LAW OF ANTI-DUMPING

By Manish Sharma

Scheme of Presentation
Background of Dumping Meaning of Dumping Need for Anti-dumping Duties

History of Anti-dumping Law

Agreement on Anti-dumping Ingredients of Anti-dumping Law Indian Law on Anti-dumping Doha Development Round Conclusion

Dumping
A response to unfair trade

Special protection
A strategic weapon

Kinds of Dumping
Sporadic Dumping 2. Intermittent Dumping 3. Persistent or Continuous Dumping
1. According to ADA

1. Price Dumping: selling at a lower price in a foreign market than in the home market 2. Cost dumping: selling below cost of production in an export market

Meaning of Dumping
Article IV of GATT

A product is said to be dumped when its export price is less than its normal value, that is less than the sale of a like product in the domestic market in the exporting country. Article 2.1 of ADA a product is to be considered as being dumped, i.e. introduced into the commerce of another country at less than its normal value, if the export price of the product exported from one country to another is less than the comparable price, in the ordinary course of trade, for the like product when destined for consumption in the exporting country.

Normal Value in the Exporting Market

Export Price

If normal value in the exporting country is not

available, then comparable price of the like product in third country or cost of production in country of origin plus administrative, selling, general costs and profit Difference between Normal Value and Export Price is known as Margin of dumping

 Dumping per se is not Actionable Article VI of GATT 1994

The contracting parties recognize that dumping, by which products of one country are introduced into the commerce of another country at less than the normal value of the products, is to be condemned if it causes or threatens material injury to an established industry in the territory of a contracting party or materially retards the establishment of a domestic industry.

Need for Antidumping Duties

To counter the dumping To counter the material injury caused by the

dumping To regulate the competition in international market To protect the domestic industries To make the revenue

History of Anti-dumping Law

First Anti-dumping Law was enacted in Canada in

1904 US enacted first AD law in 1916, amended in 1921 Both the legislations were the base of original GATT Article VI Code of Anti-dumping, Kennedy Round (1962-67) Tokyo Round (1973-79) Uruguay Round (1986-1994)

Anti-Dumping Agreement
Agreement on Implementation of Article VI of the

General Agreement on Tariffs and Trade 1994 Three Parts, 18 Articles, Two Annexes Part I Articles 1-15 Part II Articles 16-17 Part III Article 18 Annex I - Procedures for On-the-spot Investigations Annex II - use of best information available in cases where interested parties insufficiently cooperate in the investigation.

Ingredient of Anti-dumping
Dumping

Normal Value
Export Price Margin of Dumping

Like Product
Material Injury Casual Linkage between Dumping and Material

Injury (1, 5 and 6 are the evidences necessary in making the application, Article 5.2 of ADA)

Normal Value: Article - 2.1

The comparable price in the ordinary course of trade, for the like product when destined for consumption in the exporting country Normal Value Alternative Methods 1. Representative Export price to an appropriate third country 2. Cost of Production in the country of origin Plus Selling General and Administrative Charges and Profits
Note: footnote 2 to Article 2.2 of ADA says that the volume of sale in the domestic market must be 5%

Export Price - Article 2.3

If export price is not reliable, the export

price may be constructed on the basis of the price at which the imported products are first resold to an independent buyer, or
If the products are not resold to an

independent buyer or not resold in the condition as imported, on such reasonable basis as the authorities may

Margin of Dumping
Comparison Normal Value v/s Export Price
At the ex-factory level (Article 2.4) Wt. Av. NV with Wt Av. EP (Article 9.4) NV- EP on a transaction to transaction basis

(Article 6.10) Note: The margin of dumping is generally expressed as a percentage of the export price.

De Minimis Margins (Article 5.8)

Margin of Dumping (Exporter Specific)

Less than 2% of Export Price

Volume of Dumped Imports is negligible (Country

specific) Less than 3% from individual country, and cumulatively not more than 7%. (Application shall be rejected and investigation shall be terminated, if above conditions are fulfilled)

 Like Product: Article 2.6 of ADA

a product which is identical, i.e. alike in all respects to the product under consideration, or in the absence of such a product, another product which, although not alike in all respects, has

characteristics closely resembling product under consideration

of

the

 Material Injury: Article 3.1 of ADA

a determination of injury 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 Injury means material injury to a domestic industry, threat of material injury to a domestic industry or material retardation of the establishment of such an industry.

Duration of ADD (Art. 11)

5 years from the date of imposition or from the

date of the most recent review under paragraph 2 if that review has covered both dumping and injury,

Consequent Economic and Financial Impact

decline in output

loss of sales
loss of market share reduced profits

decline in productivity
decline in capacity utilization reduced return on investments

price effects
adverse effects on cash flow, inventories,

employment, wages, growth, investments, ability to raise capital, etc.

Indian Law on Anti-dumping

Customs Tariffs Act 1975, amended in 1995

Sections 9A, 9AA, 9B, 9C Customs Tariff (Identification, Assessment and Collection of Anti-dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995 Investigations and Recommendations by Designated Authority, Ministry of Commerce Imposition and Collection by Ministry of Finance

AD and DDR
"clarifying and improving disciplines"
Friends of Antidumping a group consisting

of the European Union, Brazil, Chile, China, Colombia, Costa Rica, Hong Kong, India, Israel, Japan, Korea, Mexico, Norway, Singapore, Switzerland, Thailand, and Turkey
Para 28 of Doha Declaration

Future Challenges
Zeroing

Discretion of the Designated Authorities

 Meaning of Dumping

Need for Anti-dumping Duties

History of Anti-dumping Law Agreement on Anti-dumping

Ingredients of Anti-dumping Law

Indian Law on Anti-dumping Doha Development Round

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