 
  WORLD TRADE  
ORGANIZATION  TN/RL/GEN/27 
2 December 2004 
 (04-5245) 
Negotiating Group on Rules Original:   English 
 
  
PROPOSAL ON THE DEFINITION OF DOMESTIC INDUSTRY 
ARTICLE 4.1 OF THE ANTI-DUMPING AGREEMENT (ADA) 
 
Communication from Brazil;  Chile;  Colombia;  Cost a Rica;  Hong Kong, China;  Israel;  Japan; 
  
Korea, Rep. of;  Norway;  Singapore;  Switzerl and;  the Separate Customs Territory of Taiwan, 
Penghu, Kinmen and Matsu;  and Thailand  
 
 
 The following communication, dated 30 November 2004, is being circulated at the request of 
the Delegations of Brazil;  Chile;  Colombia;  Costa Rica;  Hong Kong, China;  Israel;  Japan;   Korea, Rep. of;  Norway;  Singapore;  Switzerla nd;  the Separate Customs Territory of Taiwan, 
Penghu, Kinmen and 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)/ 182), also be circulated as a formal document. 
 
_______________ 
 
 
Description of Problem: 
  Article 4.1 of the ADA defines the term “domestic industry” as referring to (a) “the domestic 
producers as a whole of the like products” or to (b) “those of them whose collective output of the 
products constitutes a major pro portion of the total domestic pr oduction of those products”. 
 
 Although Article 4.1 encompasses the idea that the domestic industry shall refer if not to the 
producers as a whole at least to the major part of such producers, a former WTO panel
1 found that the 
term “a major proportion” does not require the ma jority (more than 50 per cent) but "important, 
serious or significant" proportion of total dome stic production. In the absence of unequivocal 
guidance in the ADA on the issue, antidumping duties may be adopted on the basis of an injury determination found to exist in a quite limited pr oportion of the domestic production of the like 
product. 
 
 In a hypothetical example in which the authority  defines “domestic industry” as the domestic 
producers whose collective output of the like product constitutes 30 per cent of the total domestic 
production of that product, antidumping duties coul d be imposed where 70 per cent of the domestic 
producers of the like product face no problems wh atsoever related to dumped imports, potentially 
causing a serious economic distortion in the market. 
 
                                                     
 
1 Argentina - Definitive Anti-Dumping Duties on Poultry from Brazil (WT/DS241/R). TN/RL/GEN/27 
Page 2  
 
 Elements of Solution: 
 
 To avoid such a situation, it should be made clear that “a major proportion” refers to “the 
major proportion” of the domestic industry, that is to  say, more than 50 per cent of the total domestic 
production. 
 
Proposal 1: 
 
 Amend Article 4.1 as follows
2: 
 
“For the purpose of this Agreement, the te rm “domestic industry” shall be interpreted 
as referring to the domestic producer s as a whole of the like products or in 
exceptional cases provided for in this Agreement3, to as high a proportion of the 
producers as possible, but not less than  those of them whose collective output of 
the products constitutes the major proportion (more than 50%)  of the total domestic 
production of those products, except that:” 
Description of Problem: 
  Article 4.1, as amended above, defines that  “domestic industry” refers to the domestic 
producers as a whole of the like products or, exce ptionally, to “the major proportion” of the total 
domestic production of the like product.  Nevertheless,  there is no clear discipline establishing the 
conditions or situations in which “the major propo rtion” of the total domestic production of the like 
product is to be used.  The lack of clarity in this regard has a potential impact on how injury 
determinations are to be carried out. 
 
Elements of Solution: 
 
 It is necessary to establish th at the injury analysis carried out by the authorities must refer to 
the total production of the like product in the importing Member, as defined in Article 4.1. 
 
 In situations in which authorities clearly demonstrate that they do not have information 
concerning the total production of the like product, the injury analysis must be carried out with all 
information authorities may have regarding the dome stic producers, provided that such information 
relates to the domestic producers whose collective output of the like product constitutes the majority 
of the total domestic production of that product, that is, more than 50 per cent of the total production. 
 
 The authorities shall demonstrate that, despite  the opportunity given to all producers to 
respond to questionnaires, it was not possible to undertake the injury analysis on the total production 
of the like product.  
 
Proposal 2: 
 
 Add a new provision to the ADA as follows: 
 
“Authorities shall make every effort to obtain all releva nt evidence concerning all 
domestic producers of the like product for the purpose of making an injury 
determination. In exceptional cases where it is not possible to obtain evidence which 
                                                     
 
2 Regarding current Article 4.1(i), FANs will, at a later stage, return to the question of whether, in 
specific situations or circumstances, certain parts of total domestic production may be excluded for the purpose 
of injury determination. 
3 See proposal 2.  TN/RL/GEN/27 
 Page 3 
 
 
 covers all domestic producers,  authorities shall use all evid ence obtained relating to 
domestic producers, provided that such evid ence relates to as high a proportion of the 
producers as possible, but not less than t hose of them whose collective output of the 
products constitutes the major proportion (m ore than 50%) of the total domestic 
production of those products. In such a ca se, the authorities shall provide a reasoned 
explanation demonstrating why it could not base the injury assessment on evidence 
covering domestic producers as a whole.” 
__________ 
  
 
 