WTO negotiations - EU and Japan

Summary: July 22, 2003: WTO negotiations - EU and Japan determined to cut the costs of anti-dumping investigations for companies (Brussels)

In the on-going WTO negotiations under the "Doha Development Agenda" the EU and Japan have jointly submitted a proposal aimed at reducing the costs of participating in anti-dumping investigations. The paper targets practices such as excessive information requirements, inadequate procedural rules, unclear substantive rules and rules granting too much discretion to the investigating authorities. When confronted with these shortcomings, parties often refrain from defending their rights which in turn makes the adoption of anti-dumping measures easier. EU Trade Commissioner Pascal Lamy said: "Ensuring fair trade should go hand in hand with clear, transparent and predictable rules. This is the way we prevent abuses of the system. If our proposals are adopted, companies who are subject to anti-dumping investigations will have a real possibility to defend their rights. Cutting down costs of anti-dumping investigations is essential for exporters in developing countries, in particular, who often have scarce resources."

The joint EU-Japan paper identifies the main cost drivers in anti-dumping investigations and proposes solutions to reduce costs. Notably, it advocates standardisation of procedures (such as questionnaires, rules for on-the-spot verifications), better procedural rules (enhanced transparency, shorter periods for investigations, for example) and more operational substantive rules (in particular for reviews and for the injury investigation). All this, if implemented, would result in a significant reduction in the burden both on parties to an investigation (exporters, importers and domestic industry) and on the investigating authorities themselves.

Background

The costs of co-operation in anti-dumping investigations have increasingly become a matter of concern. Every individual exporter who is faced with the prospect of an anti-dumping or anti-subsidy investigation will weigh the costs of co-operating in such an investigation against the impact of having to face anti-dumping measures on his presence in the export market in question. Thus, in particular exporting producers who ship only comparatively small quantities to the market in question will be discouraged from co-operating if the costs of co-operation are high because participating in the investigation "may simply not be worth it".

The paper identifies the "cost drivers" in the WTO Anti-dumping Agreement. The most obvious one is the possibility to impose excessive information requirements, both in questionnaires and during on spot verifications.

However, there are also other areas with a cost dimension, i.e.

Duration of the investigation: investigations which drag on (currently up to 18 months) are costly for all involved. Solution: shorten period.
Deadlines for review investigations: Currently, there are no deadlines for reviews. Solution: introduce reasonably short deadline.
No mandatory recourse to lawyers.
Non-confidential summaries: the current rules allow for abuse of investigating authorities because they can always "hide" behind confidentiality requirements. Solution: clear rules on non-confidential summaries and the possibility to review the correctness of the non-confidential summary by a standing body operating under the auspices of the WTO Secretariat. Obviously, any confidential information would only be open for inspection by the standing body and must not be disclosed to the foreign government or to other parties.
Disclosure: current rules entitle parties to get information on relevant facts but not on legal assessment of these facts. In other words, parties can be kept in the dark because facts are open to interpretation are can therefore be deprived of the possibility to defend themselves properly. Solution: Disclosure should also cover the investigating authority's legal assessment.

The paper also proposes that any new rules should be more operational in order to increase predictability. This is in particular true for reviews (where there are currently hardly any rules) and the analysis of the injury suffered by the domestic injury (where rules offer an excessive margin of discretion).

The ideas presented in the paper would reduce the costs of co-operation in anti-dumping investigations without undermining the quality and thoroughness of such investigations.

Practically all ideas presented in the paper apply also to countervailing duty investigations and measures. The EU has already in its first submission in July2002 identified the cost aspect of anti-dumping investigations as an important topic for the WTO negotiations.

For more information:

http://europa.eu.int/comm/trade/issues/respectrules/tpi_en.htm

Ref: EC03-204EN
EU source: European Commission
UN forum:
Date: 22/7/2003

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