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Export price of goods means the price at which the goods are sold to importing country. It is generally the cost, insurance and freight (CIF) value minus the adjustments account of ocean freight, insurance, commission etc. so as to arrive at the value of ex-factory level.
The Agreement on Safeguards authorizes importing countries to restrict imports for temporary periods, if after investigation it has been established that imports are causing serious injury to the domestic industry. Safeguard measures include increasing tariffs over bound rates or imposing quantitative restrictions.
Therefore, the agreement clearly lays down the principle that anti-dumping duties on dumped imports cannot be levied solely on the ground that a product is being sold at a lower price to the importing country. They can be levied only if it is established, that the dumping is causing material injury to that industry.
Disputes in the anti-dumping area are subject to binding dispute settlement before the Dispute Settlement Body of the WTO, in accordance with the provisions of the Dispute Settlement Understanding ("DSU") (Article 17).
Anti-dumping action involves charging extra import duty i.e. anti-dumping duty on the particular product that is being exported from a particular country in order to bring its price closer [link widoczny dla zalogowanych] to the domestic price or to [link widoczny dla zalogowanych] remove the injury to the domestic industry in importing country.
Under Article VI of GATT 1994, and the Anti-Dumping Agreement, WTO Members can impose anti-dumping measures, if, after investigation in accordance with the Agreement, a determination is made (a) that dumping is occurring, (b) that the domestic industry producing the like product in the importing country is suffering material injury, and (c) that there is a causal link between the two.
Anti-dumping & Anti-subsidy cases in India
Under the GATT provisions, anti-dumping duties cannot exceed dumping margin. However, it is suggested to impose a lesser duty, which is adequate to remove the injury [link widoczny dla zalogowanych] caused to domestic industry. Under Indian laws, the authorities are obliged to restrict the anti-dumping duty to lower of the two i.e. dumping margin and injury margin.
There are two fundamental parameters used for determination of dumping, namely, the [link widoczny dla zalogowanych] normal value and the export price. [link widoczny dla zalogowanych] Both these elements have to be compared at the same level of trade, generally at ex-factory level, for assessment of dumping. The normal value is generally the price of the product at issue, in the ordinary course of trade, when destined for consumption in the exporting country market.
Any exporter whose margin of dumping is less than 2% of the export price shall be excluded from the purview of [link widoczny dla zalogowanych] anti-dumping duties even if the existence of dumping, injury as well as the causal link is established
Broadly, injury may be analyzed in terms of the volume effect and price effect [link widoczny dla zalogowanych] of the dumped imports. The parameters by which injury to the domestic industry is to be assessed in the anti-dumping proceedings are such economic indicators having a bearing upon the state of industry as the magnitude of dumping, and the decline in sales, selling price, profits, market share, production, utilization of capacity etc
EU, US, Canada and South Africa account for almost [link widoczny dla zalogowanych] 60% of anti-dumping cases initiated against [link widoczny dla zalogowanych] Indian exports.
The countries prominently figuring in the anti-dumping investigations by India are China PR, EU, Chinese Taipei, Korea RP, Japan, USA, Singapore, Indonesia, Thailand, Russia etc. Investigations were carried in 188 cases from various sectors like Chemicals and Petrochemicals, Pharmaceuticals, Textiles, Steel and other materials, Consumer goods etc. involving 35 countries/ territories.
Dumping takes place when a company sells goods at a lower price in the foreign market [link widoczny dla zalogowanych] then the price it charges in its domestic market. This is an unfair trade practice which can have a distorted effect on international trade.
Indian exports are also facing number of anti-subsidy cases by other member countries of WTO. EU, USA and South Africa account for 83% of the anti-subsidy cases initiated against Indian exports.
Members may challenge the imposition of anti-dumping measures, in some cases may challenge the imposition of preliminary anti-dumping measures, and can raise all issues of compliance with the requirements of the Agreement, before a panel established under the DSU.
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However, in [link widoczny dla zalogowanych] order to take anti-dumping action, anti-dumping authorities have to show that dumping is taking [link widoczny dla zalogowanych] place, calculate the extent of dumping, and show that dumping is causing injury or threatening to do so to the domestic [link widoczny dla zalogowanych] industries.
Extensive investigation against any country is required to be terminated if the volume of the dumped imports, actual or potential, from a particular country accounts for less than 3% of the total imports provided the cumulative imports from all those countries who individually [link widoczny dla zalogowanych] account for less than 3%, are not more than 7%.
There is nothing inherently illegal about dumping as long as it does not cause material injury to domestic industries. However, when dumping causes or threatens to cause material injury to the domestic industry, the anti-dumping authorities initiate necessary action for investigations and subsequent imposition of anti-dumping duties.
Furthermore, it is imperative to prove that the dumping has caused injury to the domestic industry.
Apart from dumping, some of the countries also resort to subsidization of [link widoczny dla zalogowanych] their exports to other countries. Export subsidies, under the WTO agreement, are treated as unfair trade practice and such subsidies are actionable by way of levy of anti-subsidy countervailing duty. However such duties can be levied only if preliminary investigations have established that subsidization is actually taking place.