BY -P. PAVANI -SRI RAJ KALYAN -M.L SRINIVAS WTO- ANTI DUMPING MEASURES
What is Dumping ? Dumping is defined as the act of a manufacturer in one country exporting a product to another country at a price which is either below the price it charges in its home market or is below its costs of production A product is considered as dumped when, export price < normal price The difference between the export price and normal value is known as margin of dumping( expressed as % of export price of a product)
Types of Dumping Intermittent Dumping : When production of a product is more than demand in home country , the stocks are piled up even after sales. In such situation, the producer sells the remaining stock in foreign countries at a lower price than in home country Persistent Dumping : The monopolist sells the remaining production in foreign market at low price continuously Predatory Dumping: : The monopolist sells the product in a foreign market at low price to drive away competitors and increase the price once they leave the market.
WHY is it happening? To enter the Foreign market by eliminating the competitors To sell Surplus Production, the producers dump their products To Develop Trade Relations ,the manufacturers sell their output in foreign countries at lower price.
EFFECTS Of Dumping: ONIMPORTING COUNTRY: Decline in sales and profits Affects the survival of industry Preferences of the consumers is changed which leads to forcible importation at high price if the dumping is stopped Increases the deficit of Balance Of Payments( BOP) Importing country benefits because of anti-dumping tarriffs ON EXPORTING COUNTRY: The consumers of exporting country pay higher price where as, the foreign market enjoys at a lesser price Finds market for its excess production &earns foreign exchange
HOW is it happening?-Anti-Dumping investigation process
Anti dumping measures In view of negative effects of Dumping , the importing country imposes Anti Dumping Measures Tariff Duty : High rates of import tariff on dumping Import Quota : Restricts the volume of imports Import Embargo : Bans the import of particular goods or all goods from a country Voluntary Export Restraint : Exporting countries realises the negative effects and voluntarily come for Bilateral agreements. In INDIA , anti-dumping actions are taken by , Directorate of Anti-Dumping and Allied Duties,Ministry of Commerce,as per Customs tariff Act,1975 as ammended in 1995,based on Article VI of GATT 1994.
ADM are not applicable if: The margin of dumping is significantly small (less than 2% of export price) The volume of imports is negligible(less than 3%of total imports of that product in a country) Ex-Developing countries Anti-Dumping actions may be suspended or terminated if the exporter concerned furnishes an undertaking to revise the price to remove the dumping or the injurious effect of dumping.