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 normal value, that is less than the sale of a like product in the domestic market in the exporting country.

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 anti-

dumping occurred.– International Trade Commission (ITC)

determines if material injury occurs.

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.

Most Affected Sectors

39%

13%11%

9%

7%4%

17%

METAL CHEMICAL PLASTIC TEXTILES M&E A&F OTHER

Source: WTO Secretariat, Rules Division Anti-dumping Database

Anti-Dumping Measures

Statistics

• 30% less investigations during successive periods 1994- 2000-2008

• 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.

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 anti-dumping.

– Case lost: Anti-dumping – Steel plate from India.

– 6 of 8 cases in consultations are Anti-dumping related.

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

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 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.

Changes to WTO Agreement

• Penalize WTO members for abuse of anti-dumping 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.

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

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.

Broader Implications

• Increase competition, which will increase productivity and efficiency.

• Greater economic prosperity for all WTO members.

• Lower prices for consumers.

• Higher national income.

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.

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