidentical orlikearticle interms oftheonewithwhich itiscompared,
yetissubstantially equivalent forcommercial purposes because itisintended forthe
same useandisinterchangeable.
Itappears thatthisconcept isonlyusedinthecontext ofsafeguard actions. Does theCosta
Rican delegate envision areason foremploying thisterm inthecontext ofananti-dumping or
subsidies/countervail investigation?
2. According toArticle 4oftheCentral American regulations:
Each Stateparty shallorganize ajointcommission, which shallinclude participation
bytheprivate sector andshallbecoordinated bytheDirectorate.
Thedirectorate shallinvestigate, analyse andassess matters pertaining tounfair business
practices ortheapplication ofasafeguard clause andsubmit atechnical study tothe
jointcommission, whose opinion shallbetransmitted totheappropriate Minister, in
accordance withthese Regulations.
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CouldtheCostaRicandelegatepleaseindicatewhatCostaRicanagencywillactasthedirectorate
referred toinArticle 4?Could theCosta Rican delegate please elaborate ontherules ofprocedure
forthejointcommission? Forexample, willtheCosta Rican jointcommission becomprised of
permanent members? Willthere beconflict ofinterest provisions governing theeligibility for
participation inparticular cases ofprivate sector members? Towhich Minister willtheCosta Rican
jointcommission submit itstechnical study andwhatrolewillthatMinister haveinthedecision-making
process?
Determination ofDumping
3. According toArticle 6.1.(b) oftheCentral American regulations:
Intheabsence ofsuchpriceinthedomestic market oftheexporting country orcountry
oforigin, ifthepriceoftheimported product islessthanthehighest comparable export
priceofanidentical orlikeproduct sentfromtheexporting country orcountry oforigin
toathirdcountry intheordinary course oftrade (emphasis added);
Could theCosta Rican delegate please explain theWTO basis fortheuseofthehighest
comparable export price ofanidentical orlikeproduct senttoathird country rather thanonewith
arepresentative price?
4. WTO Anti-Dumping (A-D) Agreement Article 2.2.1.1 requires thatcost-plus based normal
values shallnormally becalculated inaccordance withthegenerally accepted accounting principles
oftheexporting countries. Does Costa Ricaintend tooblige itsinvestigating authorities tocalculate
costs intheabove manner?
5. WTO A-DAgreement Article 2.2.1.1 alsorequires thatcosts shallbeadjusted appropriately
fornon-recurring items which benefit future and/or current production. Furthermore, afootnote to
thissame WTO provision, requires thatcosts beadjusted appropriately forstart-up operations. Such
commitments appear absent fromtheCentral American regulations. Could theCosta Rican delegate
clarify howCosta Ricaintends torequire thatinvestigating authorities adjust costs inthemanner
described above?
6. Article 6.2.oftheCentral American regulations define ordinary course oftrade as:
habitual trade ortrade during aperiod notexceeding oneyear, immediately prior to
thedateofexport tothedomestic market, inthemarket oftheexporting country or
country oforigin withregard toidentical orlikegoods, between buyers andsellers
whoareindependent ofoneanother.
HowwillCosta Ricaprovide forthedefinition ofordinary course oftrade asprovided inWTO
A-DAgreement Article 2.2.1?
7. Article 8oftheCentral American regulations provide thefaircomparison provisions (WTO
A-DAgreement Article 2.4)between normal value andexport price. While Article 8doesprovide
ageneral provision forotherdifferences which affect thecomparison ,explicit reference totheobligation
toconsider thelevel oftrade, quantities andcurrency adjustments appear tobeabsent. Asregards
thislastitemthere appears tobenoprovision forcurrency hedging andthetreatment oftransactions
during aperiod characterised byasustained movement inrelevant exchange rates. Could theCosta
Rican delegate please clarify howinvestigating authorities willimplement these WTO obligations?G/ADP/W/235
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Injury
8. Inaddition totherequirements specified inArticle 15oftheCentral American regulations
outlining thefactors tobeconsidered forinjury determinations, WTO A-DAgreement Article 3.5
requires thatthedemonstration ofinjury shallbebased onanexamination ofallrelevant evidence before
theauthorities. Could theCosta Rican delegate please indicate whether provision exists forthe
examination ofother evidence, suchasthatprovided bytheexporter, inthedetermination ofinjury?
Initiation andInvestigation
9. WTO A-DAgreement Article 5.5requires authorities togivenotice ofaproperly documented
application totheforeign government priortoinitiation. Could theCosta Rican delegate please indicate
therelevant provision intheCentral American regulations forthisWTO commitment?
10. Article 21oftheCentral American regulations specifies that:
When theamount ofthedumping orsubsidy islessthan1percentadvalorem, itshall
beconsidered insignificant andtheinvestigation shallbeterminated.
Could theCosta Rican delegate please indicate whether Costa Ricaintends toemploy theWTO
A-DAgreement deminimus margin andnegligible volume criteria?
11. Could theCosta Rican delegate please clarify theWTO basis forArticle 22?
12. Beyond theprovisions inArticle 24oftheCentral American regulations, willCosta Rican
authorities require thesatisfaction oftheindustry support requirement fordomestic producers whose
collective output constitutes more than50percentofthetotalproduction ofthelikeproduct asprovided
forinWTO A-DAgreement, Article 5.4?
13. Article28oftheCentralAmericanregulationsoutlinesthetreatmentofconfidentialinformation.
According toArticle 28:
Anyinformation which, byitsnature, isqualified bytheinvestigating authority as
confidential maynotbedisclosed orconsulted bytheparties, unless, intheopinion
oftheauthority, itisimportant forcounterarguments, inwhich caseitshallaskthe
party providing theinformation forasummary thatisnotconfidential innature.
TheCosta Rican implementation ofthiscommitment appears tobeinconsistent withWTO
A-DAgreement, Articles 6.5.1 and6.5.2 inthatinvestigating authorities donotappear to(1)always
request anon-confidential summary and(2)onlyaccept information asconfidential intheabsence of
suchasummaryinexceptionalcircumstances.CouldtheCostaRicandelegatepleaseclarifythisapparent
inconsistency?
14. Article 28oftheCentral American regulations doesprovide interested parties withtheright
toviewinformation thatisnotconfidential forthepurposes ofpreparing theirarguments. However,
there appears tobenoprovision whereby interested parties willbegiven opportunity torespond to
information submitted bythecomplainant, including submitting information theyconsider relevant
ordefend theirinterests. Could theCosta Rican delegate please indicate theCosta Rican legalbasis
whereby interested parties willbeaccorded treatment asprescribed byWTO Articles 6.2and6.9?G/ADP/W/235
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15. Ofrelated interest, WTO A-DAgreement Article 6.1.1 requires thatauthorities shallallow
atleast30+7 daysforexporters orforeign producers torespond torequests forinformation anddue
consideration should begiven toextension requests and,upon cause shown, suchextension should
begranted. Could theCosta Rican delegate please indicate theprovisions forthesubmission of
questionnaires toexporters orforeign producers?
Provisional Measures
16. According toArticle 34oftheCentral American regulations:
Theduration ofprovisional measures maynotexceed sixmonths andmaybeextended
forthesame period inspecial circumstances.
Could theCosta Rican delegate please clarify themaximum length fortheapplication of
provisional duties inspecial circumstances? Could theCosta Rican delegate please confirm thatthe
definition ofspecial circumstances would belimited totheconsideration ofwhether adutylower than
themargin ofdumping would besufficient toremove injury, asprovided forbyWTO A-DAgreement
Article 7.1(i)?
Review
17. Could theCosta Rican delegate please indicate theprovisions intheirregulations forexpedited
reviews asprovided forinWTO Article 9.5?
18. Could theCosta Rican delegate please indicate theprovisions intheirregulations forfive-year
reviews asprovided forinWTO A-DAgreement Article 11.3?
19. Itappears thattherearenoregulations inCosta Ricaensuring WTO A-DAgreement Article 13
obligations. Could theCosta Rican delegate please confirm theexistence ofanindependent tribunal
asrequired byWTO A-DAgreement Article 13?
General Issues
20. WTO A-DAgreement Article 6.12requires thatindustrial users (andconsumer organizations
where theproduct iscommonly soldattheretail tradelevel) beallowed toprovide relevant information
Could theCosta Rican delegate please clarify theCosta Rican procedures forpublic interest
considerations?
21. Could theCosta Rican delegate please indicate whether anti-dumping/ countervailing duties
willbeapplied onaprospective orretrospective basis?
22. What isthelegalmechanism inCosta Rican lawfortheimplementation ofdecisions rendered
byaWTO panel?
23. Isthere anymeans bywhich domestic interests could useCosta Rican laws (such asa
constitutional challenge) toprevent thegovernment from implementing aDSBpanel decision?
24. Which competent authority within theCosta Rican Government willberesponsible foraccepting
complaints, initiating investigations, making apreliminary determination andapplying provisional
reviews? Willthesame authority examine boththedumping/subsidizing andinjury aspects ofan
investigation?G/ADP/W/235
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Subsidy Provisions
25. TheCosta Rican legislation notified represents regulations thatwere entered intoforce in
January 1993. CanCosta Ricaclarify whether theprovisions oftheWTO A-DandSCM Agreements
areintended toapply toinvestigations andprevail overanycontrary ordifferent provisions contained
inprevious laws? Totheextent thatthere areinconsistencies between thenotified lawandtheWTO
SCM Agreement, canCosta Ricaidentify thespecific partsofitsexisting legislation thatwillcontinue
toapply toinvestigations, thespecific articles thatwillchange andhowexactly these articles areto
bechanged? Forexample:
Thedefinition ofwhatconstitutes asubsidy assetoutunder Chapter III,Article 11
isnotconsistent withtheWTO SCM Agreement (i.e., thedefinition doesnotinclude
anexhaustive listofpractices thatconstitute asubsidy asprovided under Article 1.1(a)
oftheWTOSCMAgreement,anddoesnotincludetherequirementunderArticle1.1(b)
thatabenefit beconferred, forasubsidy toexist). WilltheGovernment ofCosta Rica
befurther clarifying theSCM requirement thattheexistence ofasubsidy requires that
abenefit beconferred?
FurthertoArticle11ofChapterIII,doestheGovernmentofCostaRicaconsiderincome
orprice supports inthesense ofArticle XVIofGATT 1994 tobesubsidies?
Thenotified legislation doesnotappear toprovide forstandards fordetermining export
subsidies assetoutunder Article 3oftheSCM (including Footnote 4oftheWTO
SCM andtheexception relating totheWTO Agriculture Agreement). WillCosta Rica
clarifyhowitintendstodefineexportsubsidies?Istheprohibitionofsubsidiesgoverned
byother lawsorregulations?
Thenotified legislation does notappear toprovide disciplines inrespect ofnon-
actionable subsidies asprovided under Article 8oftheSCM. WilltheGovernment
ofCosta Ricaclarify whether allfinancial contributions relating toresearch, regional
development andenvironment willnotbeconsidered tobesubsidies within themeaning
ofArticle 8oftheSCM?
Thelegislation notified doesnotappear toconsidering thespecificity ofasubsidy in
accordance withArticle 2oftheSCM. WilltheGovernment ofCosta Ricaclarify
whether thedejureanddefacto testsofspecificity, under Article 2.1(b) and2.1(c)
oftheSCM willbeapplied indetermining specificity ofasubsidy since? Willthe
legislation require specificity tobesubstantiated onthebasis ofpositive evidence?.
Thelegislation alsodoesnotappear tocontain provisions relating tosub-federal
subsidies. WillCosta Ricaclarify whyprovisions forsub-federal subsidies havenot
beenincluded?
26. WilltheGovernment ofCosta Ricaindicate whether thislegislation willbethelawofgeneral
application and,intheevent ofconflict, willsupersede anyother Costa Rican lawsthatmayconflict
withthelegislation?