Dumping is, in general, a situation of international price discrimination, where the price of a product when sold in the importing country is less than the price of that product in the market of the exporting country. Thus, in the simplest of cases, one identifies anti-dumping simply by comparing prices in two markets.
However, the situation is rarely, if ever, that simple, and in most cases it is necessary to undertake a series of complex analytical steps in order to determine the appropriate price in the market of the exporting country (known as the “normal value”) and the appropriate price in the market of the importing country (known as the “export price”) so as to be able to undertake an appropriate comparison. Anti-dumping action can only be taken if dumping is taking place, accompanied by consequent injury to the domestic industry
(Anti-dumping in general. Image: TIBA Group
The purpose of anti-dumping investigation is to ascertain whether dumping is taking place and causing injury to the domestic industry of the country importing the allegedly dumped products. In other words, the process focuses on (i) establishing a “normal value” off the product when sold in the domestic market of the exporting country; (ii) establishing the export price of the products; (iii) comparing the export price with the normal value established; and (iv) ascertaining whether the domestic industry of the importing country is suffering injury as a result of the dumped imports. The rules of the multilateral trading system require that anti-dumping investigations be conducted with due cognizance taken off the principles of “due process,” which is, the anti-dumping investigations have to be conducted in a transparent, objective and equitable way, with all interested parties given adequate opportunity to defend their interests.
The rules about anti-dumping are already found in World Trade Organization (WTO) provisions:
Article VI of the General Agreement on Tariffs and Trade 1994 (GATT)
Article VI contains the basic provisions relating to anti-dumping action and is the “enabling provision”, and
The Agreement on Implementation of Article VI off GATT 1994 (the “Anti-dumping Agreement,” (AD Agreement”)
The AD Agreement contains detailed provisions relating to methodologies and procedure issues.
The 3 basic preconditions which have to be met before anti-dumping action can be taken are set out in Article VI off GATT 1994. In particular, WTO Member taking such measures must determine: (i) that the imports in question are dumped; (ii) that its own industry is materially injured, or is threatened with material injury, or that the establishment of a domestic industry is being materially retarded; (iii) that the injury under (ii) is being caused by the dumped imports. Dumping may only be counteracted if all 3 requirements are met.
Committee on anti-dumping practices
The Committee, which meets at least twice a year, provides Members of the WTO the opportunity to discuss any matters relating to the Anti-Dumping Agreement (Article 16). The Committee has undertaken the review of national legislations notified to the WTO. This offers the opportunity to raise questions concerning the operation of national anti-dumping laws and regulations, and also questions concerning the consistency of national practice with the Anti-Dumping Agreement. The Committee also reviews notifications of anti-dumping actions taken by Members, providing the opportunity to discuss issues raised regarding particular cases.
The Committee has created a separate body, the Ad Hoc Group on Implementation, which is open to all Members of the WTO, and which is expected to focus on technical issues of implementation: that is, the “how to” questions that frequently arise in the administration of anti-dumping laws.
All WTO Members are required to bring their anti-dumping legislation into conformity with the Anti-Dumping Agreement, and to notify that legislation to the Committee on Anti-Dumping Practices. While the Committee does not “approve” or “disapprove” any Members’ legislation, the legislations are reviewed in the Committee, with questions posed by Members, and discussions about the consistency of a particular Member’s implementation in national legislation of the requirements of the Agreement.
In addition, Members are required to notify the Committee twice a year about all anti-dumping investigations, measures, and actions taken. The Committee has adopted a standard format for these notifications, which are subject to review in the Committee.
Finally, Members are required to promptly notify the Committee of preliminary and final anti-dumping actions taken, including in their notification certain minimum information required by Guidelines agreed to by the Committee. These notifications are also subject to review in the Committee.
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