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report of the �friends of the chair�
with respect to the ascm annex on facts available
by serdar baskin
before starting my consultation process i prepared questions for the consulting members in order to lay the ground for, and facilitate our discussions. one of the members preferred to respond in writing to all of the questions after consulting with its capital and asked me to send my query. i sent my query to all members which agreed to participate in the consultations on the �facts available� of the scm text with me for the sake of transparency and fairness among the members.
during my consultation process, i have consulted with the proponents of the documents tn/rl/gen/164 and tn/rl/gen/169, namely, india and china, respectively, and other members, namely australia, brazil, canada, egypt, european union, friends of anti-dumping group headed by the japanese delegation, south africa, the kingdom of saudi arabia and the united states.
all except one member pointed out that inclusion of annex of facts available in the scm text would be useful and that this had merits, while one member indicated its initial concerns about incorporating the ad annex on facts available and underlined the �sensitivity� of the issue and considered it as a �controversial� one. however, this member also expressed �flexibility� to further consider this issue.
i observed strong support for the idea of introducing guidelines on the use of facts available in cvd investigations. my impression is that nearly all members believe that the inclusion in the scm text of an annex on facts available would be useful.
there is, however, no consensus on how to achieve this. some of the members indicated that simple, straightforward transposition of the anti-dumping annex is the best option. these members highlighted that the amendments achieved in the annex on facts available of anti-dumping text at the end of the negotiations should also be reflected in the scm text.
on the other hand, some delegations explained their concern over a simple transposition. these delegations indicated that this issue is not part of the transposition process, but the negotiations on rules. they highlighted the differences between anti-dumping and countervailing duty investigations and underlined the need for the necessary modifications in this respect.
although there is divergence among members on how to draft the facts available annex of the scm text, members generally seem to agree that the facts available annex of the anti-dumping text would be a logical starting point.
in terms of the main differences in views, some members argued that full participation and cooperation by the �interested member� and �interested parties� is essential in conducting cvd investigations and the accurate determination of the subsidy amount. these members highlighted the importance of inclusion of this language in article 12.7.
concerning paragraph 2 and the last sentence of paragraph 3, some members indicated that the requirement to ask the interested member and interested parties to provide their response in a particular medium (e.g. computer tape) or computer language is not valid for cvd investigations because of the natural differences between anti-dumping and cvd investigations. these members further clarified that although information concerning export sales, domestic sales and cost of production in a specific format is required from exporters/producers in anti-dumping investigations, the same is not the case for cvd investigations. these members also highlighted that the language used in paragraph 2 and the last sentence in paragraph 3 regarding a particular medium (computer tape) or computer language is outdated. therefore there is no need to keep paragraph 2 and the last sentence of paragraph 3 in the annex on facts available in the scm agreement. some other members expressed support for this approach. but others raised concerns on the deletion of paragraph 2 and the last sentence of paragraph 3. these members clarified that although the language regarding medium computer tape or computer language may be considered as outdated, deletion of these paragraphs may cause problems, especially for small and medium sized companies in least developed and developing countries. other members also expressed that caution approach is needed when discussing the idea of deleting these paragraphs.
it is clear to me that there is no consensus among members with respect to whether paragraph 2 and the last sentence of paragraph 3 should be included in any facts available annex of scm agreement. that said, i should also note that a number of members seem to be willing to explore this matter further.
turning to paragraph 4, there is a common understanding among members that this paragraph is relevant in the scm context.
concerning the new language in paragraph 5 of the annex in china's proposal, most members that i consulted expressed concerns on this proposal. members highlighted that this proposal may encourage non-cooperation by questionnaire recipients. these members indicated the difficulties for the investigating authorities to determine the "reasonable ability to respond" or "unreasonable extra burden" for the respondent to provide the requested information. members also considered these concepts to be ambiguous. some members questioned what an investigating authority would do in a situation where information which is essential for the authority's determinations is not provided on the grounds of that this would go beyond the �reasonable ability� of the relevant interested party/member. in these cases, those members responded that the investigating authority has no option, but to resort to �facts available�.
some other members indicated that they needed more detailed and comprehensive explanations regarding the problems and how the proposal addresses these problems in order to better understand it. these members added their readiness and willingness to listen to, and work with the proponent on this issue.
some members pointed out their support for china�s proposal. these members also stressed that the concerns of other members raised in the plurilateral session should be taken into account.
china emphasized its strong preference for its proposed drafting in paragraph 5, which it considers addresses the problems appropriately.
concerning footnote 2 of paragraph 7 proposed by india, the proponent hinted that it could drop this footnote from its proposal. i would like to thank india for its flexibility.
concerning footnote 5 of paragraph 7 proposed by china, all members consulted support the idea of disclosing the names of the sources referred to in the disclosure for transparency purposes. however, there is great divergence of views concerning how to address confidentiality which may arise in this context. some of the members pointed out that confidentiality should be respected as stipulated under article 12.4 and that this was a general provision which is applicable in all circumstances and that therefore this will not breach confidentiality. contrary to this view, some members claimed that there is an obligation in this footnote to disclose the name of the sources consulted and in cases where using one interested party�s information or determination for the other non-cooperating or partially cooperating company, disclosure of the company name whose information is used may breach confidentiality. therefore, �due regard being given to confidential information� should be added to this footnote.
concerning the suggestion made by one delegation in the plurilateral session to introduce the phrase "interested member" into article 12.11 of the scm agreement which, as currently drafted, addresses problems that may be faced by "interested parties" in providing the requested information, members explain a broad range of different views. while some members expressed their support for this idea and pointed out that they saw merits in its inclusion others opposed it because it is not related with �facts available� and article 12.11 is only related with the problems of small and medium sized companies in developing countries, article 12.11 is a customized provision for smes in the scm agreement. some members also expressed that it is useful to discuss this suggestion and it is an issue that should be considered in the context of transposition.
taking into account the divergences among members, i believe that it should be useful to discuss this proposal whether it addresses china�s concern or not in the negotiating group. in this respect, the question of whether it is only a problem of the smes or also a problem of �interested member� in the context of cvd investigations might be useful to further explore.
another point in respect of both china's and india's proposals about the checking of information to be used as facts available against, respectively, �information published by the authorities�, or �information on government websites� in paragraph 7, has been consulted with the delegates. some delegates clarified their concerns about any language which discourages cooperation and shifts the burden to the investigating authorities requiring them to conduct an extensive search for all publicly available information, including government publications and websites and asked if the information is publicly available, or published by the government, or on a government website, the government of the responding member should provide such information directly. some delegates pointed out that �shall� should be replaced by �should� in paragraph 7 and explained that this amendment will solve the problem of shifting the burden to the investigating authority. one delegation highlighted that a guideline for the investigating authority to resort to the secondary sources would be useful and expressed readiness to work on this guideline. some delegates pointed out that they needed more clarification from the proponents about the purpose of this amendment. one delegate argued that the correctness of the information submitted in one of the secondary sources should be verified or confirmed from another independent secondary source, and if this information could not be verified or confirmed it should not be used. in terms of information submitted in the petition, all delegations stated that this information may be used as a secondary source, if necessary. in terms of giving examples for secondary sources in paragraph 7, nearly all delegates pointed out that it was useful but any list should not be exhaustive. one delegate argued that there is no need to cite the names of secondary sources.
the last point, in my consultations with delegates was �adverse facts available�. on this issue, two members indicated that there should be parallelism between the �facts available� annex of anti-dumping and the scm text. one of these members explained that the current language in paragraph 7 is vague about the application of adverse facts available where the member/parties fail to participate/cooperate; the last sentence should be more explicit in permitting an adverse inference.
the majority of the members claimed that the last sentence of paragraph 7 is well drafted to address �adverse facts available� so there is no need to work on it. some of these members also expressed that they do not resort to �adverse facts available� in either anti-dumping or countervailing duty investigations.
when i was appointed as a friend of the chair on this issue, i assumed that it was an easy task. when i consulted with the delegations, i quickly realized that there was significant divergence among members especially between two groups of delegates: one supporting a simple, straightforward transposition of the anti-dumping annex as the best option, and the other having concerns over such simple transposition, considering that each element of the anti-dumping annex should be considered to determine its relevance in the cvd context, as well as necessary modifications for that context. i believe that these consultations have been an opportunity to identify these differences between ad and cvd. i consider that this will make our future work easier to reach a common basis on a possible annex of facts available in the scm text.
lastly mr. chairman,
i find it encouraging that all of the delegations show interest and take a constructive approach to discuss the proposals.
i would like to thank to you chair for giving me opportunity to serve as a �friend of chair� on this issue and thank all of the delegations for their contribution and cooperation and their constructive work during the consultations we held.
thank you.
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