“Antidumping law, as practiced today,
is a witches’ brew of the worst of policy
making: power politics, bad economics,
and shameful public administration”
Finger, J. Michael,
Editor, “Antidumping How It Works and Who
What is meant by DUMPING ?
How is dumping measured ?
The role of material injury and de-menimis in AD
The steps in an AD investigation and duty imposition
A brief history of AD
Various minuses of the AD measurement laws.
AD Duties and their IMPACT.
Increasing use of AD in WTO
Top 10 users of AD in the world.
Case study
And hence make u agree or disagree with Finger, J. Michael.
ADITI MALIK (01) ANKIT SHARMA (02) NAVJOT KAUR NAGRA (20) PRADEEP KUMAR (26) RISHABH SOOD (29) YOGESH SHARMA (37)
“Dumping is a situation of international price
discrimination, where the price of a product
when sold to the importing country is less than
the price of the same product when sold in the
As a short-term predatory pricing strategy to
drive competitors out of the market
As a result of market intervention or state
subsidies that enable companies to artificially lower their prices
When the price causes or threatens to cause
material injury to the domestic industry of the importing country can there be an action
against dumping.
An anti-dumping investigation can be started
only if there is a written complaint on behalf of the domestic industry.(a significant share of the domestic producers have to support the
Normal Value: The comparable price at which
the goods under complaint are sold in the domestic market of the exporting country. Can be determined by:
• domestic sales
• comparable representative export price to an
appropriate third country.
• constructed normal value, i.e. the cost of production
in the country of origin with reasonable addition for administrative, selling and general costs and reasonable profits.
Export price: The price at which it is exported
to the importing country.
Dumping Margin: The margin of dumping is
the difference between the Normal value and the export price of the goods under
complaint. It is generally expressed as a percentage of the export price.
Exporters Price Normal Value
Compare Exporter Price to Normal Value Normal Value $110.00 Exporter Price $90.00 Difference Attributable to Dumping $20.00 Difference Attributable to Dumping/exporter price $20.00 / $90.00=22.22% Dumping Margin =
fundamental parameters are determined.
a) Normal domestic selling price of the product
or similar products in the exporting country.
b) Export price being offered in the importing country.
Both these elements have to be compared at the same level of trade, generally at
Domestic price of exporter > export
price
Dumping = price discrimination
Injury parameters include factors such as:
o Actual or potential decline in sales o Loss of profits
o Market share
o Capacity utilization o Employment
o Wages
o Ability to raise capital o Lost contracts
NIP is that level of price, which the industry
is, expected to have charged under normal circumstances in the exporter market during the period defined.
The Injury Margin is the difference between
the Non-Injurious Price due to the Domestic Industry and the Landed Value of the dumped imports.
Anti-dumping
Based on article VI of GATT, 1994
Customs tariff act, 1975 sec 9A, 9B (as
amended in 1995)
Investigations by designated authority,
Ministry of Commerce
Imposition and collection by Ministry of
Export price and normal value must be
compared at he same level of trade, such as at the ex-factory level
allowance made for differences that effect
price comparability. These are
Physical characteristics
Taxation
Quantities etc..
In the 19th century European Sugar Industries
appealed to their respective governments for
protection against sugar being dumped at unfairly low prices.
In 1902, there was a formal agreement on
anti-dumping. Canada adopted the first anti-dumping law in 1904 followed by the European countries and then the US in 1916.
Formed the basis for the original GATT article
Subsequently, codes on anti dumping were
developed during the Kennedy Round (1962-67) and Tokyo Round (1973-79).
However, these were not binding on all GATT
members; they were open to signature by those countries that wished to do so.
But the Uruguay Round, (1986-94) anti-dumping
agreement is an agreement binding on all GATT or WTO members.
It is a measure to rectify the situation arising
out of the dumping of goods and its trade distortive effect.
Re-establish fair trade.
The use of anti dumping measure as an
instrument of fair competition is permitted by the WTO.
It provides relief to the domestic industry
ANTIDUMPING DUTY
To guard against unfair
trade practices
trade remedial measures. not necessary in the nature levied against exporter /
country in as much as they are country specific and exporter specific.
NORMAL CUSTOMS DUTY
means of raising revenue
and for overall
development of the economy.
trade and fiscal policies of
the Government
Necessary in nature
universally applicable to all
imports irrespective of the country of origin and the exporter.
If there is dumping but no injury then no duty
can be imposed.
Duty remains in force for 5 years.
Re-determination at a “sunset review”.
Yearly administrative reviews if requested by
Sufficient evidence to the effect that ;
there is dumping
there is injury to the domestic industry; and
there is a causal link between the dumping
and the injury, that is to say, that the dumped imports have caused the alleged injury.
No anti dumping duty shall be recommended
without a finding of this causal relationship. That is to say,
Dumping should lead to Injury
The causal link is to be established generally
in terms of the following effects of dumped imports on domestic industry: -
volume effect
The volume effect of dumping relates to the
market share of the domestic industry.
for price effect, significant price under cutting
by the dumped imports as compared with the price of the like product in the importer country.
Against Consumers Exporters Economists Regional Agreements (NAFTA) In Favour Importing country currently protected industries
Importing country Labor
anti dumping duty imposed against that
countries, which could go up to the dumping margin.
may terminate investigation if the exporter
concerned furnished an undertaking to revise his price
Any exporter whose margin of dumping is less
than 2% of the export price shall be excluded
Investigation is terminated if the volume of the
dumped imports from a particular country accounts for less than 3% of the total imports of the like product.
The cumulative imports of the like product from
all these countries who individually account for less than 3%, should not exceed 7% of the import of the like product.
Rule 5(4) of the Anti Dumping Rules provides
for suo-motu initiation of anti dumping
proceedings by the Designated Authority.
The Authority can initiate the anti dumping
investigation on its own without any complaint/petition filed in this regard
Should not be less than six months and not
more than eighteen months.
The most desirable period of investigation is
a financial year. (period should be as representative a possible)
For the purposes of injury analysis, the
domestic industry has to furnish the relevant data for the past three years.
Lodging of complaint Initiation Analysis of complaint Preparation and sending of questionnaires Analysis of questionnaire responses On-spot verification visits Internal decision + consultation of MS + translation Imposition of provisional measures if warranted and disclosure of decision to interested parties Sending of questionnaires Analysis of disclosure reactions Additional on-spot verification visits if needed Internal decision + consultation of MS + translation Imposition of definitive measures Final disclosure to interested parties Measures normally 45 days 9 months AD 6 months AS 4 months Measures are Total Duration
The application is scrutinized to ensure that it is fully
documented
provides sufficient evidence for initiating an
investigation.
If evidence not adequate, then a deficiency letter is
issued.
Till then cannot be considered as application
Designated Authority determines that the
application has been made by or on behalf of the Domestic Industry.
It also examines the accuracy and adequacy of
the evidence provided
The Initiation notice will be issued normally
within 5 days from the date of receipt of a properly documented application.
C. Access to Information:
The Authority provides access to the
non-confidential evidence
available for inspection to all interested parties
on request after receipt of the responses.
D. Preliminary Findings:
The Designated Authority will proceed
expeditiously with the conduct of the investigation
It makes a preliminary finding containing the
detailed information on the main reasons behind the determination.
33 Group 3 SIIB AB
E.
E. Provisional Duty:
A provisional duty not exceeding the margin of
dumping may be imposed by the Central Government on the basis of the preliminary finding
Can be imposed only after the expiry of 60 days
from the date of initiation of investigation.
The provisional duty will remain in force only for
a period not exceeding 6 months, extendable to 9 months under certain circumstances.
F.
F. Oral Evidence
Interested parties can request the Designated
Authority for an opportunity to present the relevant information orally.
Such information shall be taken into
consideration only when it is subsequently reproduced in writing.
G. Disclosure of information:
Based on these submissions and evidence
gathered the Authority will determine the basis of its final findings.
the Designated Authority will inform all
interested parties of the essential facts, which form the basis for its decision before the final finding is made.
H. Final Determination:
The interested parties submit their response
to the disclosure and
The Authority examines these final
submissions of the parties and comes out with final findings.
36 Group 3 SIIB AB
Anti-dumping measures taken by WTO
members have increased from 129 in 1994 to 208 in 2008; 83%.
New users: Argentina, India, Brazil, South Africa.
Traditional users: Canada, U.S., European
Union, Australia, Mexico.
Most affected industries: Metal, Chemical,
plastic, textiles, machinery and equipment, agriculture and food.
39% 13% 11% 9% 7% 4% 17%
METAL CHEMICAL PLASTIC TEXTILES M&E A&F OTHER
0 20 40 60 80 100 120 140 160 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Developing Countries Use Antidumping more
MEASURES:1 900 Developing 75% Developed 25% Developing 80% Developing 75% Developed 25% Developed Total 500 Total 1 400
Source: WTO Secretariat, Rules Division
218 181 173 150 139 116 79 77 44 43 EC US India S Afr Argent Austr Brazil Canada Mexico Korea Total 1 529
284 192 144 127 89 80 73 65 55 Inda US EC China Turkey Argent Austr Canada Brazil Total 1 516
Countervailing Measures 11 Safeguards 11 Anti-Dumping 33 Total 55
Pros
Prevents Monopolies Protects Vulnerable
Industries
Allows Firms to Compete Preserves Jobs
Cons
Against Free Trade Concept Trade Barrier – Lowers
Economic Growth
Distorts the Market Protects Firms from
Competition
Proportion of AD cases initiated by the countries 0 0.05 0.1 0.15 0.2 0.25 0.3 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
1 2 5 2 5 2 6 2 2 6 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Total 33
Unclear concept of “ordinary course of
trade”.
For computation of the normal value
complicated cost calculations and allocations
Arbitrariness steps in especially when there is
a conflict between accounting practices in the exporting country and the importing country.
This is so because investigating authorities
typically follow accounting practices of the importing country
Business Standard - 15 December, 2009
India to impose antidumping duties on some
equipment imported from China.
Chinese companies entered the Indian
telecom market, offering products and
services at prices about a third cheaper than that of global competitors.
Fibrehome Telecommunication Technologies
Ltd. will have to pay a duty of 236%, Alcatel-Lucent Shanghai Bell Co. 29% and Israel's ECI Telecom Ltd. 93% on equipment imported
The Indian Shrimp
Industry Organizes to
Fight the Threat of
Anti-Dumping Action
(CASE STUDY)
The Ad Hoc Shrimp Trade Action Committee
(ASTAC), an association of shrimp farmers in
eight southern states of the United States,
filed an anti-dumping petition against six countries — Brazil, China, Ecuador, India, Thailand and Vietnam.
The petition alleged that these countries had
on 21 January 2004 the US Department of
Commerce (DOC) announced the initiation of
anti-dumping investigations against the six countries.
The Department notified the International Trade
Commission (ITC) of its decision on initiation.
On 17 February 2004 the International Trade
Commission announced its decision that there was a reasonable indication that the US shrimp industry was affected due to Anti-dumping.
The Department of Commerce continued
with its investigations and gave its
preliminary determination on 28 July 2004.
The ratio of preliminary duty varies between
The weighted average rate for India is 14.2%,
The average rate for
▪ China is 49.09%,
▪ Brazil 36.91%,
▪ Vietnam 16.01%,
▪ Ecuador 7.3%
On 26 February 2002, Reggie Dupre, a
Louisiana state senator, alleged that tainted
farm-raised Asian shrimp was being diverted
Vietnam, one of the countries identified
almost at the beginning of the SSA(South America Shrimp Association) exercises and also highly dependent on the US market for
shrimp exports, was the first to protest.
Foreign Ministry spokeperson Phan Thuy
Thanh said in a statement on 12 September
2002 that ‘I can say with certainty that
Rokhmin Dahiri, the Indonesian Maritime and
Fisheries Minister, denied allegations that the Indonesian government subsidized its shrimp farmers.
He said that the price of shrimp on the domestic
market was much lower than the export price.
“The dumping charge was baseless and,
therefore, the United States should exclude Indonesia from the proposed anti-dumping investigations. ”
The Indian government and the Indian shrimp
industry were aware of the threat.
Arun Jaitley, the then Minister for Commerce,
made a statement in June 2003 after his official visit to the United States: ‘We are anticipating an action against our shrimp exports because our
The six named countries accounted for 74% of shrimp
imports in the US market.
Imports from the six countries increased from 466 million
lbs. in 2000 to 650 million lbs in 2002.
Import prices of the targeted countries had dropped by 28%
in the previous three years.
The average unit value of the targeted countries in 2000 was
$3.54; this had fallen to $2.55 in 2002, on a headless, shell-on equivalent basis.
The average dockside price for one count size of gulf
shrimp dropped from $6.08 to $3.30 per pound from 2000 to 2002.
The United States was the most open market in the world. High tariff rates in other large importing countries
provided a powerful incentive for exporters to increase shrimp shipments to the United States.
The anti-dumping investigations against Indian shrimp
imports might be initiated was hinted at during bilateral talks when the then Commerce and Industry Minister Arun Jaitley had met his counterpart in Washington at that time.
The reason given was that India’s shrimp exports to the
United States had been rising rapidly during the previous three years, from $255.93 million during 2000-1 to $299.05
The United States, traditionally a buyer of
small-sized shrimp from India, has now
started buying many other varieties,
including black tiger shrimp, resulting in its
occupying the top slot in India’s export
markets of marine products, replacing Japan in 2002-3.
Commerce Minister on the possible threat to
Indian shrimp exports to the United States, SEAI(Seafood Exporters Association of India (Kochi, Kerala, India). and MPEDA(The
Marine Products Export Development Authority) went into action.
The SEAI (Sea food export Association of
India) has estimated a total budgetary
requirement of Rs. 70 million to fight the
case. Of this, SEAI would mobilize Rs. 40
million internally and the remaining Rs 30
million would be collected from its members, depending on the volume and value of their individual exports to the US market.
First, there are specific variations between
the shrimp caught off the south-west coast of the United States and in Indian waters, so
that prices are bound to be different.
India’s shrimp exports are predominantly of
black tiger and scampi varieties which are not cultivated in the United States’, according to the president of SEAI.
Second, while fishing in the United States is a
capital-intensive activity calling for major
investment, in India shrimp capture is carried
out with a very low level of capital and
requiring hardly any investment.
This makes the cost of production
considerably lower in India compared with that for shrimp sea-caught off the US coast.
Department of Commerce observed that
India had a strong case as India was exporting mainly ‘tiger shrimps which are not found
there and that too, in unprocessed form’.
Noting that 80% of shrimp consumption in
Shrimp exports to the United States had
come almost to a standstill due to the
uncertainty regarding the contingent
applicability and incidence of the anti-dumping duty.
In 1976 US banned shrimps ,It was on the ground
that trawling for shrimp by mechanized means had been adversely affecting certain varieties of sea turtles.
The WTO ruled against the United States and asked
it to make the regime WTO-compatible.
However, since that had not yet happened, India’s
exports to the United States of aqua-culture shrimp and shrimp caught by non-mechanized means were being made on the basis of certification by the
Several visits by the representatives of those
two bodies to Washington at critical points
also helped to bring an understanding of the nature of the problem and how to face it.
This resulted in the selection and appointment
The speedy resolution of the issue of
financing helped Indian case.
The shrimp industry in India shouldn’t have
been focused on only one or two major
markets for growth.
Previously it was Japan and during the last
India learnt the importance of diversification.
A. J. Tharakan, the SEAI president, has said
that they are exploring alternative markets to
make up for the loss of the lucrative US market.
‘But it will be a long drawn-out process. It is not easy
“
On 27 th Jan exports to US
were resumed
.”
Business line newspaper– 1
stFeb,
2010
Websites www.google.com www.e-businessline.com exim.indiamart.com commerce.nic.in/Anti-Dum.PDF www.wto.org/english/tratop_E/adp_e/adp_e.htm
Texts and literature
Anti-dumping and countervailing Measures-A detailed study.
