Anti Dumping 1

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Improving Africas Position in the International Trading SystemTunis, Tunisia, Nov 28 Dec 2, 2005

Agreement on Anti-dumping

By

Omu [email protected] or [email protected]


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S ession 4-2 Africa in the International

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OUTLINE OF PRE S ENTATIONIntroduction/Definitions/Agreement

Background to contentious issuesS cope of mandate for negotiations under DDAThe July packageS pecial & Differential Treatment


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Background to issuesUruguay round + & single undertaking =accept whole package & opting out is outi.e., broader agenda + single undertaking =members gave up one form of flexibilityfear to encounter adjustment problemspossibility to react ex post necessary e.g., to

problems caused by unforeseen import surges


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Background to issues (cont)Without flexibility to act ex post membersreluctant to liberalizeAdditional flexibility for DevelopingCountries & LDCs extended implementation periods

technical assistance


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Background to issues (cont)Rationale for S DT weakness in institutional capacity cost of adjustments

imposed by new disciplines

Discussion leads us to trade remedies


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TRADE REMEDIE S

Three Types of Contingent Trade Remedies Anti-dumping Countervailing S afeguards


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ANTI-DUMPING AGREEMENT

ADA allows countries to impose anti-dumping duties to protect their producersfrom injury caused by imports of dumpedgoods


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WH AT IS DUMPING?When an exporter sells a product to theimporting country at a lower price than the

price at which the same (or similar) productis sold on its own domestic market Domestic price of exporter > export price

Dumping = price discrimination betweennational markets


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ANTI-DUMPING ISS

UES

What is wrong with Dumping?Can cause injury to local industryunfair trade practice

What is wrong with Anti-Dumping?Methodologies for calculating margins

sale of like products in ordinary course of tradecomparison of export price to normal value etc.(see below)

Effectiveness of Anti-Dumping Ordersintl distributors can easily source from other country (notMFN)


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ANTI-DUMPING MEA S URE S

Measures Import Restrictions Temporary protection of particular industries


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THE AGREEMENT

Legal Basis for Anti-Dumping Actions Article VI of GATT 1994 Agreement on Implementation of Article VI of

GATT 1994 (Anti-Dumping Agreement)


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DDA & July PackagePlaces needs and interests of Developingand Least Developed Countries at the heartof the negotiationsS pecifics discussed in the different

presentations during this seminar


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ANTI-DUMPING

Substantive Elements Dumping Injury

Causal link betweeninjury and dumping

Normal ValueLike Product?Determine the LikeProduct Compare the following

aspectsRaw material usedManufacturing processTariff classificationConsumer preference andend-useQuality


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ANTI-DUMPING

Export price to thirdcountry Use a comparable price of

the like product whenexported to an appropriatethird country, provided thatthis price is representative

Constructed value Cost of production in

country of origin andreasonable amount for administrative, selling andgeneral goods and for profits

Comparison of Domestic Price toExport Price The comparison must be made at the

same level of trade, normally at theex-factory level, and in respect of sales made as nearly as possible at

the same time Due allowance must be made for

differences which affect pricecomparability, including differencesin:

Conditions and terms of saleTaxation

QuantitiesPhysical characteristicsLevels of tradeAny other differences which aredemonstrated to affect pricecomparability


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ANTI-DUMPING

General Principles forComputing the Margin of Dumping

Modalities of DutiesAd valorem duties 20%ad valorem

S pecific duties U S$ 10 per kilogramVariable duty NV (POI)-export price of shipment


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ANTI-DUMPINGMeaning of Injury

Three meanings: Material injury to domestic

industry (current or present

injury) Threat of material injury todomestic industry (futureinjury)

Material retardation of theestablishment of a domesticindustry

Basic Principles for theDetermination of Injury The determination of injury must be

based on positive evidence andinvolve an objective examination of:

The volume of the dumped importsThe effect of the dumped imports on

prices in the domestic market for thelike productsThe consequent impact of theseimports on domestic producers of like products


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ANTI-DUMPINGPrice Effect of DumpedImports Price undercutting Price depression

Price suppressionImpact of Dumped Imports onDomestic Producers

Article 3.4 Injury Factors Actual and potential decline in sales,

productivity, profits, return oninvestment, output, and market share

Factors affecting domestic prices

The magnitude of the margin of dumping

Actual and potential negative effects


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ANTI-DUMPINGCausality Article 3.5

Illustrative list of potentialother factors

The volume and price of

imported goods Contraction in demand Respective trade practices of

and competition betweenforeign and domestic

producers Developments in technology Export performance and

productivity of domestic producers

Shall not attribute theinjuries caused by such otherfactors to the dumpedimports

Threat of Injury S ignificant rate of increase of

dumped imports indicated thelikelihood of substantially increasedimportation

Sufficient freely disposable, or animminent substantial increase in thecapacity of the exporter

Whether imports are entering at prices that will have a significantdepressing/suppressing effect ondomestic prices, and would likely

increase demand for further imports Inventories of the exporter/importer


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ANTI-DUMPINGDetermination of MaterialRetardation

The Agreement does notprovide any guidance

regarding the determination of material retardation

Procedural Aspects of an Anti-Dumping Investigation Format of Investigation

InitiationInformation gathering

Preliminary determinationFurther investigation

Response to preliminarydetermination

Verification of informationFinal determination


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Conditions for Application of ProvisionalMeasures

Provisional measures may be applied if an investigation has been initiated (in accordancewith the provisions of Article 5), a public notice has

been given to that effect, and the parties have beengiven opportunities to submit information andcomments

a preliminary affirmative determination has beenmade of dumping and consequent injury to adomestic industry

it is judged that such measures are necessary to prevent injury being caused during the investigation


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Forms of Provisional Measures

The amount of the duty may not be greater thanthe margin of dumping provisionally estimated

The security should be equal to the amount of the provisional duty

Provisional measures may take the form of a

provisional duty or, preferably, a security (bycash deposit or bond)


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Provisional Measures & Final Duty

Duration of Provisional Measures

The general rule is that provisionalmeasures should be applied for as

short a period as possible

Not more than 4 months or, bydecision of the authorities uponrequest by exporters representing asignificant percentage of the tradeinvolved, for a maximum of 6months

When the authorities examine

whether a duty lower than themargin of dumping would besufficient, these periods may be 6and 9 months, respectively(lesser duty considered )

Final DutyPublic Notice: S ufficient detail on findings and

conclusions reached on all issuesof fact and law

S pecifically:Names of suppliers/supplyingcountriesProduct descriptionMargin of dumpingConsiderations re: injury

Main reasons behinddetermination

If information not in notice to bemade available in a separate report


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ANTI-DUMPINGFinal Duty (2)

If final margins are de minimis -2% of export price - no duty

can be imposed

If the volume of dumped exportsfrom any given country isnegligible - 3% of imports of the subject product - no duty can

be imposed, unless all together these countries account for 7%

Duration of Final Duty

Only for as long as, and tothe extent necessary, tocounteract injurious practice

Not longer than five yearsafter imposition

Can be reviewed uponrequest after a reasonable

period or at own initiative of

authorities


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Review of Anti-Dumping Duties

Assessment of Review Review due to changed circumstances

RequestOwn initiative Dumping and/or injury

S unset reviewfive year termination New shipper review


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S pecial & Differential TreatmentArticle 15 recognize special situation of developing

countries Possibilities of constructive remedies provided

for by this Agreement shall be explored beforeapplying anti-dumping duties


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AFRICAN PO S ITION The Kigali Consensus

Introduction of more complex rules and

disciplines would be counterproductive andwill negatively affect African countriesrights under these agreements


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AFRICAN PO S ITION (cont)

The Cairo DeclarationAvoid introduction of more complex rules anddisciplines

Need to provide adequate technical assistance toAfrican countriesNeed to address development dimension of negotiationsClarification and improvement of disciplines and

proceduresA moratorium by developed countries oncontingency measures that include anti-dumpingactions against African LDCs exports


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Thank you very much

Anti Dumping 1

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