 
  WORLD TRADE  
ORGANIZATION  TN/RL/GEN/23 
20 October 2004 
 (04-4418) 
Negotiating Group on Rules Original:   English 
  
 
PROPOSALS ON ISSUES RELATING TO THE INITIATION 
AND COMPLETION OF INVESTIGATIONS 
 
Communication from Chile;  Colombia; Costa Rica;  
Hong Kong, China;  Japan;  Korea;  Norway;  Singapore;  
Switzerland;  the Separate Customs Territory of  
Taiwan, Penghu, Kinmen and Matsu;  and Thailand  
 
 
 The following communication, dated 18 October 2004, is being circulated at the request of the Delegations of Chile;  Colombia;  Costa Rica;  Hong Kong, China;  Japan;  Korea;  Norway;  
Singapore;  Switzerland;  the Separate Customs Te rritory of Taiwan, Penghu, Kinmen, Matsu;  and 
Thailand. 
 
 The submitting delegations have requested that this paper, which was submitted to the Rules 
Negotiating Group as an informal document (JOB(04)/ 152), also be circulated as a formal document. 
 
_______________ 
 
 
Description of Problems:
 
 
 The determination by the authorities to initiate an investigation is one of the most important 
stages in an anti-dumping proceeding.  The initiation of an investigation alone has significant chilling 
effects, not only for the companies directly involved, but also on trade in general.  The administrative 
and financial burdens on exporters a ffected by the initiation of investigations, who bear the burden of 
responding to highly detailed questionnaires, also have a substantial nega tive impact on business 
activities.  Moreover, the authorities bear the burde n of reviewing and verifying those questionnaire 
responses.  Such chilling effects and burdens are not  warranted in cases where the initiation is poorly 
justified.   An investigation is not warranted if the pe tition does not receive sufficient support from the 
domestic producers of the like products in the importing country.  Specifically, Article 5.1 of the 
ADA requires the authorities to determine that the ap plication has been made “by or on behalf of the 
domestic industry”.  This is some times referred to as the “standing” requirement.  Article 5.4 of the 
AD Agreement provides that the standing requirement is  fulfilled if an application is supported by at 
least 50 per cent of those expressing an opinion and if the application is supported by at least 25 per 
cent in terms of the total production of the domestic  industry.  This provision, however, may enable 
the initiation of an investigation ev en if less than 25 per cent of th e total production of the domestic 
industry supports the petition.  Such an investiga tion might detrimentally affect domestic consumers, 
foreign exporters, and even a subs tantial portion of the domestic industry itself.  Thus, the current 
standing criteria should be improve d to meaningfully filter anti-dumping petitions that are supported 
by only a minor portion of the total domestic production of the like product.  TN/RL/GEN/23 
Page 2  
 
 The current AD Agreement does not provide expor ters and producers with an opportunity to 
comment prior to initiation.  Thus, authorities mu st base their initiation decision primarily on the 
information and arguments contained in the appli cation of the petitioners, which could be biased or 
based on a simple misunderstanding of facts.  Without timely input from other interested parties, including the exporters and producers of the expor ting country, the authorities might not have the 
information necessary to make fair and even-hande d decisions on initiation.  As a result, both the 
authorities and respondents may be subjected to long, costly investigations based on frivolous applications. 
 
Once an investigation is initiated, Article 5. 10 establishes that the investigation must be 
concluded within one year and in no case more than  18 months.  We believe that extensions up to 
18 months are unnecessary and excessive .  A longer investigation causes greater uncertainty for 
exporters and importers, chilling effects on tr ade, and greater burdens on the parties. 
 Finally, if an investigation is concluded without the application of final anti-dumping 
measures, or if an authority otherwise issues a decision that results in the revocation or non-
application of measures, there should be no reason to initiate a new investigation on the same product 
from the same Member within one year. 
 
Elements of a Solution:
 
 
1.  Standing Requirement  1-1  Improve the standing threshold to require support by more than 50 per cent of total 
production of the like products 
 Proposal:
 
  Amend Article 5.4 in order that an investiga tion shall not be initiated unless the application is 
supported by domestic producers of the like product whose collective output exceeds a threshold of at 
least 50 per cent of the total domestic production of the like product in the importing country.
1 
 
Explanation:  
 
 Under the current two-pronged standing test , an anti-dumping proceeding may be initiated 
based on only minority support.  For example, even where 24 per cent of the producers of the like products oppose an anti-dumping petition, 25 per cent of the producers can still satisfy the standing 
requirement where the majority of the producers of th e like products, 51 per cent in this case, remain 
silent.    
 The minimum standing threshold should be increased to require sufficient support from the 
relevant domestic producers.  (The FANs propose only a single test  -- i.e., companies supporting the 
petition must meet the threshold of at least 50 per cent of total domestic production of the like 
product.  Given that the threshold would be 50 per cent of domestic production, there would be no 
need for two separate tests or prongs.)  This is particularly important to ensure that the domestic 
producers will provide sufficient information during the investigation.  When the level of support 
                                                     
 
 1 The FANs note that und er current provisions, Articles 3, 4 and 5 of the ADA are interlinked as 
regards the issues of standing, the definition of the domestic industry and injury.  The FANs will elaborate 
proposals on the definition of the term “domestic industr y” at a later stage.  However, the FANs are of the 
opinion that Article 4.1(i) as currently drafted should not apply to the standing requirement.  Furthermore, the implications of Article 4.1(ii) will be addressed in the proposal on the definition of the term “domestic 
industry.”  TN/RL/GEN/23 
 Page 3 
 
 
 from the domestic producers is low (even if the curr ent standing requirement is met), the majority of 
the domestic producers presumably does not supp ort the petition.  Such non-supportive companies 
generally have little or no incentive to cooperate in th e investigation.  This can result in incomplete 
injury data, provided only (or mainly) by the minority of producers that supported the application.  
This in turn can lead to unwa rranted injury determinations.  
 1-2  Clarify that the standing requirement is determined in terms of individual support by 
the domestic producers as a whole and that  representation by trade associations or 
groups should not be counted collectively when such determination is made. 
 
 Proposal:
 
 Add a new footnote in Article 5.4 to clarify th at the standing determination should be based 
on the positions expressed by individual domestic producers. 
 Explanation:
 
 
The standing requirement may be substantially undermined when authorities take into account 
positions expressed collectively by trade associati ons, rather than by i ndividual producers, as 
illustrated in the following example: 
 
A trade association whose collective output constitutes  55 per cent of the total 
domestic production of like products  filed an application for an AD investigation. It was later 
found that 60 per cent of the association’s memb ers (expressed as a share of production) had 
supported the application, while the remaini ng 40 per cent of the members opposed it. 
However, the trade association filed the applic ation based on the collective production of the 
association because the majority of its  members supported the application.   
 
If the authorities count the total collective outpu t of the trade association as that of domestic 
producers supporting the application, they will overest imate the degree of domestic support.  In the 
above example, the authorities would consider th at 55 percent of the domestic producers supported 
the petition, whereas only 33 per cent of the domestic producers in fact did support it.  An 
investigation might be initiated with even less suppor t, if a number of the association’s members did 
not participate in the decision making process rega rding the application, as the following example 
illustrates:  
 
Assume that the association mentione d above makes decisions based a simple 
majority of the members that vote on a par ticular issue.  If only 60 per cent of the 
association’s members voted on the applicati on, with 40 per cent of the members supporting 
the application (and 20 per cent opposing), the association might deem that a majority of its 
voting members supported the application; and theref ore the association as a whole supported 
it.  However, only 40 per cent of the members expressed support.  Therefore, only 22 per cent 
of total production of the like product in the importing Member (40 per cent of 55 per cent) in fact expressed support. 
 In order to prevent the initiation of anti-dumpi ng investigations based on inadequate support, 
the standing criteria should be clarified, to ensu re that determinations are based on the positions 
expressed by individual producers, not on positions expressed collectively.  TN/RL/GEN/23 
Page 4  
 
 1-3  Clarify that an application for an anti -dumping investigation must list all known 
domestic producers who support the application 
 
 Proposal:
 
 
Add to Article 5.2(i) the requirement that the applicant must list all known individual 
domestic producers of the like product who support the application, and the volume and value of each 
of such producer’s domestic production of the like product. 
 
Explanation:  
 
The ADA requires the authorities to determine th e level of domestic producer support for the 
application.  To make this determination, th e authorities obviously must find out which domestic 
producers support the petition.  It would be very difficult in many cases for authorities to obtain this information on their own.  In contrast, applicants usually can obtain such information with relative 
ease.  Therefore, it makes sense to clarify that appl icants must provide this information in their 
applications for anti-dumping investigations.   
 
2.  Opportunity for exporters and producers to  comment before initiation of investigation 
  
 Proposal:
 
  Add a new provision in Article 5 to clarify that the authorities shall disclose the application 
for the initiation of an investigation to the know n exporters and producers in the exporting Member 
concerned, and to the government of the exporting Me mber.  The authorities also shall provide to the 
exporters and producers and the government of the exporting Member an opportunity to comment on the application within a reasonable period after the disclosure.
2  In particular, they must be provided 
with an opportunity to comment on whether there is sufficient evidence to justify the initiation of the 
investigation.  The authorities shall decide whethe r or not to initiate the investigation within [X] 
weeks after the disclosure, fully taking into acc ount the comments from the exporters and producers.  
  Replace the expression in Article 5.5 "unless a decision has been made to initiate an 
investigation" with the expression "until the author ities disclose the application for the initiation of an 
investigation in accordance with Article 5.[ ]".  
 Explanation:
 
  The authorities must make fair, unbiased and even-handed determinations in anti-dumping 
cases.  To facilitate such determinations, the AD Agreement requires that all parties have “a full 
opportunity for the defence of their interests” (ADA Article 6.2).  In particular, all parties may submit 
comments to the authorities at key stages – i.e., before the imposition of provisional and definitive 
measures.  It would be difficult if not impossible for authorities to make fair determinations if they did 
not consider the views of all interested parties.    
 However, the current AD Agreement does not  provide exporters and producers with an 
opportunity to comment prior to initiation.  Because the decision on initiation is extremely important, producers and exporters should have  an opportunity to comment.  This would help the authorities 
make fair and even-handed decisi ons on initiation.  It also woul d help to avoid long, costly 
investigations based on frivolous applications.  
                                                     
 
2 The FANs are willing to discuss what the duration of the reasonable period should be.  TN/RL/GEN/23 
 Page 5 
 
 
  It might be argued that disclosing the application would itself have a chilling effect on 
imports.  This might occur in some cases.  However,  we believe that any such effects are outweighed 
by the importance of even-handed initiation decisions.  In particular, if an investigation is initiated on 
the basis of a frivolous complaint, the “chilling eff ect” on trade would extend more than one year.  
Allowing producer/exporters to comment on initiati on will help to avoid frivolous initiations.  
Furthermore, the potential chilling effects due to th e pre-initiation procedure would be minimized by 
limiting the maximum time period fo r the procedures to [X] weeks. 
 
3.   Duration of an investigation 
 Proposal:
 
 Article 5.10 should be changed to require that investigations must be concluded within one 
year after initiation, unless exceptional circumstances require an extension of the investigation.  
Where such exceptional circumstanc es exist, the investigation must be concluded no more than [Y] 
months after initiation.   
 In addition, if an authority de ems that exceptional circumstances require the extension of an 
investigation, the ADA should require the authority before the initial one-year period elapses, to issue 
a public notice of this extension and to notify all interested parties. 
 
 Explanation
: 
 
Under Article 5.10, investigations may in special  circumstances be extended up to 18 months.  
However, such a long timeframe unnecessarily incr eases the uncertainty faced by exporters and 
imposes an excessive economic burden for countries that  are participating in the process.  Reducing 
the maximum period from 18 months would reduce these burdens, while providing sufficient time for 
authorities to finish the investigation process.  
4.  Prohibition of Back-to-back Investigations 
 
Proposal
: 
 
An authority must not initiate an anti-dumpi ng investigation within 12 months of a 
determination regarding the same product from the same Member which resulted in the non-
application or revocation of anti-dumping measures.   
 
 Explanation : 
 
This proposal is consistent with the princi ple set forth in the Decision on Implementation-
Related Issues and Concerns adopted by the Ministers at Doha.3  
 
__________ 
 
  
                                                     
 
3 WT/MIN(01)/W/10 paragraph 7.1. 