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shameful public administration”
Finger, J. Michael, Editor, “Antidumping How It Works and Who Gets Hurt”,
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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.
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ADITI MALIK (01) ANKIT SHARMA (02) NAVJOT KAUR NAGRA (20) PRADEEP KUMAR (26) RISHABH SOOD (29) YOGESH SHARMA (37)
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“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 market of the exporting country.”
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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 Group 3 SIIB AB 5 .
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. Group 3 SIIB AB 6 . 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 complaint).
i.e. • • Group 3 SIIB AB 7 Can be determined by: . domestic sales comparable representative export price to an appropriate third country. the cost of production in the country of origin with reasonable addition for administrative. • constructed normal value. selling and general costs and reasonable profits. Normal Value: The comparable price at which the goods under complaint are sold in the domestic market of the exporting country.
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.
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Compare Exporter Price to Normal Value
Normal Value Exporter Price Difference Attributable to Dumping Dumping Margin Difference Attributable = to Dumping/exporter price
$110.00 $90.00 $20.00
$20.00 / $90.00=22.22%
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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 exfactory level, for assessment of dumping.
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Domestic price of exporter > export
price Dumping = price discrimination between national markets
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o o o o o o o o Injury parameters include factors such as: Actual or potential decline in sales Loss of profits Market share Capacity utilization Employment Wages Ability to raise capital Lost contracts Group 3 SIIB AB 12 .
NIP is that level of price. which the industry is. Group 3 SIIB AB 13 . 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 (Article VI of GATT 1994) Group 3 SIIB AB 14 .
1975 sec 9A. 1994 Customs tariff act. 9B (as amended in 1995) Investigations by designated authority. Based on article VI of GATT. Ministry of Commerce Imposition and collection by Ministry of Finance Group 3 SIIB AB 15 .
. 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. Group 3 SIIB AB 16 . These are Physical characteristics Taxation Quantities etc.
Canada adopted the first anti-dumping law in 1904 followed by the European countries and then the US in 1916. In 1902. Formed the basis for the original GATT article (Article VI of GATT) on anti-dumping in 1947. Group 3 SIIB AB 17 .In the 19th century European Sugar Industries appealed to their respective governments for protection against sugar being dumped at unfairly low prices. there was a formal agreement on antidumping.
(1986-94) anti-dumping agreement is an agreement binding on all GATT or WTO members. these were not binding on all GATT members. they were open to signature by those countries that wished to do so. Subsequently. However. the Uruguay Round. But Group 3 SIIB AB 18 . codes on anti dumping were developed during the Kennedy Round (1962-67) and Tokyo Round (1973-79).
Group 3 SIIB AB 19 . It is a measure to rectify the situation arising out of the dumping of goods and its trade distortive effect. The use of anti dumping measure as an instrument of fair competition is permitted by the WTO. It provides relief to the domestic industry against the injury caused by dumping. Re-establish fair trade.
not necessary in the nature levied against exporter / country in as much as they are country specific and exporter specific. means of raising revenue and for overall development of the economy. 20 Group 3 SIIB AB .ANTIDUMPING DUTY NORMAL CUSTOMS DUTY To guard against unfair trade practices trade remedial measures. trade and fiscal policies of the Government Necessary in nature universally applicable to all imports irrespective of the country of origin and the exporter.
Duty remains in force for 5 years. Group 3 SIIB AB 21 . If there is dumping but no injury then no duty can be imposed. Yearly administrative reviews if requested by domestic industry or exporter. Re-determination at a “sunset review”.
Group 3 SIIB AB 22 . and there is a causal link between the dumping and the injury. that the dumped imports have caused the alleged injury. there is dumping there is injury to the domestic industry. that is to say.Sufficient evidence to the effect that .
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 price effect Group 3 SIIB AB 23 . No anti dumping duty shall be recommended without a finding of this causal relationship.
Group 3 SIIB AB 24 . for price effect. significant price under cutting by the dumped imports as compared with the price of the like product in the importer country. The volume effect of dumping relates to the market share of the domestic industry.
Against In Favour Consumers Exporters Economists Regional Agreements (NAFTA) Importing country currently protected industries Importing country Labor Unions Group 3 SIIB AB 25 .
which could go up to the dumping margin. may terminate investigation if the exporter concerned furnished an undertaking to revise his price Group 3 SIIB AB 26 . anti dumping duty imposed against that countries.
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. should not exceed 7% of the import of the like product. Group 3 SIIB AB 27 . The cumulative imports of the like product from all these countries who individually account for less than 3%.
The Authority can initiate the anti dumping investigation on its own without any complaint/petition filed in this regard Group 3 SIIB AB 28 . Rule 5(4) of the Anti Dumping Rules provides for suo-motu initiation of anti dumping proceedings by the Designated Authority.
Should not be less than six months and not more than eighteen months. the domestic industry has to furnish the relevant data for the past three years. The most desirable period of investigation is a financial year. Group 3 SIIB AB 29 . (period should be as representative a possible) For the purposes of injury analysis.
45 days Analysis of complaint Preparation and sending of questionnaires Analysis of questionnaire responses Lodging of complaint Initiation Sending of questionnaires 9 months On-spot verification visits Internal decision + consultation of MS + translation Analysis of disclosure reactions AD 6 months AS 4 months Additional on-spot verification visits if needed Internal decision + consultation of MS + translation Imposition of provisional measures if warranted and disclosure of decision to interested parties Total Duration AS 13 months AD 15 months Measures Measures are normally normally imposed for 5 imposed for 5 years Group 3 SIIB AB Final disclosure to interested parties Imposition of definitive measures if warranted 30 .
If evidence not adequate. Group 3 SIIB AB 31 .The application is scrutinized to ensure that it is fully documented provides sufficient evidence for initiating an investigation. Till then cannot be considered as application pending before authority. then a deficiency letter is issued.
Group 3 SIIB AB 32 . 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.Designated Authority determines that the application has been made by or on behalf of the Domestic Industry.
Group 3 SIIB AB 33 . Access to Information: The Authority provides access to the nonconfidential evidence available for inspection to all interested parties on request after receipt of the responses. 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.C. D.
The provisional duty will remain in force only for a period not exceeding 6 months.E. Group 3 SIIB AB 34 . extendable to 9 months under certain circumstances. 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.
Such information shall be taken into consideration only when it is subsequently reproduced in writing. F. G. Oral Evidence Interested parties can request the Designated Authority for an opportunity to present the relevant information orally.F. Group 3 SIIB AB 35 . Disclosure of information: Based on these submissions and evidence gathered the Authority will determine the basis of its final findings.
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. which form the basis for its decision before the final finding is made.the Designated Authority will inform all interested parties of the essential facts. H. Group 3 SIIB AB 36 .
Most affected industries: Metal. New users: Argentina.S. Group 3 SIIB AB 37 . textiles. agriculture and food. Brazil. 83%. South Africa. India. plastic. Chemical. Traditional users: Canada. European Union. U.. Mexico. Anti-dumping measures taken by WTO members have increased from 129 in 1994 to 208 in 2008. machinery and equipment. Australia.
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Rules Division Anti-dumping Group 3 SIIB AB Database 39 .17% 4% 7% 39% 9% 11% 13% METAL CHEMICAL PLASTIC TEXTILES M&E A&F OTHER Source: WTO Secretariat.
160 140 120 100 80 60 40 20 0 Source: WTO Secretariat. Rules Division Anti-dumping Group 3 SIIB AB Database 19 95 19 96 19 97 19 98 19 99 20 00 20 01 20 02 20 03 20 04 20 05 20 06 Metals Chemicals Plas Tex/Cloth 40 .
Source: WTO Secretariat. Rules Division Anti-dumping Group 3 SIIB AB Database 41 .
Source: WTO Secretariat. Rules Division Anti-dumping Group 3 SIIB AB Database 42 .
Group 3 SIIB AB 43 . Developing Countries Use Antidumping more intensely than developed countries.
Rules Division Antidumping Database Group 3 SIIB AB Developed Members Developing Members 44 .Total 1 400 MEASURES:1 900 Developing 75% Developing 75% Total 500 Developed 25% Developing 80% Developed 20% Developed 25% Source: WTO Secretariat.
Source: WTO Secretariat. Rules Division Anti-dumping Group 3 SIIB AB Database 45 .
218 Total 1 529 139 116 77 43 44 79 150 173 181 a Kor e i co Mex da Cana Braz il r Aust nt Arge r S Af India US EC Source: WTO Secretariat. Rules Division Anti-dumping Group 3 SIIB AB Database 46 46 .
284 Total 1 516 192 144 127 80 89 55 65 73 Braz il Cana da Aust r nt Arge Turk ey Chin a EC US Inda Source: WTO Secretariat. Rules Division Anti-dumping Group 3 SIIB AB Database 47 47 .
Rules Group 3 SIIB AB Division Anti-dumping Database 48 48 .Total 55 Countervailing Measures 11 Safeguards 11 Anti-Dumping 33 Source: WTO Secretariat.
Pros Cons Prevents Monopolies Protects Vulnerable Industries Allows Firms to Compete Preserves Jobs Against Free Trade Concept Trade Barrier – Lowers Economic Growth Distorts the Market Protects Firms from Competition Hurts Consumers Group 3 SIIB AB 49 .
1 0.3 0.15 0. Rules Division Anti-dumping Group 3 SIIB AB Database .25 0.2 0.Proportion of AD cases initiated by the countries 0.05 0 1995 India 1996 1997 1998 1999 2000 2001 2002 2003 2004 United States Canada China European Community 50 Source: WTO Secretariat.
6 Total 33 6 5 5 2 1 2 2 2 2 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Source: WTO Secretariat. Rules Division Anti-dumping Database 51 .
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.Unclear concept of “ordinary course of trade”. This is so because investigating authorities typically follow accounting practices of the importing country Group 3 SIIB AB 52 .
Business Standard .15 December. 2009 Group 3 SIIB AB 53 .
Chinese companies entered the Indian telecom market. India to impose antidumping duties on some equipment imported from China. Indian manufacturers hurt as well Group 3 SIIB AB 54 . offering products and services at prices about a third cheaper than that of global competitors.
Fibrehome Telecommunication Technologies Ltd. 29% and Israel's ECI Telecom Ltd. 93% on equipment imported from China Group 3 SIIB AB 55 . will have to pay a duty of 236%. AlcatelLucent Shanghai Bell Co.
The Indian Shrimp Industry Organizes to Fight the Threat of AntiDumping Action (CASE STUDY) Group 3 SIIB AB 56 .
The Ad Hoc Shrimp Trade Action Committee (ASTAC). India. Thailand and Vietnam. Ecuador. The petition alleged that these countries had dumped their shrimps in the US market. China. an association of shrimp farmers in eight southern states of the United States. Group 3 SIIB AB 57 . filed an anti-dumping petition against six countries — Brazil.
Group 3 SIIB AB 58 .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 3.56% and 27.49% by the DOC. Group 3 SIIB AB 59 .
01%. Group 3 SIIB AB 60 .91%. Ecuador 7.39%.2%. Brazil 36.09%. The average rate for ▪ ▪ ▪ ▪ ▪ China is 49. Vietnam 16.3% Thailand 6. The weighted average rate for India is 14.
Reggie Dupre. On 26 February 2002. a Louisiana state senator. alleged that tainted farm-raised Asian shrimp was being diverted from Europe and dumped on the US market. Group 3 SIIB AB 61 .
’ Group 3 SIIB AB 62 . Foreign Ministry spokeperson Phan Thuy Thanh said in a statement on 12 September 2002 that ‘I can say with certainty that Vietnam has never dumped its shrimp. 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. and its shrimp have been sold at market prices.
Rules Group 3 SIIB AB Division Anti-dumping Database 63 .Source: WTO Secretariat.
He said that the price of shrimp on the domestic market was much lower than the export price.Rokhmin Dahiri. therefore. denied allegations that the Indonesian government subsidized its shrimp farmers. ” Group 3 SIIB AB 64 . the Indonesian Maritime and Fisheries Minister. “The dumping charge was baseless and. the United States should exclude Indonesia from the proposed anti-dumping investigations.
Group 3 SIIB AB 65 . 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 share in the US market is on the rise. The Indian government and the Indian shrimp industry were aware of the threat. the then Minister for Commerce. Arun Jaitley.
shell-on equivalent basis. in 2000 to 650 million lbs in 2002. this had fallen to $2. Import prices of the targeted countries had dropped by 28% in the previous three years.54.55 in 2002. The average unit value of the targeted countries in 2000 was $3. Group 3 SIIB AB 66 . on a headless. Imports from the six countries increased from 466 million lbs. The six named countries accounted for 74% of shrimp imports in the US market.
High tariff rates in other large importing countries provided a powerful incentive for exporters to increase shrimp shipments to the United States.30 per pound from 2000 to 2002. The average dockside price for one count size of gulf shrimp dropped from $6. The United States was the most open market in the world.08 to $3. Group 3 SIIB AB 67 .
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. Group 3 SIIB AB 68 . from $255. The reason given was that India’s shrimp exports to the United States had been rising rapidly during the previous three years.93 million during 2000-1 to $299.05 million during 2002-3.
has now started buying many other varieties. Group 3 SIIB AB 69 . The United States. traditionally a buyer of small-sized shrimp from India. resulting in its occupying the top slot in India’s export markets of marine products. including black tiger shrimp. replacing Japan in 2002-3.
SEAI(Seafood Exporters Association of India (Kochi. Group 3 SIIB AB 70 . India). Kerala. and MPEDA(The Marine Products Export Development Authority) went into action. Commerce Minister on the possible threat to Indian shrimp exports to the United States.
Group 3 SIIB AB 71 . Of this. 70 million to fight the case. The SEAI (Sea food export Association of India) has estimated a total budgetary requirement of 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. SEAI would mobilize Rs.
Group 3 SIIB AB 72 . 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.
while fishing in the United States is a capital-intensive activity calling for major investment. Second. Group 3 SIIB AB 73 . 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. Noting that 80% of shrimp consumption in the United States is met through imports. in unprocessed form’. Group 3 SIIB AB 74 .
Shrimp exports to the United States had come almost to a standstill due to the uncertainty regarding the contingent applicability and incidence of the antidumping duty. Group 3 SIIB AB 75 .
since that had not yet happened. However. as required under the law. Group 3 SIIB AB 76 .In 1976 US banned shrimps . The WTO ruled against the United States and asked it to make the regime WTO-compatible. 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 MPEDA.It was on the ground that trawling for shrimp by mechanized means had been adversely affecting certain varieties of sea turtles.
This resulted in the selection and appointment of the legal counsel. in September 2003. 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. Group 3 SIIB AB 77 .
The shrimp industry in India shouldn’t have been focused on only one or two major markets for growth. The speedy resolution of the issue of financing helped Indian case. Previously it was Japan and during the last few years. Group 3 SIIB AB 78 . it has been the United States.
has said that they are exploring alternative markets to make up for the loss of the lucrative US market. India learnt the importance of diversification. J. A. Tharakan. ‘But it will be a long drawn-out process. the SEAI president.’ Group 3 SIIB AB 79 . It is not easy to establish your presence.
” Business line newspaper– 1st Feb. “On 27 th Jan exports to US were resumed. 2010 Group 3 SIIB AB 80 .
in/Anti-Dum.google.com exim.indiamart.wto.PDF www.org/english/tratop_E/adp_e/adp_e.com www.nic. Group 3 SIIB AB 81 .htm Texts and literature Anti-dumping and countervailing Measures-A detailed study.e-businessline.com commerce. Websites www.
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