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ANTI-DUMPING –
BASIC PRINCIPLES
28 September 2010
Judith Czako
Counsellor, Rules Division
WTO Secretariat
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Fundamental WTO principle – mutual opening-
up of Members to international trade
Why?
economic benefits of trade
How?
Market access (tariff binding)
Ban on quantitative restrictions
Non-discrimination (MFN and national treatment)
2
Potential problems for domestic competitors
Allow, under certain circumstances, the
application of «contingent trade remedy
measures» to imports
Allows Members to depart from the fundamental principles of
the GATT system
3
What are the measures?
ANTI-DUMPING measures
COUNTERVAILING measures; and
SAFEGUARD measures
4
Domestic legal basis
Measures taken unilaterally by the
government of the importing Member, and
applied at the border
Not required to have in national law
BUT, must respect Agreements.
almost impossible without domestic legislation
5
Anti-dumping measures
Anti-dumping duties on imports concerned
(different rates for each exporter)
Price undertakings (exporters undertake to
raise prices to eliminate dumping or injury)
6
Basic principle
Only where imports of the product concerned from
the country concerned:
are dumped AND
cause (or threaten to cause) «material injury» to
a domestic industry producing a «like product»
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Basic principle
The conditions governing the application of
these measures are not discretionary. The
rules and principles set out in the WTO
Agreement must be respected
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Definitions - Dumping
Introduction of a product into the
commerce of another country at less
than its «normal value»
international price
discrimination
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Definitions - Normal value
In general, the price of the product in the
domestic market of the country of export
Alternative bases for normal value – Allowed
in certain defined circumstances:
Price of export to a third country
«constructed normal value» (the sum of
production costs, expenses and profit)
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Definitions – Like Product
Domestic product identical to the imported product
under investigation
OR, if no identical product,
Domestic product having characteristics closely
resembling those of the imported product under
investigation
11
Definitions – Domestic industry
Domestic producers as a whole of the product
that is like the product concerned OR
Producers whose collective output constitutes
a major proportion of the total production of the
like product
12
Definitions – Injury
three forms of «injury»:
«material injury»: Present/existing injury
«threat of material injury»: Injury that has not
taken place yet but is imminent; and
«material retardation» in the establishment of a
domestic industry
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Definitions – Causal link
Causal link between dumped imports AND injury
a genuine and substantial relationship of
cause and effect between dumped imports and
injury, based on objective examination of
evidence
injury caused by factors other than the
dumped imports must not be attributed to
these imports
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Establishing the existence of
dumping
Compare the product’s export price (EP) and its normal
value (NV)
Dumping exists where there is a positive difference
a
E.g.:
Normal value: £25 per kg
less
export price: __£20 per kg
Difference (positive) £ 5 per kg
Dumping margin of 25% (on basis of EP)
15
Fair comparison
Is it possible to compare, as NV, the retail sale price of
a suit with, as EP, the wholesale price of the same suit?
Is it possible to compare, as NV, the price of a car that
has every possible optional feature with, as EP, the
price of the same model of car without any optional
features?
Why not?
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Fair comparison
Rules to ensure that comparisons are «fair»
Compare prices at the same level of trade, normally the
ex-factory level
at as nearly as possible the same time
Differences which affect price comparability must be
accounted for – “adjustments”:
E.g., Conditions/terms of sale, quantities, physical
characteristics, taxation
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Many sales, one dumping margin
Weighted average normal value to weighted
average export price
Transaction normal value to transaction
export price
weighted average normal value to transaction
export price
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Level of anti-dumping duty
The anti-dumping duty rate cannot exceed
the calculated dumping margin
In the previous example, this would be either £5/kg or
25% ad valorem maximum
Members are encouraged to apply duties
lower than the margin where these would be
sufficient to remedy the injury caused by
imports (lesser duty rule)
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Procedures –Initiation
Application by the domestic industry affected
examination of the representativeness (standing) of
the petitioners
Examination of the adequacy of the evidence
provided in the application in respect of:
The existence of dumping
the existence of injury
causal link
Public notice of the initiation of an
investigation
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De Minimis dumping and negligible
imports
If the margin of dumping is de minimis or the imports are
negligible
the investigation must not be initiated or must be terminated
Dumping
De minimis < 2% of export price
Negligible imports < 3% of volume of total imports, unless the
countries concerned collectively account for > 7% of imports
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Procedures –
Time-limit for investigation (normally 12 months)
Questionnaires - to exporters, importers and domestic
producers, others possible
Dumping margins - normally calculated on the
basis of exporters’ replies to questionnaire
Injury - normally determined on the basis of
domestic producers’ and importers’ replies to
questionnaire
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Procedures –Provisional measures
Purpose - to prevent further injury during the
investigation
Form - duty or security
Basis - preliminary determination of dumped
imports causing injury
Amount - < dumping margin or amount of subsidy
provisionally estimated (minimum period – 60 days
after initiation)
When / duration – no less than 60 days after
initiation; normally 4 months, possible 6
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Procedures – due process
right of defence
Interested parties (including exporters and their governments)
have the right to present evidence and arguments to the
authorities
Hearings
Transparency
Parties: Right to see evidence, arguments; authorities’
calculations and bases for determinations
Authorities: published determinations at every stage
(initiation, preliminary determination, final determination)
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Definitive measures
Form – duty or undertaking
Basis –final determination of dumping,
injury, causal link
Amount - < dumping margin or amount of
subsidy definitively established (on the basis
of verified replies to questionnaires)
When / duration – not before final
determination; 5 years max., can be
extended (conditions)
25
While the measure is in place
Exporters or producers can request
recalculation, if think excess duties have
been paid
Overpayment must be refunded
26
Procedures –Multilateral level
Notifications to the WTO
Initiation
Preliminary determinations, provisional measures
Final determinations, definitive measures
Semi-annual report to the WTO
27
What happens if the rules are not
followed?
domestic judicial proceedings and/or
WTO dispute settlement
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