Law of Anti-dumping

7/28/2019 Law of Anti-dumping

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By

Manish Sharma

LAW OF ANTI-DUMPING


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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


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Dumping

A response to unfair trade

Special protection

A strategic weapon


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Kinds of Dumping

1. Sporadic Dumping

2. Intermittent Dumping

3. Persistent or Continuous Dumping

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 inan export market


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Meaning of Dumping

Article IV of GATTA 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 productexported 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.


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If normal value in the exporting country is not

available, then comparable price of the like

product in third country or cost of production incountry of origin plus administrative, selling,

general costs and profit

Difference between Normal Value and Export

Price is known as Margin of dumping

Normal Valuein the

Exporting

Market

Export

Price


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Dumpingper se is not Actionable

Article VI of GATT 1994

The contracting parties recognize that dumping,by which products ofone 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 materialinjury to an established industry in the territory of

a contracting party or materially retards the

establishment of a domestic industry.


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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


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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)


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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-spotInvestigations

Annex II - use of best information available in

cases where interested parties insufficiently

cooperate in the investigation.


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Ingredient of Anti-dumping

Dumping

Normal Value

Export Price Margin of Dumping

Like Product

Material Injury

Casual Linkage between Dumping and MaterialInjury

(1, 5 and 6 are the evidences necessary in making

the application, Article 5.2 of ADA)


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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 andProfits

Note: footnote 2 to Article 2.2 of ADA says that the

volume of sale in the domestic market must be 5%


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Export Price - Article 2.3

If export price is not reliable, the exportprice 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 anindependent buyer or not resold in the

condition as imported, on such

reasonable basis as the authorities may


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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.


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De Minim isMargins (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)


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Like Product:Article 2.6 of ADAa 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 of the

product under consideration


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Material Injury:Article 3.1 of ADA

a determination of injury shall be based onpositive 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 thedomestic market for like products, and

(b) The consequent impact of these imports on

domestic producers of such products

Injury means material injury to a domesticindustry, threat of material injury to a domestic

industry or material retardation of the

establishment of such an industry.


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Duration of ADD (Art. 11)

5 years from the date of imposition or from thedate of the most recent review under paragraph 2

if that review has covered both dumping and

injury,

onsequen conom c an nanc a


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onsequen conom c an nanc aImpact

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.


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Indian Law on Anti-dumping

Customs Tariffs Act 1975, amended in 1995Sections 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


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AD and DDR

"clarifying and improving disciplines"

Friends of Antidumping a group consistingof 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


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Future Challenges

Zeroing

Discretion of the Designated Authorities


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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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Law of Anti-dumping

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