WTO Agreement and Anti Dumping Duty with special reference to Indian scenario

SYNOPSIS If a company exports a product at a price lower than the price it normally charges on its own home market, it is said to be dumping the product. Many governments take action against dumping in order to defend their domestic industries. The WTO agreement does not pass judgement on the action that has been taken by the governments. Its focus is on how governments can or cannot react to dumping it disciplines anti-dumping actions, and it is often called the Anti-Dumping Agreement. DEFINITIONS The legal definitions are more precise, but broadly speaking the WTO agreement allows governments to act against dumping where there is genuine and material injury to the competing domestic industry. In order to do that the government has to be able to show that dumping is taking place, calculate the extent of dumping (how much lower the export price is compared to the exporters home market price), and show that the dumping is causing injury or threatening to do so. GATT GATT (Article 6) allows countries to take action against dumping. The AntiDumping Agreement clarifies and expands Article 6, and the two operate together. They allow countries to act in a way that would normally break the GATT principles of binding a tariff and not discriminating between trading partners typically anti-dumping action means charging extra import duty on the particular product from the particular exporting country in order to bring its price closer to the normal value or to remove the injury to domestic industry in the importing country.

WTO Agreement and Anti Dumping Duty with special reference to Indian scenario

CALCULATION OF DUMPING There are many different ways of calculating whether a particular product is being dumped heavily or only lightly. The agreement narrows down the range of possible options. It provides three methods to calculate a products normal value. The main one is based on the price in the exporters domestic market. When this cannot be used, two alternatives are available the price charged by the exporter in another country, or a calculation based on the combination of the exporters production costs, other expenses and normal profit margins. And the agreement also specifies how a fair comparison can be made between the export price and what would be a normal price. INVESTIGATION OF ANTI DUMPING Calculating the extent of dumping on a product is not enough. Anti-dumping measures can only be applied if the dumping is hurting the industry in the importing country. Therefore, a detailed investigation has to be conducted according to specified rules first. The investigation must evaluate all relevant economic factors that have a bearing on the state of the industry in question. If the investigation shows dumping is taking place and domestic industry is being hurt, the exporting company can undertake to raise its price to an agreed level in order to avoid anti-dumping import duty. PROCEDURE: Detailed procedures are set out on how anti-dumping cases are to be initiated, how the investigations are to be conducted, and the conditions for ensuring that all interested parties are given an opportunity to present evidence. Anti-dumping measures must expire five years after the date of imposition, unless an investigation shows that ending the measure would lead to injury. WTO AND ANTI DUMPING
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WTO Agreement and Anti Dumping Duty with special reference to Indian scenario

Anti-dumping investigations are to end immediately in cases where the authorities determine that the margin of dumping is insignificantly small (defined as less than 2% of the export price of the product). Other conditions are also set. For example, the investigations also have to end if the volume of dumped imports is negligible (i.e. if the volume from one country is less than 3% of total imports of that product although investigations can proceed if several countries, each supplying less than 3% of the imports, together account for 7% or more of total imports). The agreement says member countries must inform the Committee on AntiDumping Practices about all preliminary and final anti-dumping actions, promptly and in detail. They must also report on all investigations twice a year. When differences arise, members are encouraged to consult each other. They can also use the WTOs dispute settlement procedure. Anti Dumping Duty in India Where any article is exported from any country or territory to India at less than its normal value then upon the importation of such article to India the central Govt. may be notification in the official gazette impose an Anti dumping duty not exceeding the margin of dumping in relation to such article Anti dumping and Anti subsidies & countervailing measures in India are administered by the Directorate General of Anti dumping and Allied Duties (DGAD) functioning in the Dept. of Commerce in the Ministry of Commerce and Industry and the same is headed by the "Designated Authority". The Designated Authoritys function, however, is only to conduct the anti dumping/anti subsidy & countervailing duty investigation and make recommendation to the Government for imposition of anti dumping or anti subsidy measures. Such duty is finally imposed/levied by a Notification of the

WTO Agreement and Anti Dumping Duty with special reference to Indian scenario

Ministry of Finance. Thus, while the Department of Commerce recommends the Anti-dumping duty, it is the Ministry of Finance, which levies such duty. Safeguard measures Safeguard measures are administered by another Authority namely, Director General (Safeguard), which functions under the Dept. of Revenue, Ministry of Finance. The Standing Board of Safeguards (chaired by the Commerce Secretary) considers the recommendations of the DG (Safeguards) and then recommends the impositions of the Safeguard Duty as it deems fit, to the Ministry of Finance which levies the duty. RELATED STATUTES AND AGREEMENTS 1. Customs Act, 1962 2. Customs (Tariff) Act, 1975 3. Customs Tariff (Identification, Assessment and Collection of Anti-dumping Duty on dumped articles and for determination of Injury) Rules, 1995 4. Central Boards of Revenue Act, 1963 5. Customs Tariff ( Identification, Assessment & Collection of Anti-Dumping Duty on Dumped Articles and for Determination of Injury ) Rules, 1995 6. General Agreement on Tariffs & Trade ( GATT1947 ) 7. Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994