Anti-dumping

Anti-dumping actions

Introduction
- Economic rational of dumping: why "normal price" and "export price" differ?;
- Art. 6 of GATT authorizes an anti-dumping duty on non-MFN basis in excess of bound rates, in cases where (1) dumping causes or threatens material injury to an established domestic industry, or (2) materially retards the establishment of a domestic industry;
- Agreement on Anti-Dumping Practices: 1st in 1967, US not-signed, 2nd in 1980, huge step forward, but only 27 signatories.
The Uruguay Round Agreement

Agreement on Implementation of Article VI of the GATT 1994: Anti-dumping measures can be imposed if after investigation it was determined (a) that dumping is occurring, (b) that the domestic industry producing the like product in the importing country is suffering material injury, and (c) that there is a causal link between the two;
The Committee on Anti-Dumping Practices: review of national legislations notified to the WTO;
Dipute settlement: members may challenge the imposition of anti-dumping measures before DSB;
Compliance & Notifications: WTO Members are required to bring their legislation into conformity with the Agreement and to notify about anti-dumping investigations, and actions taken.

Normal value:
(1) price, in the ordinary course of trade, for consumption in the exporting country market;
(2) price in a third country;
(3) “constructed value”, which includes the cost of production, plus selling, general, and administrative expenses, and profits;
Price in the “ordinary course of trade”:
(1) prices should not be below per unit fixed and variable costs plus administrative, selling and general costs;
(2) sales must be made within an extended period of time, but in no case less than six months, and
(3) sales must be made in substantial quantities: home sales no less than 5% of export sales;

General rule: transaction price of exporting;
If the export is an internal transfer or barter or there is an association between the exporter and the importer, then "constructed export price" should be used calculated (1) on the basis of the price at which the imported products are first resold to an independent buyer or (2) on other reasonable basis.

Due allowances must be made for differences in conditions and terms of sale, taxation, quantities, physical characteristics;
Dumping margin: (1) waighted-average comparison of normal value and export prices or (2) a transaction-to-transaction comparison of normal value and export price;
The anti-dumping duty may not exceed the dumping margin;
Individual exporter dumping margins should be imposed if possible;

Like product: alike in all respects or has characteristics closely resembling those of the product under consideration;
Domestic industry: the domestic producers of the like products;
Injury: material injury to, threats of material injury to, material retardation of the establishment of a domestic industry;
Determination of injury: actual or potential declines in sales, profits, output, market share, productivity, return on investments, utilization of capacity, actual or potential effects on cash flow, inventories, employment, wages, growth, ability to raise capital or investments;
Causal link: injury caused by “other factors” (such as changes in the pattern of demand, and developments in technology) must not be attributed to dumped imports.

INVESTIGATION:
(1) Initiation: written request submitted “by or on behalf of" a domestic industry;
(2) Duration: normally within a year but no more than 18 months;
(3) Conduct: transparent;
Investigations are to end if margin of dumping is <2% of the export price or if the volume of dumped imports is <3% of total imports — although they can proceed if several countries, each supplying <3% of the imports, together account for 7% or more of total imports.
Provisional measures: up to 4 to 6 months;
Price undertakings: on voluntary basis;
Imposition of duties: no more than 5 years, unless an investigation shows that ending the measure would lead to injury.

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