THIRD PARTY WRITTEN SUBMISSION OF JAPAN

G. THIRD PARTY WRITTEN SUBMISSION OF JAPAN

  5.79 The following summarizes Japan's arguments in its third party written submission.

1. Introduction

  5.80 Japan welcomes this opportunity to present its views in the proceeding brought by Indonesia over the consistency with Article VI of the GATT, the Agreement, and the Marrakesh Agreement establishing the World Trade Organization ("WTO Agreement") of the anti-dumping measures imposed by Korea on imports of certain paper from Indonesia.

  5.81 Japan has a systemic interest in the interpretation and application of the Agreement, the GATT and the WTO Agreement with regard to anti-dumping investigations. As a third party, Japan would like to address the issue of the interpretation and application of the terms “product under consideration” and “like product” under Article 2.6 of the Agreement in conjunction with Articles 2.1 and 3.1 thereof.

2. Arguments

  5.82 Under the Agreement, an antidumping duty investigation can begin only after the “product under consideration” has been defined. The Panel in US—Softwood Lumber noted that:

  As the definition of “like product” implies a comparison with another product, it seems clear to us that the starting point can only be the “other product”, being the allegedly dumped product. Therefore, once the product under consideration is defined, the “like product” to the product under consideration has to be determined

  on the basis of Article 2.6. 71

  5.83 As noted by the Panel in US—Softwood Lumber, the definition of the “product under 5.83 As noted by the Panel in US—Softwood Lumber, the definition of the “product under

  For the purpose of this Agreement, a product is to be considered as being dumped,

  i.e. introduced into the commerce of another country at less than its normal value, if the export price of the product exported from one country to another is lower than the comparable price, in the ordinary course of trade, for the like product when destined for consumption in the exporting country. (Emphasis added.)

  5.84 The Appellate Body in US – Softwood Lumber stated: “It is clear from the texts of these provisions (Article VI:1 of the GATT and Article 2.1 of the Agreement) that dumping is defined in relation to a product as a whole as defined by the investigating authority.” 72

  5.85 The assessment of injury also begins with consideration of the “product under consideration.” Article 3.1 sets forth:

  A determination of injury for the purposes of Article VI of GATT 1994 shall be based on positive evidence and involve an objective examination of both (a) the volume of the dumped imports and the effect of the dumped imports on prices in the domestic market for like products, and (b) the consequent impact of these imports on domestic producers of such products. (emphasis added).

  5.86 Whether an import is “dumped” is determined in accordance with Article 2.1, which, as discussed above, requires the authorities to determine dumping with respect to the product under consideration. In this way, the definition of the “product under consideration” is the starting point of the injury determination.

  5.87 In light of the fundamental importance of the term “product under consideration”, as demonstrated above, particular care should be paid to ensure that the particular “product under consideration” in an antidumping duty investigation is properly defined.

  5.88 As noted in Korea’s First Written Submission, the Panel in US—Softwood Lumber offered some clarification on the meaning of “product under consideration”: “in our analysis of the AD Agreement, we could not find any guidance on the way in which the ‘product under consideration’

  should be determined.” 73 Japan believes that the Panel’s analysis of “product under consideration” is incomplete. It is true that the Agreement on its face offers no additional clarification or definition of

  the “product under consideration.” However, since the Agreement does not provide specific additional clarification, it is a basic tenet of treaty interpretation to interpret terms in accordance with

  their ordinary meaning, as required in Article 31 of the Vienna Convention on the Law of Treaties. 74

  5.89 The ordinary meaning of the word “product” is “an article or substance manufactured or refined for sale; a substance produced during a natural, chemical, or manufacturing process; or a

  result of an action or process.” 75 The ordinary meaning of the word “product” therefore is a single article or substance, as opposed to a collection of distinct articles or substance. The interpretation of

  the meaning of “product under consideration” for the purposes of the Agreement must follow this ordinary meaning of the word “product.” It should also be noted that the Agreement, as specifically

  72 Appellate Body Report, United States—Final Dumping Determination on Softwood Lumber from Canada, WTDS264ABR, adopted on 31 August 2004, para. 93 (emphasis added).

  set forth in Article 2.1, contemplates defining “a product” under consideration, not “products” under consideration.

  5.90 The term “product under consideration” thus prevents an anti-dumping investigation from capturing two separate products. While Japan has no objection to conduct two separate anti-dumping investigations on separate products simultaneously, Japan believes that determination of dumping and injury combining separate products into one “product under consideration” is not permitted. When the scope of the investigation includes two of more clearly distinct products, the investigating authorities should make separate determinations of dumping and injury for each such product. If the authorities determine either dumping or injury combining two separate products, the authorities act inconsistently with Article 2 or 3 of the Agreement, and also would act inconsistently with Article 2.6 when defining the scope of the “like product.”

  5.91 In this case, Indonesia argues that “PPC” (plain paper copier) and “WF” (woodfree printing paper) are two distinguishable products. 76 Japan does not take any specific position on the factual

  aspect of this issue. If, however, PPC and WF are distinct products, Korea should have separately considered (1) the effect of Indonesian PPC imports on Korean PPC producers and (2) the effect of Indonesian WF imports on Korean WF producers to determine dumping and injury. Therefore, Japan requests that the Panel first complete the analysis of the meaning of the “product under consideration,” then review whether Korea properly defined the “product under consideration” and the “like product” in the instant dispute, and review whether Korea properly made determinations of dumping and injury for PPC and WF separately if the Panel finds that these are distinct products.