A product is to be considered as being dumped, i.e. introduced into the commerce of another country at less than its normal value, if the export price of the product exported from one country to another is less than the comparable price, in the ordinary course of trade, for the like product when destined for consumption in the exporting country. Economists have never been very happy with the idea of singling out dumping as a prohibited practice. For one thing, setting different prices for different customers is a perfectly legitimate business strategy—like the discounts that airlines offer to students, senior citizens, and travelers who are willing to stay over a weekend, all falling under the rubric of “price discrimination.”
Internatinal trade policy Anti-dumping A product is to be considered as being dumped, i.e introduced into the commerce of another country at less than its normal value, if the export price of the product exported from one country to another is less than the comparable price, in the ordinary course of trade, for the like product when destined for consumption in the exporting country Economists have never been very happy with the idea of singling out dumping as a prohibited practice For one thing, setting different prices for different customers is a perfectly legitimate business strategy—like the discounts that airlines offer to students, senior citizens, and travelers who are willing to stay over a weekend, all falling under the rubric of “price discrimination.” Opinions differ as to whether dumping constitutes “fair”competition and within the framework of WTO rules, many governments around the world are allowed by WTO rules to take action against dumping (despite being allowed as a practice, “condemned but not prohibited”), by following a specific set of procedures whereby “material injury” needs to be established and sets forth three methods by which a good’s “normal” value is calculated Internatinal trade policy Most countries have in place a regulatory framework dealing with dumping complaints For example, a U.S firm files an anti-dumping complaint against a Chinese exporter The U.S can simply ignore Chinese data on costs on the assumption they are distorted by subsidized loans, rigged markets, and the controlled yuan Instead, the government uses data from other developing nations regarded as market economies In the TV and furniture cases, the U.S used India—even though it is not a big exporter of these goods Since India’s production costs were higher, China was ruled guilty of dumping When an anti-dumping duty is imposed in respect of any product, such antidumping duty shall be collected in the appropriate amounts in each case, on a non-discriminatory basis on imports of such product from all sources found to be dumped and causing injury, except as to imports from those sources from which price undertakings under the terms of this Agreement have been accepted An anti-dumping duty shall remain in force only as long as and to the extent necessary to counteract dumping which is causing injury 01 02 RETROSPECTIVE When the amount of the anti-dumping duty is assessed on a retrospective basis, the determination of the final liability for payment of anti-dumping duties shall take place as soon as possible, normally within 12 months, and in no case more than 18 months, after the date on which a request for a final assessment of the amount of the anti-dumping duty has been made PROSPECTIVE When the amount of the anti-dumping duty is assessed on a prospective basis, provision shall be made for a prompt refund, upon request, of any duty paid in excess of the margin of dumping Anti-dumping in WTO Overview about anti-dumping Contents Conditions applying anti-dumping measures Principles of anti-dumping measures in the WTO Anti-dumping measures Anti-dumping Dumping Dumping is a process wherein a Overview company exports a product at a price that is significantly lower than the domestic price market The negative effect of dumping • Distorting the nature of the market when goods in circulation can no longer hold their true value • Affecting the benefits of sellers and consumers • Causing damage to the market domestic Anti-dumping agreement • The anti-dumping duty was applied for the first time by GATT in 1904 and since then has become prevalent in both developed and undeveloped countries Overview • The tax is an effective tool to protect domestically made products against the dumping of imported goods in the domestic market I Conditions applying There is actual and determined dumping anti-dumping measures II The domestic market of importing country has suffered injury or being threaten III The investigation of the dumping proceeds in compliance with the specified procedures Principles Be remedial, not punitive No discrimination Be temporary Dumping and WTO-specified anti-dumping tax Dumping identification The sale of a product is considered dumping when its export price is lower than its comparative price under normal trade conditions (the normal value) or the price of a similar product sold in the market of the exporting country Dumping identification principles The dumping range is the difference between the normal value and the export price If the dumping range is above zero then dumping will be recognized Dumping identification principles The dumping range can also be some absolute value or percentage that is calculated by the formula: DR= (normal value – export price)/export price x 100% Dumping range calculation SITUATION: when the product is not available in the market of the exporting country under normal trade conditions or is available but under special conditions SOLUTION: the normal price of the product can be identified as equal to export price of a similar product to a third country, or calculated as the sum of the production cost and administrative, sale, management expenses and profits Dumping range calculation SITUATION: the substitute product is exported from a country that runs a non-market economy, the above principles will not be applied to identifying the normal value SOLUTION: a third country that runs a market economy and is considered a having the same economic development standard as the exporting country can be selected for comparison Damage identification damage caused by dumping is often identified based on two elements The import volume of the dumped goods The influence of those imported goods on the price of the substitute products Damage identification If the dumped goods are imported from different countries, the dumping range will be calculated as equal to or more than to 2% of the export price And the import volume of goods from each country will account for 3% or a higher percentage of the import volume of the substitute products THANK YOU ANTI-DUMPING AGREEMENTS PHAM YEN NHI - TMAE301.2 WHAT IS DUMPING ? Dumping refers to the practices of exporting goods to a foreign country at lower prices than the price of the same goods in the exporting country's domestic market Nations are embracing anti-dumping to establish protective measures WTO ANTI-DUMPING AGREEMENT WTO agreement allows governments to act against dumping where there is genuine (“material”) injury to the competing domestic industry In order to that, the government has to: Show that dumping is taking place Calculate the extent of dumping Show that the dumping is causing injury or threatening to so SUBSTANTIVE RULES DETERMINATION OF DUMPING Calculated based on a "fair comparison” between normal value and export price DETERMINATION OF INJURY DEFINITION OF INDUSTRY Determining "material injury" based on positive evidence of the volume & price effects and consequence of dumped imports Domestic producers may be excluded from consideration as part of the domestic industry if “related” to exporters or importers Anti-dumping duties (ADA) Anti-Dumping Duty = Normal Value – Export Value One kind of import tariff Levied on particular producers, not the whole goods of importing counries Anti-discrimination principles BASIC CONTENTS Dumping margin Dumping Margin = (Amount of dumping / Export price) x 100 The base on which ADA can be determined THANK YOU 'Anti-dumping 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, Anti-dumping How It Works and Who Gets Hurt