Dumping occurs if a product is sold in a foreign market at a price below that which it sells in the domestic market. Every major market of the world possesses a law against dumping. Individual countries first implemented anti-dumping laws before it was negotiated in GATT. Countries follow its original laws and procedures concerning anti-dumping as long as these laws do not conflict with the Agreement on Implementation of Article VI of GATT 1994 found in Annex 1 of the WTO umbrella agreement
Anti-dumping cases have tripled since the 1980s.
(1) AD-steel pipe from Italy; (2) AD-silicon metal from Brazil; (3) AD-softwood lumber from Canada (preliminary); (4) AD/CVD-sunset reviews; (5) AD softwood lumber from Canada (final); AD-sunset reviews Argentina.
Methodologies must be changed so that the law targets only real price discrimination and below cost sales. If those price and practices are found, Commerce must determine whether they are really due to foreign market distortion practices, or just a normal business behavior. The way dumping is defined is average price of the product in the US with the average home market price or cost of production. What the DoC does is comparing each US sale with the average price or estimated production cost. Dumping is found to occur even when sale is below the average, which is not unfair.
Hold countries accountable for past transgressions by assessing monetary penalties.
However it will be beneficial if all WTO members as well as ITC an department of Commerce members. are in agreement
What is Anti-Dumping?
Article VI of GATT 1994:
A product is said to be dumped when its
export price is less than its normal value,
that is less than the sale of a like product
in the domestic market in the exporting
• World Trade Organization
– Countries are responsible for bringing a case
to the WTO Dispute Resolution System.
• U.S. Court of International Trade
– Commerce Department determines if antidumping occurred.
– International Trade Commission (ITC)
determines if material injury occurs.
• Anti-dumping measures taken by WTO members have
increased from 129 in 1994 to 236 in 2000; 83%.
• 2000 - 1119 anti-dumping measures in place globally.
• New users: Argentina, India, Brazil, South Africa.
• Traditional users: Canada, U.S., European Union,
• Most affected industries: Metal, Chemical, plastic,
textiles, machinery and equipment, agriculture and
Most Affected Sectors
Source: WTO Secretariat, Rules Division Anti-dumping Database
• 30% less investigations during successive periods 19942000-2008
• 37 cases initiated by developed countries and 63 by
• So far we have the similar trend for steel and chemical
• Out of 22 AD initiations in the US 16 involved metal
U.S. As Complainant
• 1 of 59 complaints made by the U.S. were
related to anti-dumping.
• Case: Mexico – Anti-Dumping Duties on
High Fructose Corn Syrup
– U.S. prevailed in litigation.
U.S. As Respondent
• 7 of 69 cases that have been brought
against the U.S. are related to antidumping.
– Case lost: Anti-dumping – Steel plate from
– 6 of 8 cases in consultations are Anti-dumping
Impact of Anti-Dumping Laws
• Prevents Monopolies
• Protects Vulnerable
• Allows Firms Time to
• Preserves Jobs
• Against Free Trade
• Trade Barrier – Lowers
• Distorts the Market
• Protects Firms from
• Hurts Consumers
1. Reform Anti-dumping procedure in
2. Negotiate minor changes to the
WTO Anti-dumping Agreement.
Reform the U.S. Anti-Dumping Law
• Department of Commerce reviews the concept
– Review the methodology of anti-dumping.
• ITC defines material injury and be a more
– Material injury is broad and subject to interpretation.
• Congress to ensure that the ITC is cognizant of
WTO negotiated agreements.
Changes to WTO Agreement
• Penalize WTO members for abuse of antidumping law.
– Amend article 9, Imposition and Collection of Anti-Dumping
• Negotiate the industry specific, incremental
decrease of anti-dumping laws globally.
– Revise article 11, Duration and Review of Anti-Dumping and
• Tie in to a compromise on IPR agreements, or
other U.S. interests.
• US currently protected
• US Labor Unions
• Countries who want to
protect their domestic
Benefits for the U.S.
• Reduce the number of cases brought against the
– U.S. wins as a Complainant, and loses as a
• Better defense in anti-dumping cases.
– U.S. law closer to WTO agreements.
• Hold other nations accountable.
• Increase competition, which will increase
productivity and efficiency.
• Greater economic prosperity for all WTO
• Lower prices for consumers.
• Higher national income.
• Negotiating a change to WTO anti-dumping
• Altering the Dispute Settlement System to award
• Convincing the American public that reform is
critical for continuing U.S. success.
Harvard International Review. National Sovereignty in the World Trading System. Winter 2001.
The Economist. Our Law, Your Law. June 27, 2002
Association for Consumer Research. Global Trade Policy: Agenda for Change. September/October
President George W. Bush. Remarks by The President at Signing of the Trade Act of 2002. August 6,
Chemical Week. Trade Barriers Start to Fall Following WTO Entry. September 4, 2002.
Director General Supachai Panitchpakdi. Trade and Sustainable Development: The Doha Development
Agenda. Johannesburg, South Africa. September 3, 2002.
The Financial Times. Playground Rules that Promote Protectionism. September 3, 2002.
The Economist. The Dumping Dilemma. May 30, 2002.
10. WTO Secretariat, Rules Division Anti-dumping Database
11. Dump our Anti-Dumping Law, Michael S. Knoll, Foreign Policy Briefing No. 11 July 25, 1991
12. Anti-dumping Law is discriminatory, Brink Lindsey, CTPS Articles
13. WTO: Trading to the Future
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