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Anti dumping a tool of protectionism

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Anti dumping a tool of protectionism

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Anti dumping a tool of protectionism

  1. 1. By – Group 2 1. Aditya 2. Debangshu 3. Kiran Kumar 4. Manikandan 5. Sandra
  2. 2.  “Dumping is a situation of international price discrimination, where the price of a product when sold to the importing country is less than the price of the same product when sold in the market of the exporting country.”
  3. 3.  Normal Value: The comparable price at which the goods under complaint are sold in the domestic market of the exporting country.  Export price: The price at which it is exported to the importing country.  Dumping Margin: The margin of dumping is the difference between the Normal value and the export price of the goods under complaint. It is generally expressed as a percentage of the export price.
  4. 4. Exporters Price Compare Exporter Price to NormalValue NormalValue $110.00 Exporter Price $90.00 DifferenceAttributable to Dumping $20.00 DifferenceAttributable to Dumping/exporter price Dumping Margin = $20.00 / $90.00=22.22% NormalValue
  5. 5.  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.
  6. 6.  Affects the operation of the domestic manufacturers  Job losses and unemployment in the long run  Affects trade relations between countries
  7. 7. 39% 13%11% 9% 7% 4% 17% METAL CHEMICAL PLASTIC TEXTILES M&E A&F OTHER Source: WTO Secretariat, Rules Division Anti-dumping Database
  8. 8.  In the 19th century European Sugar Industries appealed to their respective governments for protection against sugar being dumped at unfairly low prices.  In 1902, there was a formal agreement on anti- dumping. Canada adopted the first anti-dumping law in 1904 followed by the European countries and then the US in 1916.  Formed the basis for the original GATT article (Article VI of GATT) on anti-dumping in 1947.
  9. 9.  Subsequently, codes on anti dumping were developed during the Kennedy Round (1962-67) and Tokyo Round (1973-79).  However, these were not binding on all GATT (General Agreement on Tariffs & Trade) members; they were open to signature by those countries that wished to do so.  But the Uruguay Round, (1986-94) anti-dumping agreement is an agreement binding on all GATT or WTO members.
  10. 10.  It is a measure to rectify the situation arising out of the dumping of goods and its trade distortive effect.  Re-establish fair trade.  The use of anti dumping measure as an instrument of fair competition s permitted by the WTO.  It provides relief to the domestic industry against the injury caused by dumping.
  11. 11. Sufficient evidence to the effect that  There is dumping  There is injury to the domestic industry and  There is a causal link between the dumping and the injury, that is to say, that the dumped imports have caused the alleged injury.
  12. 12.  Should not be less than six months and not more than eighteen months.  The most desirable period of investigation is a financial year. (period should be as representative a possible)  For the purposes of injury analysis, the domestic industry has to furnish the relevant data for the past three years.
  13. 13.  No anti dumping duty shall be recommended without a finding of this causal relationship. That is to say,  Dumping should lead to Injury  The causal link is to be established generally in terms of the following effects of dumped imports on domestic industry: -  volume effect  price effect
  14. 14.  The volume effect of dumping relates to the market share of the domestic industry.  for price effect, significant price under cutting by the dumped imports as compared with the price of the like product in the importer country.
  15. 15.  Anti-dumping measures taken by WTO members have increased from 129 in 2000 to 208 in 2013; 83%.  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.
  16. 16. Source: WTO Secretariat, Rules Division Anti-dumping Database
  17. 17.  Prevents Monopolies  Protects Vulnerable Industries  Allows Firms to Compete  Preserves Jobs
  18. 18. 1 • Actual or potential decline in sales • Loss of profits • Decrease in market share 2 • Reduction in capacity utilization • Reduction in wages • Cut down in manpower 3 • Inability to raise capital • Loss in contracts • Shutdown of plant
  19. 19.  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/Fibers/Yarns  Steel & Other Metals  Consumer Goods  Other Products
  20. 20.  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.

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