12 Dec 2019

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WTO panel rules for first time on the meaning of “particular market situation” in anti-dumping investigations

On 4 December 2019, the WTO dispute settlement Panel in Australia – Anti-Dumping Measures on A4 Copy Paper (DS529) released its report. This dispute concerned Australia’s measures imposing anti-dumping duties on certain exporters of A4 copy paper from Indonesia.  The central focus of the Panel was the meaning and application of the “particular market situation” provision in the WTO Anti-Dumping Agreement.

The meaning of this provision is important to the treatment of government-distorted costs in anti-dumping investigations. Can the effects of such distortions be offset by anti-dumping duties? Canada recently implemented new anti-dumping rules that target “particular market situation” input distortions (see Canada Implements New Anti-Dumping Rules Targeting Related-Company Input Dumping and “Particular Market Situation” Input Distortions”).

The Panel found that a situation arising from government action in whole or in part is not necessarily disqualified from constituting the “particular market situation”. The phrase has a potentially broad meaning that requires a fact-specific analysis that must be conducted on a case-by-case basis. The Panel explained that where a “particular market situation” is found to exist, the investigating authority must examine whether a “proper comparison” of the domestic and the export price is permitted or not, which calls for an assessment of the relative effect of the “particular market situation” on domestic and export prices.  This requires a qualitative comparison of the domestic and export prices because a purely numerical comparison between the two prices may not reveal anything about whether the domestic price can be properly compared with the export price. The qualitative assessment should focus on how the “particular market situation” affects that comparison, which can only be ascertained through an examination of all relevant factual circumstances.

The Panel’s report provides valuable guidance on the meaning and application of the “particular market situation” provision. However, it was not necessary for the Panel to comprehensively address all elements of the provision. It left some questions unanswered, including whether the distortion created by the “particular market situation” can be fully offset in the cost calculation when the “particular market situation” prevents a proper comparison between domestic and export prices.

Tereposky & DeRose has extensive experience in the interpretation and application of the WTO Anti-Dumping Agreement including the “particular market situation” provision. Should you have any questions regarding this Panel Report, we are at your disposal.

Greg Tereposky
613.237.1210
gtereposky@tradeisds.com

Daniel Hohnstein
613.237.9005
dhohnstein@tradeisds.com