Page 599 - MANUAL OF SOP

Manual of OP for Trade Remedy Investigations

"[t]he text of Article 2.1 expressly imposes four conditions on sales
transactions in order that they may be used to calculate normal value:-
(i) the sale must be "in the ordinary course of trade";

(ii) it must be of the "like product";
(iii) the product must be "destined for consumption in the exporting
country"; and,
(iv) the price must be "comparable".

24.53. In a WTO dispute US – Oil Country Tubular Goods Sunset Reviews (Article
21.5 - Argentina) (DS-268), the Panel interpreted Article 2.1 of the Anti-Dumping
Agreement.

"As Article 2.1 makes clear, the starting point for normal value is 'the
comparable price, in the ordinary course of trade' for the like product when
destined for consumption in the exporting country. Thus, the concept of
dumping is, in the first instance, a comparison of home market and export
prices. Only in the circumstances set forth in Article 2.2 may an investigating
authority look to alternative bases to home market prices, such as costs,
when determining normal value.”
24.54. In a WTO Dispute US – Hot-Rolled Steel (DS184), the Appellate Body
interpreted Article 2.1 of the Anti-Dumping Agreement.

“Article 2.1 requires investigating authorities to exclude sales not made ‘in
the ordinary course of trade’, from the calculation of normal value, precisely
to ensure that normal value is, indeed, the ‘normal’ price of the like product,
in the home market of the exporter. However, where the exclusion of such
below-cost sales results in a level of sales that is too low to permit a proper
comparison with export price, an alternative method of calculation may be
used”.
24.55. In a WTO Dispute US – Hot-Rolled Steel (DS-184), the US authorities, in
calculating the normal value, discarded certain sales by exporters to their affiliates
because these sales were not "in the ordinary course of trade", and replaced the
discarded sales with downstream sales of the product, transacted between the
affiliate and the first independent buyer, which had been made "in the ordinary
course of trade". Japan objected to the use of these sales in calculating the normal
value, arguing that it is implicit in Article 2.1 that a sales transaction may only be

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