DUMPING
Dumping - Definition
The export by a country or company of a product at a
price that is lower in the foreign market than the price
charged in the domestic market.
Dumping occurs when
Normal Value in Export market > Export Price
WTO decides whether dumping is
unfair competition
First Instances of the Practice of Dumping
16th century selling paper at loss in England to kill its
paper industry
17th century - Dutch accused of selling products at lower
cost to drive out French from the Baltic areas
1790s 1800s Americans become wary of under priced selling by competitors
Types of Dumping
Sporadic Dumping
Predatory Dumping
Persistent Dumping
Social Dumping
Causes of Dumping
Producers in one country are trying to stay competitive with
producers in another country.
Producers in one country are trying to eliminate the producers
in another country and gain a larger share of the world market
Producers are trying to get rid of excess stuff that they can't
sell in their own country,
Producers can make more profit by dividing sales into
domestic and foreign markets, then charging each market
whatever price the buyers are willing to pay.
Consequences of Dumping
Affects the financial viability of the domestic
manufacturers
Job losses and unemployment in the long run
Affects trade relations between countries
Anti-Dumping rules and imposition of tariffs an quotas
Actions in the United States
The regulations are determined by the United States
Department of Commerce for "less than fair value.
The International Trade Commission, which determines
"injury".
Actions in the United States
The antidumping duties are imposed on goods imported
from the dumpers' country at a percentage rate calculated
to counteract the dumping margin.
Countervailing duties
Anti dumping duties.
Actions in the European Union
European Union anti-dumping is under the purview of the
European Council.
It is governed by European Council regulation 384/96
implementation of anti-dumping actions (trade defence
actions) is taken after voting by various committees with
member state representation.
Actions in the European Union
Community industry can apply to have an anti-dumping
investigation to DG Trade.
It should represent at least 25% of community industry.
the level of tariff set is based on the damage done to
community producers by dumping.
EU anti-dumping actions are primarily considered part of
a "trade defence" portfolio.
Chinese Economy in relation with Dumping
Anti-Dumping Probes on China
Glossy Paper
Galvanized Steel
Silica Bricks
Solar Panels
Chinas Response
Steel Tubes
Car parts
Polysilicon
Chemical Industry
China Worlds Top Dumping Offender
No Market Economy Status!!!
An economy that relies chiefly on market forces to allocate goods and resources and
to determine prices.
So Analogous Market used
Quite unreasonable to compare
China now developing an Open market unlike the 60s
Demands by other parties - Should give greater independence to the state-controlled
banking sector to issue loans based on what businesses could pay them back.
Status in 2016.
http://www.voxeu.org/article/china-market-economy
http://www.chinadaily.com.cn/bizchina/
2012-12/12/content_16010548.htm
Article VI Of GATT And The Antidumping Agreement
Explicitly authorizes the imposition of a specific antidumping duty on imports from a particular source, in
excess of bound rates
Members may challenge the imposition of anti-dumping
measures, in some cases may challenge the imposition
of preliminary anti-dumping measures, and can raise all
issues of compliance with the requirements of the
Agreement, before a panel established under the DSU
Article 18.5 of the AD Agreement requires Members to
notify their domestic laws and/or regulations relating to
anti-dumping to the ADP Committee.
Notifications under the agreement on implementation of Article VI
WTO Members obliged to submit several types of
notification to the Committee on Anti-Dumping Practices
Except where a notifying Member specifically requests
the contrary, all notifications are issued as unrestricted
documents and are fully accessible to the public
Members that have no anti-dumping laws or regulations
should notify that fact
WTO Safeguard Provisions
Prohibits grey-area measures, and sets time limits (a sunset
clause) on all safeguard actions
Authorities to announce publicly when hearings are to take place
and provide other appropriate means for interested parties to
present evidence. The evidence must include arguments on
whether a measure is in the public interest
Quantitative restrictions (quotas) normally should not reduce the
quantities of imports below the annual average for the last three
representative years for which statistics are available, unless clear
justification is given that a different level is necessary to prevent or
remedy serious injury
WTO Safeguard Provisions
The WTOs Safeguards Committee oversees the operation of the agreement and
is responsible for the surveillance of members commitments. Governments have
to report each phase of a safeguard investigation and related decision-making,
and the committee reviews these reports
Safeguard actions on developing countries: An importing country can only apply a
safeguard measure to a product from a developing country if the developing
country is supplying more than 3% of the imports of that product, or if developing
country members with less than 3% import share collectively account for more
than 9% of total imports of the product concerned
A safeguard measure should not last more than four years, although this can be
extended up to eight years, subject to a determination by competent national
authorities that the measure is needed and that there is evidence the industry is
adjusting
Impact Of Dumping On Indian Economy
Anti-dumping In India: Legal Framework
The principle of imposition of anti-dumping duties was propounded by the Article
VI of General Agreement on Tariffs & Trade (GATT) 1994 Uruguay Round
Indian legislation in this regard is contained in Section 9A and 9B (as amended in
1995) of the Customs Tariff Act, 1975
Further regulations are contained in the Anti-Dumping Rules [Customs Tariff
(Identification, Assessment and Collection of Anti-Dumping Duty on Dumped
Articles and for Determination of Injury) Rules, 1995]
The Designated Authority for conducting investigations pertaining to Anti-Dumping
issues and on basis thereof, for forwarding its recommendations is the Ministry of
Commerce, Government of India.
The responsibility for Imposition and Collection of duties as imposed
/recommended by the Adjudicating authority is imposed upon the Ministry of
Finance, Government of India.
Anti-dumping In India: Legal Framework
Anti-dumping, anti-subsidies & countervailing measures in India are
administered by the Directorate General of Anti-dumping and Allied Duties
(DGAD) functioning in the Department of Commerce in the Ministry of
Commerce and Industry and the same is headed by theDesignated
Authority
The Central Government may, by notification in the Official Gazette, appoint a
person not below the rank of a Joint Secretary to the Government of India or
such other person as that Government may think fit as the Designated
Authority.
The Designated Authority is a quasi-judicial authority notified under the
Customs Act, 1962.
A senior level Joint Secretary and Director, four investigating officers and four
costing officers assist the DGAD plus a section under the DGAD headed by
the SectionOfficer to deal with the monitoring and coordination of die
Anti-dumping In India: Legal Framework
The Designated Authoritys function, however, is only to conduct die anti-
dumping/anti subsidy & countervailing duty investigation and make
recommendation to the Government for imposition of anti-dumping or anti
subsidy measures.
While the Department of Commerce recommends the Anti-dumping duty, it is
the Ministry of Finance, which levies such duty.
The law provides that an order of determination of existence, degree and
effect of dumping is appealable before the Customs, Excise and Gold
(Control) Appellate Tribunal (CEGAT) a judicial tribunal. It reviews final
measures and is independent of administrative authorities.
This is consistent with the WTO provision of independent tribunals for appeal
against final determination and reviews. No appeal will lie against the
preliminary findings of the Authority and the provisional duty imposed on the
basis thereof. The appeal to the CEGAT should be filed within 90 days.
Dumping Cases Filed By India
272 cases against other nations.
Out of which 149 are against China
Cases are filed under various products and profiles as follows:
Chemicals & Petrochemicals
Pharmaceuticals
Textiles/Fibres/Yarns
Steel & Other Metals
Consumer Goods
Other Products
For more details please do visit the Ministry of Commerce link
given below:
http://commerce.nic.in/traderemedies/ad_casesinindia.asp?id=2
Wow !!! Its really worth it!
Dumping Cases Filed by India: India vs China
India
on 13 January 2012 extended for five years anti-dumping duty on import of four Chinese products in the
face of widening trade gap with China. The duty has been imposed to protect the domestic industry from
cheap imports.
As
per the Revenue Department notification issued for the purpose, import of certain type of silk fabrics from
China is to attract anti-dumping duty of $1.82 to $7.59 per meter. The duty was first imposed on the fabrics in
December 2006 till December 2011.
Notifications for extension of anti-dumping duty on imports of cellophane transparent film and saccharin from
China for five years have also been issued. Saccharin is a non-nutritive sweetener and considered to be low
calorie substitute for cane sugar.
India
had a trade deficit of $16 billion against China during 2010-11. It has already crossed $20 billion in the
first seven months of 2011-12. The Directorate General of Anti-Dumping (DGAD) had carried a suo motu probe
in December 2010 to examine whether cessation of the duty would lead to continuation of dumping and injury
to the domestic players. Following the review, DGAD had recommended continuation and enhancement of the
anti-dumping duty. India till date initiated about 150 anti-dumping cases against China, which account for over
half of such actions taken by the country against foreign nations.
In
the notification it was also specified that the duty on import of certain type of nylon filament yarn from China,
Chinese Taipei, Malaysia, Thailand and Korea will be imposed at USD 0.20 to USD 1.51 per kilogram for
another five years.
the
government also levied provisional anti-dumping duty on import of phosphoric acid (excluding agriculture
/fertiliser grade) from Israel and Taiwan. The duty at $116.25 to USD 260.26 per tonne has been imposed for
six months.
Dumping Case Filed Against India
Shrimp case ---USA Vs BIVCET
Case was filed by US DOC on behalf of ASTAC in 21 st Jan, 2004
Vietnam reacts first, Indonesia next and then India enters.
Case won by BIVCET and India resumes exports from 27 th Jan, 2010
Allura Red Color[(FD&C)Red No.40] case---USA Vs India
Its used in soft drinks, baked foods, pet foods and pharmaceutical drugs.
Case was filed by US colors company Sensient Technologies on the grounds
of import commodity allura red coloring being sold at less than fair value in
USA
Decision by 4 Commissioners in favor of India saying that there is not a
reasonable indication that a US Industry is is materially injured or threatened
with material injury by reason of imports of allura red coloring from India that
are allegedly subsidised and being sold in the US at less than the fair value.
Gain to Indian allura producer ---Neelikon
