Chapter 3 sets out the laws that specifically apply to Serious Prejudice under the Subsidies and Countervailing Measures Agreement (Articles 5 and 6.3 of the SCM Agreement). The chapter considers the nature of the market phenomena in relation to a finding of serious prejudice before turning to discuss how the legal requirements concerning causation have been interpreted in the jurisprudence. Specifically, the chapter demonstrates how some interpretations in the jurisprudence reflect a flawed conception of causation. Chapter 3 then turns, finally, to consider how the legal requirements might better be interpreted to reflect a more coherent approach to causation by using the Tripartite Non-attribution/Causal Link Approach. It then sets out how the Tripartite Non-attribution/Causal Link Approach could be applied in practice to make causal determinations for the purposes of Serious Prejudice claims.

A determination of injury for 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.