ANTI-DUMPING
Anti-Dumping
•

Explanation

•

Proposal

•

Broader Implications

•

Futures Challenges
What is Anti-Dumping?
Article VI of GATT 1994:
A product is said to be dumped when its
export price is less than its norma...
Anti-Dumping Litigation
• World Trade Organization
– Countries are responsible for bringing a case
to the WTO Dispute Reso...
Anti-Dumping Globally
• Anti-dumping measures taken by WTO members have
increased from 129 in 1994 to 236 in 2000; 83%.
• ...
Most Affected Sectors
17%
4%
7%

39%

9%
11%

METAL

CHEMICAL

13%
PLASTIC

TEXTILES

Source: WTO Secretariat, Rules Divis...
Anti-Dumping Measures
Statistics
• 30% less investigations during successive periods 19942000-2008

• 37 cases initiated by developed countries ...
U.S. As Complainant
• 1 of 59 complaints made by the U.S. were
related to anti-dumping.
• Case: Mexico – Anti-Dumping Duti...
U.S. As Respondent
• 7 of 69 cases that have been brought
against the U.S. are related to antidumping.
– Case lost: Anti-d...
Impact of Anti-Dumping Laws
Pros
• Prevents Monopolies
• Protects Vulnerable
Industries
• Allows Firms Time to
Compete
• P...
Proposal
1. Reform Anti-dumping procedure in
the U.S.
2. Negotiate minor changes to the
WTO Anti-dumping Agreement.
Reform the U.S. Anti-Dumping Law
• Department of Commerce reviews the concept
of anti-dumping.
– Review the methodology of...
Changes to WTO Agreement
• Penalize WTO members for abuse of antidumping law.
– Amend article 9, Imposition and Collection...
Stakeholders
In Favor
•
•
•
•
•

Consumers
Exporters
WB/IMF
Economists
Regional Agreements
(NAFTA)

Against
• US currently...
Benefits for the U.S.
• Reduce the number of cases brought against the
U.S.
– U.S. wins as a Complainant, and loses as a
R...
Broader Implications
• Increase competition, which will increase
productivity and efficiency.
• Greater economic prosperit...
Future Challenges
• Negotiating a change to WTO anti-dumping
agreements.
• Altering the Dispute Settlement System to award...
Bibliography
1

Harvard International Review. National Sovereignty in the World Trading System. Winter 2001.

2

The Econo...
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  • 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
  • Anti dumping new

    1. 1. ANTI-DUMPING
    2. 2. Anti-Dumping • Explanation • Proposal • Broader Implications • Futures Challenges
    3. 3. 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 country.
    4. 4. Anti-Dumping Litigation • 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.
    5. 5. Anti-Dumping Globally • 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, Australia, Mexico. • Most affected industries: Metal, Chemical, plastic, textiles, machinery and equipment, agriculture and food.
    6. 6. Most Affected Sectors 17% 4% 7% 39% 9% 11% METAL CHEMICAL 13% PLASTIC TEXTILES Source: WTO Secretariat, Rules Division Anti-dumping Database M&E A&F OTHER
    7. 7. Anti-Dumping Measures
    8. 8. Statistics • 30% less investigations during successive periods 19942000-2008 • 37 cases initiated by developed countries and 63 by developing countries. • So far we have the similar trend for steel and chemical sectors. • Out of 22 AD initiations in the US 16 involved metal products.
    9. 9. 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.
    10. 10. 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 India. – 6 of 8 cases in consultations are Anti-dumping related.
    11. 11. Impact of Anti-Dumping Laws Pros • Prevents Monopolies • Protects Vulnerable Industries • Allows Firms Time to Compete • Preserves Jobs Cons • Against Free Trade Concept • Trade Barrier – Lowers Economic Growth • Distorts the Market • Protects Firms from Competition • Hurts Consumers
    12. 12. Proposal 1. Reform Anti-dumping procedure in the U.S. 2. Negotiate minor changes to the WTO Anti-dumping Agreement.
    13. 13. Reform the U.S. Anti-Dumping Law • Department of Commerce reviews the concept of anti-dumping. – Review the methodology of anti-dumping. • ITC defines material injury and be a more impartial judge. – Material injury is broad and subject to interpretation. • Congress to ensure that the ITC is cognizant of WTO negotiated agreements.
    14. 14. Changes to WTO Agreement • Penalize WTO members for abuse of antidumping law. – Amend article 9, Imposition and Collection of Anti-Dumping Duties • Negotiate the industry specific, incremental decrease of anti-dumping laws globally. – Revise article 11, Duration and Review of Anti-Dumping and Price Undertakings. • Tie in to a compromise on IPR agreements, or other U.S. interests.
    15. 15. Stakeholders In Favor • • • • • Consumers Exporters WB/IMF Economists Regional Agreements (NAFTA) Against • US currently protected industries • US Labor Unions (AFL/CIO) • Countries who want to protect their domestic market
    16. 16. Benefits for the U.S. • Reduce the number of cases brought against the U.S. – U.S. wins as a Complainant, and loses as a Respondent. • Better defense in anti-dumping cases. – U.S. law closer to WTO agreements. • Hold other nations accountable.
    17. 17. Broader Implications • Increase competition, which will increase productivity and efficiency. • Greater economic prosperity for all WTO members. • Lower prices for consumers. • Higher national income.
    18. 18. Future Challenges • Negotiating a change to WTO anti-dumping agreements. • Altering the Dispute Settlement System to award damages. • Convincing the American public that reform is critical for continuing U.S. success.
    19. 19. Bibliography 1 Harvard International Review. National Sovereignty in the World Trading System. Winter 2001. 2 The Economist. Our Law, Your Law. June 27, 2002 3 Association for Consumer Research. Global Trade Policy: Agenda for Change. September/October 2001. 4 President George W. Bush. Remarks by The President at Signing of the Trade Act of 2002. August 6, 2002. 5 Chemical Week. Trade Barriers Start to Fall Following WTO Entry. September 4, 2002. 6 Director General Supachai Panitchpakdi. Trade and Sustainable Development: The Doha Development Agenda. Johannesburg, South Africa. September 3, 2002. 7 The Financial Times. Playground Rules that Promote Protectionism. September 3, 2002. 8 The Economist. The Dumping Dilemma. May 30, 2002. 9 http://www.fin.gc.ca/activty/pubs/antidmp01_e.html 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 14. http://www.ustr.gov/enforcement/snapshot.html
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