INTERNATIONAL COUNCIL OF CHEMICAL ASSOCIATIONS

June 2001

The International Council of Chemical Associations (ICCA) is an organization of leading trade associations representing almost 80% of chemical manufacturers worldwide. World chemical industry production exceeds US$1.7 trillion annually, and nearly one-third of this production is traded internationally.

The worldwide market for chemicals is one of the most open, transparent and widely traded of all industrial sectors. Import tariffs for signatory countries to the Chemical Tariff Harmonization Agreement (CTHA) are already very moderate. An open market for chemicals, however, brings not only healthy competition but also unfair trade practices such as injurious dumping.

ICCA believes that it is essential to have an effective WTO anti-dumping instrument that is implemented in a non-discriminatory manner on a global basis and that a new WTO round of negotiations is the most suitable forum for discussing how to achieve this.

ICCA feels that the core provisions of the existing WTO Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 ("WTO Anti-dumping Agreement") do not need to be redefined. They represent the outcome of negotiated compromises among divergent interests of different member countries.

ICCA strongly urges the negotiating authorities to pursue a uniform and non-discriminatory transposition of the WTO Anti-dumping Agreement into all WTO members’ legislation.

This process should be accompanied by the transparent, predictable, harmonized and non-discriminatory enforcement of the anti-dumping instrument within each customs territory.

ICCA believes that a new round of multilateral trade negotiations is the most suitable forum for proposing specific technical issues that need to be addressed in order to achieve fair and effective implementation of the WTO Anti-dumping Agreement by each WTO member.

1. The WTO Anti-dumping Agreement should be transposed accurately into domestic legislation by all WTO members and according to the same standards.

Several WTO members have not transposed the WTO Anti-dumping Agreement into domestic legislation, giving rise to legal uncertainties that directly affect trade. Furthermore, most of them have adopted laws whose standards are divergent. As a consequence, some companies have been put at an economic disadvantage vis-à-vis their trade competitors acting in accordance with "less demanding" rules. An accurate transposition into each WTO member’s domestic legislation would assure legal security, enhanced transparency, and greater predictability to the full advantage of all companies trading internationally.

The specific needs of developing countries should be addressed by:

• continuing to provide technical assistance to their legislative drafting and regulatory processes;
• promoting and assisting in their use of the anti-dumping instrument consistent with the new legislation and regulations;
• granting transitional periods for the least developed countries that allow them to apply domestic anti-dumping laws within a longer time period.

2. A standard questionnaire should be developed and adopted by all WTO members that can be used by investigating authorities to collect information and data from all parties involved in an anti-dumping proceeding. Only information strictly relevant to the proceeding should be requested. 
   
   A clear and defined information package, to be provided with the questionnaire, would be designed to:

• alleviate the burden for both investigating authorities and individual companies;
• speed up the proceeding;
• take into account the specific needs of small and medium-sized enterprises;
• pave the way for a uniform methodology for calculating the margin of dumping and the injury;
• avoid discriminatory treatment of companies by harmonizing the reporting requirements governing the proceeding.
  
3. When investigating authorities resort to the cost of production in the determination of dumping or in calculating the extent of the injury of a WTO member's industry:
   
1. costs must be calculated on the basis of accounting records on the condition that they are independently audited in accordance with international accounting standards;
2. all costs and factors considered to have direct economic relevance to the production process should be taken into account, even if not included in the accounting records.

Accounting methods vary from country to country and their requirements can be driven by fiscal policy considerations. Using internationally recognized accounting standards would help to avoid discrimination resulting from different methods of calculating the costs of production. Predictability and transparency would be strongly enhanced. In particular, when reconstructing cost of production, investigating authorities should take into account all costs relating to production, even if some have been allocated in the accounting systems used, to a different (upstream or downstream) product.

4. All WTO members should adopt uniform and compulsory time limits for carrying out each type of anti-dumping investigation (new cases, reviews, anti-absorption, and in case of circumvention). These limits could be expressed by specifying minimum and maximum time frames (‘no less than…no more than…’).
   
   Uniform and compulsory time limits would reduce discriminatory treatment of companies under the legislation applicable in a specific case and enhance legal certainty and predictability.
   
5. The extension of anti-dumping measures to new products should be subject to specific reviews aimed at establishing whether these products can actually be considered within the definition of like-product as provided in national anti-dumping legislation.
   
   Due to the fast pace of technological innovation, new products that are similar to those subject to an anti-dumping measure are often put on the market without being necessarily comparable to the original. ICCA believes that innovation will not be hampered if the scope of anti-dumping measures is extended to new products by complying with the text and the spirit of the WTO Anti-dumping Agreement. Inclusion of new products into the scope of existing anti-dumping measures should be done on a case-by-case basis within a specific review aimed at assessing whether these products are substitutable.
   
6. All WTO members should make sure that submissions to sunset a case are accurate and adequate, that sunset investigations are effectively carried out, and that all parties concerned are given the right to participate in a sunset proceeding on an equitable basis. It is important that WTO members not circumvent the WTO Anti-dumping Agreement by allowing anti-dumping measures to be automatically renewed after five years without requiring harmonized substantial and documented prima-facie evidence for sunset requests.
   
7. All WTO members should agree on a common and clear definition of circumvention and fraudulent evasion of anti-dumping measures. In addition, they should clearly define the appropriate instrument to address such practices.

Summary

To better address the issues raised above, the Committee on Anti-dumping Practices and its subsidiary bodies should have a more relevant role in ensuring conformity of national anti-dumping legislation and its implementation with the letter and spirit of the WTO Anti-dumping Agreement.

Giving this Committee and its subsidiary body the competence to issue recommendations at the request of WTO members or to parties other than governments would help to resolve swiftly and effectively the practical problems linked to the application of this instrument and to avoid abuses of it. In particular, the Committee could assess the soundness of the criteria used by national authorities to decide the initiation of an investigation.

Finally, such a competence would enhance the "educational role" that the Committee should have in the legislative field towards all WTO members.

For an electronic version of this and other ICCA positions on trade, please visit the ICCA web site at www.icca-chem.org