Importance of Sunset Clause of the Anti-Dumping Agreement

Article 11.3 has been dubbed as the Sunset Clause of the Anti-Dumping Agreement. A Sunset Clause is a provision within a law or an agreement that provides that the said law shall cease to have effect after a specific date, unless further legislative action is taken to extend the law^[1]. Most of the international laws are devoid of Sunset Clause. However, the Anti-Dumping Agreement does contain such a clause. The exporters have benefitted immensely from the existence of such a provision^[2].

“Article 11.3 – Notwithstanding the provisions of paragraphs 1 and 2, any definitive anti-dumping duty shall be terminated on a date not later than five years from its imposition (or from the date of the most recent review under paragraph 2 if that review has covered both dumping and injury, or under this paragraph), unless the authorities determine, in a review initiated before that date on their own initiative or upon a duly substantiated request made by or on behalf of the domestic industry within a reasonable period of time prior to that date, that the expiry of the duty would be likely to lead to continuation or recurrence of dumping and injury. The duty may remain in force pending the outcome of such a review.”

Thus the antidumping order expires when the five year period has elapsed and only in exceptional circumstances can the duty be continued^[3]. However, this interpretation is not followed by countries like USA. There have been some cases where the antidumping duty lasted for more than 20 years^[4]. In order to remove the vagueness under Article 11.3 and making it more export neutral, various steps have been suggested during the negotiations at the Antidumping Committee of the WTO^[5]. Some of the steps are:

A. Every Sunset Review must be finished before the end of the five year period.

B. Every antidumping order must cease to have effect after the expiry of a reasonable number of years.

C. There must be a determination of whether or not there is a likelihood of recurrence of dumping.

D. The injury should be determined on exporter-to-exporter basis.

E. Suo Motu cognizance of a Sunset Review by the antidumping authority should be strictly prohibited.

International Trade Law Notes

---

[1] Olivier Cadot, Jaime de Melo and Bolormaa Tumurchudur, Anti-Dumping Sunset Reviews: The Uneven Reach of WTO Disciplines, Conference on Antidumping and Developing countries organized by the

World Bank and the Institut d’Etudes Politiques de Paris (Sciences Po) in Paris, December 15-16, 2006 (visited at http://federation.ens.fr/ydepot/semin/texte0708/CAD2007ANT.pdf ).

[2] An important case law to this effect is United States – Sunset Review of Anti-Dumping Duties on Corrosion-Resistant Carbon Steel Flat Products from Japan, WT/DS244/R (Aug. 14, 2003).

[3] Suhail Nathani, Recent Trends in Sunset Review Anti-Dumping Investigations, International Law Office Newsletter visited at http://www.internationallawoffice.com/newsletters/Detail.aspx?g=54332139-9aeb-4696-b9c5-b0781367b20f

[4] For more information, See Abhijit Das and Meghana Sharafudeen, Sunset Reviews: Important Provisions Made Irrelevant, Jindal Global Law Review, Volume 5, Issue 1, April 2014 visited at http://www.jgls.edu.in/JindalGlobalLawReview/pdf2/7.pdf

[5] Industrial Structure Council, Ministry of Economy. Trade and Industry, Japan, 2010 Report on Compliance by Major Trading Partners with Trade Agreements - WTO, FTAs/EPAs and BITs (2010)