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World
Trade Organization |
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TN/RL/GEN/8 |
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(04-3028) |
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Negotiating Group on Rules |
Original: English |
PROHIBITION
OF ZEROING[1]
Communication
from Brazil; Chile; Colombia; Costa Rica; Hong Kong, China; Israel;
The following communication, dated
24 May 2004, is being circulated at the request of the Delegations of Brazil; Chile; Colombia;
Costa Rica; Hong Kong, China; Israel; Japan;
Korea; Mexico; Norway;
Singapore; Switzerland; 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)/57), also be circulated as a formal document.
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I. BASIC
PRINCIPLE
·
An
AD investigation shall determine whether imports from an exporter or
producer of a product as a whole have
been dumped in the importing market, NOT whether there are individual
sales of that product or models of that product, which have been
sold below normal value.
·
A
“fair comparison” should be done between export prices of all
comparable transactions and normal value.
·
Thus,
"Zeroing" must be prohibited in all methods of comparison and
in all AD proceedings, and a single dumping margin should be calculated for the
entire period of investigation.
II. PROBLEM
OF THE CURRENT AD AGREEMENT
· Although the above-mentioned basic
principle is embodied in the current AD Agreement, there exist disagreements
among Members over the scope and extent of the prohibition of "zeroing".
III. AMENDMENT
1. Prohibit the Practice
of “Zeroing” in the Calculation of Dumping Margins in All AD Proceedings
Proposal:
Amend Article 2.4.2 to explicitly
provide that regardless of the basis of the comparison of export prices to
normal value (i.e. weighted average-to-weighted average or
transaction-to-transaction, or weighted average-to-transaction), all positive
margins of dumping and negative margins of dumping found on imports from an
exporter or producer of the product subject to investigation or review must be
added up.
Further amend the first sentence of
Article 2.4.2 to clarify that the Article applies to initial investigations and
all subsequent reviews under Articles 9 and 11.[2]
Explanation:
These proposals are intended to
clarify that regardless of the basis of the comparison methodology used by
particular authorities, positive margins of dumping and negative margins of
dumping must be added up in the determination of the margin of dumping for the
imports of the product as a whole in both the initial investigations and subsequent
reviews.
2. Clarify That A Single
Margin of Dumping Must Be Calculated for the Entire Period of Investigation or
Review.
Proposal:
Add a provision to Article 2.4
clarifying that, regardless of the comparison methodology, if margins of
dumping are determined separately for imports during multiple portions of the
entire period of an investigation or review, the margin of dumping to be
determined in the investigation or review must be a single margin of dumping for
all imports during the entire period of investigation or review.
Explanation:
It is possible to effect “zeroing”
by subdividing the period of investigation or review and calculating separate
margins for each such period (e.g. month, quarter, semi-annual). Calculating margins for subdivided periods
separately and not offsetting the positive margins with negative margins for
the entire period of investigation or review can have the same effect as
zeroing. The fact that an exporter is
dumping in some portion of the period of investigation or review, but has no
margin of dumping on exports as a whole during the full period of investigation
or review, does not justify finding margins of dumping.
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