Anti-dumping Measures

Anti-dumping measures in Global Commerce Policy

In this regard, anti-dumping measures is: Article VI of the GATT 1994 permits the imposition of anti-dumping duties against dumped goods, if dumping causes material injury to producers of competing products in the importing country. This is known as causality. The WTO Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 (the Anti-dumping Agreement) lays down precise and transparent procedures for the adoption of anti-dumping measures. Some sophisticated methods have been developed to measure alleged differences in prices and to determine injury. The entries on trade policy are here. Anti-dumping measures may be instituted if the price charged to the importing country by a foreign firm is below normal value in its home country. Normal value is made up of fixed and variable costs of production, plus a range of other costs normally associated with production and trade. The entries on trade policy are here. If there are too few domestic sales, normal value is to be taken to be the highest comparable charge in third markets or the exporting firm ™s estimated costs of production plus a reasonable amount to cover other expenses, as well as imputed profits. The entries on trade policy are here. If there is no export price or if trade is between related parties and therefore considered unreliable as a price indicator, the export price may be constructed on the basis of what would have been charged to an independent buyer, or on some other reasonable basis. The scope for disputes about the right level of normal value is readily apparent. The concept of material injury to industries producing like products is equally fruitful of controversies. Neither the GATT nor the Anti-dumping Agreement define material injury, but the latter contains an illustrative list of factors to be taken into account in an assessment of whether material injury has occurred. The list, which is not considered exhaustive, includes actual and potential decline in sales, profits, output, market share, productivity, return on investments, or utilization of capacity; factors affecting domestic prices; the magnitude of the margin of dumping; actual and potential negative effects on cash flow, inventories, employment, wages, growth, ability to raise capital or investments. Much has been written about the meaning of like products , and whether it should be interpreted as the same product, a similar product or a different product put to the same use or achieving the same purpose. The Anti-dumping Agreement now leaves no doubt on this point. The like product must be identical, i.e. The entries on trade policy are here. Alike in all respects. The entries on trade policy are here. If there no such product, another may be chosen which, even though not alike in all respects, has characteristics closely resembling the product under consideration. The entries on trade policy are here. Anti-dumping measures may only be taken to the extent that they cover the margin of dumping, i.e. the difference between normal value and the price at the border in the importing country, adjusted for specified normal costs associated with international trade. The entries on trade policy are here. If the investigating authority finds that there has been dumping, the resulting protection for domestic industries on the basis of anti-dumping measures can therefore be quite limited. The entries on trade policy are here. It is not by any means automatic. The entries on trade policy in the Encyclopedia are here. Under the WTO rules, a good case for them has to be made, and there is provision for appeals by the affected parties. The Anti-dumping Agreement stresses that an application for the imposition of anti-dumping measures must include evidence of dumping, injury and a causal link between the two. The entries on trade policy are here. A simple assertion, unsubstantiated by relevant evidence, cannot be considered sufficient to meet the requirements. The entries on trade policy are here. An application has to be made by domestic industry. No action may be taken if it is supported by firms representing less than 25% of total production of the like product. The entries on trade policy in the Encyclopedia are here. Under the rule on de minimis dumping margins, no action may be taken if the margin of dumping is less than 2%. The entries on trade policy are here. Anti-dumping action remains controversial. The entries on trade policy are here. Affected firms and their home countries sometimes see them mainly as a means to restrain unwelcome imports. Doubtless, there is some truth in this. Some petitions are frivolous and nothing more than trade harassment. The entries on trade policy are here. As a form of contingent protection, they enable governments to influence the flow of imports. The entries on trade policy are here. Anti-dumping enquiries can serve, however, an important transparency purpose by demonstrating to the exporting country suspected of dumping what its real cost structure is, and to suggest alternative approaches to production and trade regimes which might reduce or eliminate the need for anti-dumping measures. The entries on trade policy are here. It is worth noting, too, as Gabrielle Marceau points out Anti-Dumping and Anti- Trust Issues in Free-Trade Areas, that dumping and anti-dumping laws are not just about price discrimination and predation. They are buffers  between national systems of competition. Hoekman, in Trade Laws and Institutions: Good Practices and the World Trade Organization, commenting on the detailed procedural requirements set out in the Anti- dumping Agreement, notes that this has become a lucrative area of specialization for the legal profession in territories that actively use anti- dumping measures. That said, all mechanisms enabling governments to influence the flow of imports create ill-will. The entries on trade policy are here. In the case of anti-dumping measures, exporters complain of their trade-restrictive impact, but industries in the importing country tend to see them as cumbersome and onerous means to fix urgent problems. The entries on trade policy are here. In some cases, a company asking for anti-dumping measures may at the same time be accused of dumping in another market. There will always be some contradictions inherent in the taking of anti-dumping measures. Today, there is a view among some trade policy makers that competition policy could be a better instrument to deal with dumping issues, but this supposes that all WTO members would be willing to pursue effective competition policies. The entries on trade policy in the Encyclopedia are here. Until this happens, the anti-dumping rules offer a transparent, if legalistic and sometimes flawed, mechanism to deal with some of the concerns raised by the trading community. The anti-dumping rules are to be clarified as part of the multilateral trade negotiations launched at Doha in November 2001. See also Agreement on Safeguards, analogue country, boomerang clause, competiti
on policy and anti-dumping measures, de minimis dumping margins, lesser duty principle, negligible imports and predatory pricing.[1]

Anti-dumping measures: Further Information

Please, see the legal dictionary.

Resources

Notes and References

1. Dictionary of Trade Policy, “Anti-dumping measures” entry (OAS)

See Also