anti dumping 9 final

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Presentation Outline:Meaning of Dumping Dumping margin What is protectionism Anti-dumping Article VI of GATT 1994 Anti-dumping investigation Anti-dumping measures Why did anti-dumping investigation also considered as the protectionist measure Anti-dumping action on behalf of a third country Analogues country rules Normal value rules Conclusion

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Anti-Dumping Legislation as a form of Protectionism :

Anti-Dumping Legislation as a form of Protectionism SUBMITTED BY: Madhavi Gautam 039

Presentation Outline:

Presentation Outline Meaning of Dumping Dumping margin What is protectionism Anti-dumping Article VI of GATT 1994 Anti-dumping investigation Anti-dumping measures Why did anti-dumping investigation also considered as the protectionist measure Anti-dumping action on behalf of a third country Analogues country rules Normal value rules Conclusion

Dumping:

Dumping In economics, “dumping” can refer to any kind of predatory pricing ( selling at an unfairly low price) Predatory pricing Domestic firms selling at lower price in home market In the context of international trade law, the act of manufacturer/firm in one country exporting a product to another country at price which is either below the price it charge in its home market or is below its cost of production. Dumping Foreign firm selling at lower price in other country

Dumping: When:

Dumping: When Export price Normal value Comparable domestic price Export price to a third country Cost of production plus a reasonable addition for selling cost and profit

Dumping Margin :

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. Normal value Exporter price Example – Rs 150 Example – Rs 100 Difference Attributable to Dumping Rs 50 Dumping margin Difference Attributable to Dumping/exporter price is Rs 50

Dumping – Effect/Implications:

Dumping – Effect/Implications Dumping can harm the domestic industry by reducing its sales volume and market shares, as well as its sales prices. Result Decline in profitability Leads to Job losses Hurts the market shares Cause material injury Impacts the sales volumes In worst cases, domestic industry going out of business

China - World’s Top Dumping Offender:

China - World’s Top Dumping Offender No market economy status!!! An economy that relies chiefly on market forces to allocate goods and resources and to determine prices.

What is Protectionism?:

What is Protectionism? Any measure designed to give local producers of good or service an advantage over a foreign competitor.

Arguments for Protectionism:

Arguments for Protectionism There are many arguments for protecting local producer and industries. These include: Protecting domestic Employment Protecting the economy from Low-Cost Labour Protecting an infant (sunrise) industry To avoid the risks of over-specialization Strategic reason To prevent dumping

How did it all Begin?:

How did it all Begin? In 19 th century European sugar industries appealed to their respective governments for protection against sugar being dumped at unfairly low price. Canada adopted the first Anti-dumping law in 1904. Australia (1906), New Zealand (1905), South Africa and Great Britain (1921) followed shortly thereafter. The US adopted its first Anti-dumping law in 1916. 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 members; they were open to signature by those countries that wish to do so. But the Uruguay round, (1986-94) anti-dumping agreement is an agreement binding on all GATT or WTO members.

What is Anti- Dumping?:

What is Anti- Dumping? 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 is permitted by the WTO.

Anti - Dumping Investigation:

Anti - Dumping Investigation The investigation will examine whether: Dumping is taking place from the country/countries concerned, Material injury has been suffered by the domestic industry, There is injury to domestic market, It is not against the economic interests of the countries.

Anti- Dumping Measures:

Anti- Dumping Measures Anti-dumping measures are unilateral remedies applied by a member after; Investigation of dumping Determination of injury to the domestic industry caused by dumped imports The very purpose of anti-dumping measures is to prop up domestic producers Anti-dumping measures must expire five years after the date of imposition, unless an investigation shows that ending the measure would lead to injury. Why its needed? Trade is increasingly being seen as a means of achieving economic development Trade liberalization also implies distortion and exploitation, which is unfair. To reduce such distortion protectionary measures are available to counter act these unfair practices

Why Anti-Dumping Investigation also considered as the Protectionist Measure?:

Why Anti-Dumping Investigation also considered as the Protectionist Measure? Protectionist is defined as an effort imposed by the country to help its domestic trade in global trade competition or deliberative use of policy barriers or regulations to assist local industries or to promote export Protectionist has two broad objectives to be achieved, namely providing visible and immediate relief to industries which are experiencing difficulties; and allowing ongoing adjustment to change circumstances. These objective correspond to an employment and social equity concern, and on the other hand to promote greater economic efficiency and industrial restructuring. By reducing import, protection seek to raise the market share of domestic producers and the price they received for their goods. Greater output and profitability in the domestic industry is presumed to increase employment and promote modernization .

Analogues Country Rules :

Analogues Country Rules Legal analysis Article 2(7) of the Regulation lays down the rules concerning the selection of the analogue country. The analogues country shall be chosen in a appropriate and reasonable manner with due account taken for any reliable information made available at the time of the selection. A third country market economy which is subject to the same investigation is to be used and account shall also be taken of the time limit.

Criteria for Selection of an Analogue Country:

Criteria for Selection of an Analogue Country Representation of domestic sales to independent customers in the reference country as compared to exports of the product concerned originating in the non-market economy country. Comparability of access to raw materials, components and energy in the non-market economy country and in the reference country

Normal Value Rules:

Normal Value Rules Once the analogue market country has been selected, normal value must be determined on the basis of one of the following exhaustive list of calculation methods set out in Article 2(7) of the Basic Regulation: Domestic prices of the like product in the analogue country Constructed prices of the like product in the analogue country The export price of the analogue country

Conclusion :

Conclusion Antidumping is by far the most prevalent instrument for imposing new import restrictions. Further it also showing that current GATT consistent antidumping laws have a strong protectionist rift, and as such, endanger the international trade system based on GATT rules.

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