Anti dumping a tool of protectionism

1. By – Group 2
1. Aditya
2. Debangshu
3. Kiran Kumar
4. Manikandan
5. Sandra

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.  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. 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.  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.  Affects the operation of the domestic manufacturers
 Job losses and unemployment in the long run
 Affects trade relations between countries

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

10.  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.

11.  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.

12.  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.

13. 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.

14.  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.

15.  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

16.  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.

17.  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.

18. Source: WTO Secretariat, Rules Division Anti-dumping Database

19.  Prevents Monopolies
 Protects Vulnerable Industries
 Allows Firms to Compete
 Preserves Jobs

20. 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

21.  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

22.  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.