The first sur relates to the devisiton in the definition of dumping, low and in peacuce. The type of dumping that ts met penmessible und the anti-dumping law is predatory dumping To be a predator. 3} pricing. Predatory practice of chazging lest than the marginal cost af production in onder drive competion: aut of business so that the prine-cuter can themeaft muse ats proce bevel and recoup tes Inwses. Thus, the primary assump tauderying the definition of predatory urpingsnSer te stump! amonopelist (alisieathcide pasa: levee ek puiceunenacs mscaepcmas duaespeiegg Serpette by eee te See eae ae he ee (primary charscterstic af an alleged dumper. Al foreagn fire z ‘considered to be damping if it sells merchandise ina country below Ft ‘market value, which i the average peice of the product ia it hon Tmarket or, if bower, the cost of producing the product The causal between dumping margin and material injury must alsa be verified. * ‘surge in import: andior a fall in the market share of the affrot (Gormestic firms are sufficient to. justefy material mnpary. What hts meat ‘is that market condations and competiigan structure of both the albeg: dumper and domestic producers are not scrutinised or taken into accom (in the peocecuere at ill. ' ' ad 1 The secani meme of comcem is that pablic interest as ether agin or taken Into account, but wath a very minimum effect in the anip, dumping duty determinsiion procedure. Public interest ix defined |- pinchade consumer and intermediate users, and in some coumiries tt Unterpreted to include domestic producers as well. If duenpang ‘hur, domestic producers, the anti-dumping duty on the other hand affect: 'oommumers and intermediate msers. It is ctherefoce amperatnce to assess tf ‘umpact of the duty on the public befare tt is imposed, but, both the WT ‘Act dumping Code and doeestc Jaws on antidumping in most af a WTO member countries do not have amy specific clause om publ taterest. This clearly indicates that the beneficiary of antt-iuming doom gna Mesiinlic: pacicara: Pa Tims. the antichamping law appears to be biased in favour &¢ (domestic: producers at the expense of consumers and intermediate uses 1WTO Anti Dumping Duty Determination: A Malaysian Case 6 Thus, many writers have suggested a review of the law by incomorating, these two pertinent isues to enoure equitable gain to all agents of the economy. The objectve af this paper & to evaluate these two conpems tn the context of the Malaysian economy. 2. HISTORY OF ANTLDUMPING ‘The practice of dumping can be very much perceived as the reflection of as early as the 19 century. Dumping ts defined as the export af goods for an unfairly Jow proce, defined eather as below the prine im the exporter's home market or below some definunion of cost”. The ferct law to target dumping & the Canadian Amt Dumping Act 1904. Aithough a few countries did the same shortly after 1004. st was only in 12] when the UK enacted tts anti-dumping legislation that other najar trading, nations, including the US, follewed suat by putting more compechenstve: anti-dumping Jegtdatiom in place {ihe first separate US amti-cumping, legislation was enacted in the same year. Interestingly when the General Agreement on Tariffs and Trade (GATT) 147 was conchided, the issue of antichumping was not seiausly raised although there ts a specific jwrovisian amp of GATT (the Antt-Dumping Code) came into being in the Kennedy Round. The Code contained substantive rules such as determinations of dumping and injury. as well as procedural requirements such = SnItlation and conduct of investigations and Imposition of the necessary measures. The Code went through considerable changes in 1879 threagh the Tokyo Round and also an 1994 through the Unguay Round. The Unsguay Code is the latest and the main suurce of anti-dumping law i the WTO era. Tt ts important to mote that the use of amtl-cumping bas increased tremendously since the Tokyo Round. The increase i characterised by the growing number of anti-dumping cases and the countnes involved, both developed and developing, * Soo Winecs, E968, p26. ® Sen Deandortt, 197. p. 28.a Journal of Econami: Conperation 3. THE MALAYSIAN SYSTEM The Iw on anit-dumping has been tn fx Malaysia since the enactment of the Customs (Dumping and Mend Gene tae (CDSO). it wos modelled after the UK Customs Daties (Dumping and ‘Subsictes) Act 1957 which was a legal response to Arucle VI of the Genera! Agreement on Tariffs and Trade (GATT) 1347. The CDS was repealed by a new state — the Countervatling and Ami-Dumping Duties Act 1993 (CADDA) Apagt from kesging up with the changes: resulting from the Uruguay Round (and the previous rounds as well), the 1983 Act was introduced to overcome the problers of implementing the 1959 Ordinance. The Ordinance was never implemented because st dad not have a specific provision on the causal link between the cumping, and the injury carved te the a eee a cain We CAN c place, the prblem was sofved due to the clear rules on cauxality, Adminstration of the law was also a problem because under the (COSO, an anti-dumping duty was clasified ax a customs duty which was to be determined and collected by the Finance Mintstry through its Customs Department”. Since anti-dumping has long and complicated thee was a need to entrust the admminesration of anti- dumping law to a more specialised agency. Thus under the CADDA, most of the administrative aspects of anti-dumping arc dealt wih by a specialised unit under the Ministry of Internatianal Trade and Industry (MIND. The acpect: include determination of dumping and myry, Sautittion and conduct of investigations and imposition a measures. Bui the power to collect the duites ts still with the Finance CADDA was amenied in 1998. Like the CDSO, enacted: before the first antidumping code come into being, the CADDA. was promulgated before the Uruguay Round was concluded, te in 1894. Substantial amendenents were made to CADDA tn order to be: compatible with the 1984 Limguay Ant Dumping Code. The changes, among others, cover the definitions and basic principles, investigations and general admamisiratzan, 7 Dewan Wakyat Matzysia (Mabydian Hose of Repreeatatives), Debate am Coumarvtily a asap Dass Bl, Paya Wan waa ge 8, Pactiman Kedapan, Pongal Pertama, 1953, 208-222. pp 220-21.6 Journal of Economic Cooperation ‘the final duty is imposed)‘, But there are two stages of anti-dumping determinations — preliminary snd final. At the end of the preliminary investigation, provisional measures can be imposed if there is an affirmative determination of dumping and injury. If after futher investigation, the findings of the preliminary determination are confirmed, an affirmative final determination is made ‘The suthority which is responsible for imposing anti-dumping duties is the anti-dumping authority’tribunal of 2 particular county which is normally the country’s trade authoriry/ministry. The dury collected is im the form of customs duty. Therefore a distinction must be made between customs duties which are the product of the anti-dumping procedure and of dury cannot exceed the amount of dumping margin which is equivalent to the smount of normal value subtracted from the amount of ‘export price of like products Any pary thst disagrees with the findings of the investigating review. This process is vital because it helps am interested party that is affected by the decision of the authority to protect its interests via the courts. The lifespan of a duty is supposed to be 5 years (sunset provision). But if there is s review of the dury and, at the end of the 5 ‘years, dumping and injury are found to be still in place, the duty may be renewed for another 5 years. 5. TREND IN ANTI-DUMPING INITIATIONS: (Chart 1 shows that the overall rend of anti-dumping initistions is clearly upward, particularly since the Uruguay Round agreements were sizned- more than doubling from 157 in 1995 to 300 im 2002. Wire (2001) reported that, from 1916 to 1970, there were only 800 such cases in the ‘United States, or about 15 cases a year. In the 1970s, the average per year was 23, which then increased sharply to 139 cases a year in the 180s. In the 1990s, anti-dumping use grew im the early years but declined around the time that the WTO was created. However, the latter “Tn onder to minimise the madedisruptive effect of investigations. Article 5.10 of GATT specifies that investizations should be completed within ene year and in no (case more than 18 months, after initiation However, the time frame specified under ‘Malaysia's anti-cumping investigation process is omch shorter. ie. about 2140 days.6B Journal of Economic Cooperation European Union (267}. Other developing coumtnes that have active used the anti-dumping measure were Argentina, South Afries, Braz Mexico, South Keres, Turkey, China and Indonesia (see Table 1). Table 1. Anti-Dumping Initiations (Reporting Countries) from January 1, 1998 to December 31, 2002 ‘Country isss| 1996] iee7 | 1998[ 1995[ 000] Foor] F002 | Tat Hadi es) 2, is] a7] =| 21) =] so] 33 US TH] =] | se) 2) =| v8] 35[ 2 =o ==] ai, a2) os] 2a] 29] 20| 26 Argennes arp =] is? sf 2] 45[ 2s] i4[ 1: “Ausealis =) ml] #3[ 3] 2[ a) 23] ts] 15 South Atica is[ is] 2s[ ai[ asf 21] «| 4[ « Canada ut s| 1] => is] 21[ 25] 3[ 1 Brak s> > ul if il up] es, 1 ‘Mexico a4 s> BP uy 77 3s] ml: ‘ores e- sf m> sf «| 3, 4] 9] 3 Tukey, oy oe; 4) if 8] 7) ms] my 3 China. PR WA; NA[NA[ Wal o[ s[ i] s0- 3 Tndonesia, oD uy ss, 8/ ml 3/4) 3] 4 ‘New Zealand wey =| ss) 1) 4] to] a] 3| 3 Esyet BD er a) eet EP sy Thawand op 1, >, of o| of =| a] 2 ‘Malaysia spa) 8] if] 2) os, af) sf a ‘Chinese Taipei of oe, o[ of of =, 3] o Tapas of oe, of of of of 2] o Foral iar [sas [a3 [ 254 [ s568[ a72 | a0] aes [as ‘Source: Based on dais irom niew ain arglengliukinasp_aiap_aamabi_alom The countries which have been the main initiators of anti-dumpi investigation: im the year 1995 and 2002 are shown in Table 2. Betwe those two years, only the EU, Canada and New Zealand have reduc the number of anti-dumping initiations. Other countries have actual increased their anti-dumping activities significantly. The most obvio development is that India became the heaviest user of the measure 2002, taking over from the EU in 1995.WTO Anti-Dumping Duty Determination: A Malaysian Case oo Table 2, Top Ten Users of Anti-Dumping Measures, 199% and 19s, 2002 Country ‘Na. of Cases Country No. of Cases T_ [ev 33, T__[india’ 0 2. | Argent 27 3 [us 35, 3._[ South Asica 1s 3__| Chima PEL 30 [os Tz =| Thailand 31 3. Canada iL 3__[eu 20 6._[ New Zealand 17) 6. | Turkey 17 T_[ india o 7__| Austral TS S| Australia = ¢__| Argentina 1 9 [Brazil = 9 [ Pera’ 1 To. | Mewco = TO] Mexico To i i China was the most targeted country of anti-dumping investigations (see Table 3). The table shows that out of 1845 anti-dumping imvestigations initiated between 1995 and 2001, 255 cases were against China. Most of these cases were made by Argentina (36), Australia (13), the EU (36), the United States (33), India (48) and South Africa (49)’. industnal products, electic home appliances, and pharmaceuticals. South Korea wa: the second most targeted country with 138 measures on its exports during this period. This is followed by USA (102 cases}, Japan (79 cases), Indonesia (74 cases) and Thailand (71 cazes). Steel and chemical product: continue to dominate, together accounting for more than two-thirds of all global anti-dumping investigations (see Table 4). In 2001, the sectors most affected by anti- dumping actions have been base metals (37 per cent}, mostly steel, chemicals, plastics and rubber products (33 per cent), textiles and related products (10 per cent), mechanical engineering and appliances (7 per cant) and food and agriculture (4 per cent)". However, more than half of all active anti-dumping duties in developed counties target mature imdusties such as metal and chemical products. The US is the major initiator of anti-dumping cazes involving steel products, ie about 44 per cent of all investigations imvolve this sector. The Indian chemical industry is very active in seeking protection against imports of chemical 7 Taken from hmp//www wto.org/English/ratop_e/adp_stattabl_e bom. ® ‘Taken from Stevenson (2002).70 Joumal of Economic Cooperation products, involving 47 per cent of all investigations on the sector. Th constitutes more than 70 per cent of all Indian anti-dumpin investigations”. ‘Table 3. Anti-Dumping Initiations (Affected Countries) from January 1, 1995 to December 31, 2001 Country Toss] 1999, 2000[ 2001] Total Developed Countries US Be i [as er Tapa ts [= su Genmany = = ss UK z z a S| 36 EU a = s_[ 30 France To, = T 3 [30 Cama A a 1 7a [Belzer z i Ti ‘Australia z EI 4 T[ Ir ‘Aust a = = o [ib Developing Coun China PR Bap Ss> 7s Keres, Rep. sas Tadonssia sp» | [ip ‘Thailand 2 es [a is a India Ra ie a ‘South Amica 3 + s) iw] 3 Eras ep s > i [3 Russia fa [i 7 [a2 [Malaysia a 7 = s [35 Turkey z S 7 S35 Mexico A 4 T 3 [36 ‘SiMEADOTE, a 5 o | i [22 [Eze 2 o 1 3 [10 “Total measures berween 199: ‘Sous: Band on dam Som pum oto cri tesibbsip Sip Gaal sia The type of products that are subject to anti-dumping duties sprea from products such a: steel and sutomobiles to simple products like g: lighters. In 2001, the 330 imvestigations involved 138 differe: products". However. 2 significant number of investigations involve only 5 countries, ie. the USA, Canada, India, Brazil and the EU. * The source of this information is the same as in foomote 7. °© Stevenson. 2002.WTO Anti-Dumping Dury Determination: A Mslaysian Case 71 Table 4. AD Initiation: by Sector, 1999-2001 Sector 1999 2000 2001 (Chemicals, plastics, rubber products 316 27S 333, ‘Steel and metal products, 70 a7 a5 Textiles and related products TOS a2 BE Mechanical engineenng/appliances, 77 BS 7 ‘and wood products Ts 32 17 Food and aziculrare 32 aa a0 Others, TI 7 7 TOTAL 00.0 100.0 190.0 ‘Semmes: Stevenise (S002), 6. ANTL_DUMPING PRACTICE IN MALAYSIA Malaysia is not am active user of anti-dumping measures. There were only 22 initiations taken by the Malaysian government between 1995 and 2003 (see Table 5). This is very modest compared to initiations taken by the USA (308), India (44), EU (270), Argentina (180), Australia (156) and South Africa (162) within the same period. Table §, AD Initiations by Malaysia from 1/1/95 to 31/6/2003 1s9s | 1996 | 1997 | 199s | 1999 | 2000 | 2001 | 2002 | 2003 | Tot 3 2 & 1 2 0 1 5 o [| 2 Seas WTO aba, Table 6 indicates that about 60 per cent of the anti-dumping cases imvolve pulp and paper-related products. Other sector: that were affected were plastic and rubber-related products, chemical and allied products, and transport and equipment. The detail of the antidumping measures are presented in Table 7. ‘The duties imposed range from 0 percent (im thi: case, no additional duty will be imposed above the MFN or Association of Southeast Asia ‘Nation: (ASEAN) Common Effective Preferential Tanff (CEPT)'’ rate because no dumping i: found) to 186 per cent. Malaysia conforms to the sunset provision of five years, and if there are petitions by local " CEDT is am agreed effective tariff, preferential to ASEAN, to be applied to goods originating in ASEAN member states, and which have been identified for inclusion in the CEDT scheme in accordance with Articles 2(5) and 3.ad Journal of Economic Cooperation companies for an extension of AD duty. the whole investigation pro: for the verification of the existence of dumping will have to be car out again. Duty will be terminated if there are no petition: from k firms, or if imvestizations show that there is no proof of dumr activities by foreign suppliers. There are two cases where AD du were terminated, ie. PVC flooring and corrugated medium paper beth cases, local companies did not petition for an AD extens However, AD duties om self-copy papers imported from the EU Indonesia have been extended for another five years. In general. are net many case: of prolonged imposition of anti-dumping dutie Malaysia. This is im contrast to the practice in developed count where, in many instances, anti-dumping duties have been in place decades. It is not unusual, as in the European Union for example renew many anti-dumping measures after periodic reviews'”. Can has many anti-dumping measures which date back to the early eight even though it subscribes to a five-year sunset provision. The USA b more startling practice. Many existing anti-dumping measures date b to the sixties. This is mainly because there was no sunset provicio: the United States prior to the Uruguay Round'*_ Table 6. Sectoral Distribution of AD Initiations by Malaysia, ‘1995-2003 Number of AD Sector Subject to AD Measure Products of chemical or allied Indusmies Plastics amd articles thereof, rubber : articles thereof Pulp of wood or other Abrows cellule material; recovered (waste and scrap) pa or paperboard, paper and paperveard : articles thereof [Articles of stone, plaster, cement, acbeat 1 {mica or similar materials: ceramic prodm glass and glassware 5 (Welicles, aircraft, vessels and associa transport equipment 22 Total Source: WTO Webs. 13 © See Ani 1995. iidWTO Anti-Dumping Duty Determination: A Malaysian Case Table 7. Anti-dumping Dutie: on Import: to Malaysia Product 5 ‘Country and the D No | ate of Initiation) Date of Imposition Tapesed 16 March 1995 — . 1. | PVC Flooring 15 March 2001 pene (Terminated) EU Gre S72e6 ing Medium |3 4H 1998— Australia 11.07% 2. |Sormensng 2 April 2003 Tniienesia 07% -12.0% (Terminated) Rep. of Korea 173 35.45% 3. [Sat ceny Paper PD: 8 Oct 2002 EU O-iit * |@2 August 1896) | (Administrative Review) [Indonesia 0-257 ‘Self Copy Paper PD: 2 March 1999 4. |e pee 1908) FD: 15 July 1999 Japan 5.1% - 19.1% PlastenGypsuma 5._ [Board cid iow 1gem | PD: 15 Feb. 2000 [Thailand 27.1% - $3.¢ PRC and Hons g. |Bicveles PD: 20 September 2002 [Specl = Administ 23 April 2002) FD: 18 January 2003 Region of the PRC 11.83% - 186.09% (Canada 33.557% . Tadonesia 5.59% - 33. Newsprint 7 PD: 29 Fuly 2003 316 Geran [PP Seen Rep. of Karea 43.24% Source: Ministry of Intemational Trade and Industry (MITT), Malaysia. ‘Note. PD — Preimmary Determimaton. ‘FD — Final Determination. Between 1995 to 2003, most anti-dumping initiation: were dir against Thailand (5 case), followed by Indonesia (4 casex), Chi case), Chinese Taipei (1 case), Republic of Korea (4 cases), the E cases), Australia (1 case}, Poland (1 case), Simgapore (1 « Philippine: (1 case), USA (1 case) and Canada (1 case). OF initiations, final anti-dumping duties were only imposed on Thala cases), Indonesia (3 cases), China (1 case), Republic of Korea (3 c: the EU (2 cases), Australia (1 case), USA (1 case), Canada (1 case! the Philippines (1 case)'*_ ‘However, there were more case: targeted against Malaysian ex, ie 42 AD initiations resulting in antidumping duties between 199. “This information is based on data obtained from wow wts osJoumal of Economic Cooperation 3 Gune). The EU imitiated 10 cases against Malaysia, while atries that were involved are Australia (6 cases), India (5 cases), ca (5 cases), the United States (4 cases), Canada, China, Tuzke Republic of Korea (2 cases each), and one AD initiaton respec Thinese Taipei, Colombia, and Indonesia’*. The latest AD initi ently under investigation against Malaysia are by New Zealar arts of reinforcing steel bar and coil and galvanised wire"*. The s be anti-dumping duties imposed agaist Malaysian exports a: 2 of product that were affected are given in Table 8""_ Table 8. Anti-dumping Duties against Malaysian Exports, 2000-2003 et Deliniive Dati Country (Date of initiation) iets dad, ‘Sodtum Stearoyl Lactylate “Australia (28 tan 1897) 9 April 1996) (Reviewed in 200! 375 — 53.31% c Euuuded Rubber Teresa | Review: 16 March 1 SA (9 Augast 1991) PES = AD dunes te conn Coleus TV Raceners 75.176 Eurepean Union | (5 November 1992) Review on 29 July 2 39.87 Personal Fax Machines European Union, Tree ‘en G0 ABE 1995) 20-35% Rs.4360— 5648 pr Polystyrene india (16 September 1997) fers 1958). 10 February 2003 ‘Welded Stainless Steal 30% South Africa Tube & Pipe ‘Sunset Review (@3 May 2003) (I Jaly 1968) formation obtained from wow mito my. sails in this table may not respond to figures om anti-dumping iniciati alaysian exports which were given earlier in this paragraph because tt riod chosen is different. Information in Table 8 is the latest statistic: ailable by the Malaysian Ministry of Trade and Industry. and refers to cast 00 onwards. Meanwhile, the figures on AD initiations are fom the WIO w drefer to cases imitiated between 1995 and 2003.WTO Ann-Dumping Dury Determination: A Malaysian Case Table 8. Antidumping Dutie: against Malaysian Exports, 200 2003 (continued) Product fo Country (Date of imitiation) Stainless Steel Sinks 7. | South Attica erie bic AG 8. Ingia (22 April 1999) — Clear Float Glass a | Petes [oS Sepremner 199) on (Cold rolled colls and sheets | Philippines: ( October 1999) Polyethylene Terepthalate 1 | Ewopean Union | POUsEMene Tae ‘Stainless Steel Buit-Weld 2 USA, Pipe Fimings (31 January 3600) Ghphorate Acid ite 3. | European Union ‘Bmpesate A ean soon “Weven Fatncs of Syamene a Turkey Filament Yarn 3.23% - 15.23% (1 Noweniber 2000) (13 Fetraary 2002 he Partially Oriented Yam WSS 0464 par ke (10 November 2000) (4 January 2002) ; “insert Ring Binders Ts 2 = Australia (22 November 2000) (13 June 2001) Centain Tube and Pipe ‘BH Fab 3007 7.| European Union | Fines, of Iron or Steel FD: 24 Aug 2002 (1 June 2001) 9.2% - 75%) BD: 16 Tan 3007 Polyester Staple Filses & ads (25 Fume 2001) ‘People’s ue E | regbicse | GRRE Sn (10 April 2003) BD: 30.66%. 24.71%, © Acyclic Alcohols 37.03% 7 tadis (GI January 2002) 29 uy 2002) NOEF: (-4 09% - 15.42%) ‘Uncoated Waiting and tndonesia ‘Printing Paper ‘Under Investigation (10 February 2003) : ‘Calcium Carbide Fim Say 2 | Tones (24 fume 2002), 16.75076 Journal of Economic Cooperation Table 8. Antidumping Dutie: against Malaysian Exports, 2000-2003 (continued) Ne| Country (oats ot initiation, (Effective date) 23. | Auman | ER (iigostee nh “Under Investiganot a Turkey aces ‘Under Investigator . (14 Ape 2003) Pages = : cad ‘Republic of (14 Mary 2003) Under Investigation 26. USA. Seine sto ‘Under Inwestiation Bolyethiviene Rerail Carer com USA Blactic Bazs Under Investigation __ 6 Taly 2053) Raiorcing Steel Bar and as.| NewZealand Coil Under Investigation (23 Seprember 2005) 38. | New Zealand ES ‘Under Investigation <= Ministry of International Trade and Industry Balaysia 7. WHO BENEFITS FROM ANTLDUMPING?* Ais mentioned earlier, the type of dumping that is condemned by th is predatory dumping Dumping becomes predatory when the de importing country will benefit from anti-dumping because rt will t most effective means to offset such an unfair trade practice. In this the main beneficiary of anti-dumping is the domestic producers i importing country. Antidumping, however, may be detrimental to consumer: intermediate users if they have been benefiting from cheap import ™* Basically. this issue can be tackled from three different perspectives — the img country’s welfare. the exporting country’s welfare and the clobal welfare (all the impacts of antixtumping on the stated classes of welfare). But this pape ealy discuss the issue from the perspective of the importing coummy’s welfare.WTO Anti-Dumping Duty Determinstion- A Malaysian Case result of dumping. If the price remain: high permanently (where an dumping measure i: extended after the sunset penod), the con: competitiveness of production, which mean shat thay will evennually be diven © business. However, it is worth noting that consumers may be adve affected by predatory dumping in the long run if the foreign exp: aye able to assert control znd manipulate the market conditions i importing country, and if the dumping does not last as long as exp (Gotenmittent dumping), consumer: may also suffer due to the pretext that the price will go down. means that factories will have to close down or at least workers be retrenched, both of which are damaging to the industries’ workfon short, there are positive and negative effects of snti-dumpin domestic producers, consumers, intermediate users and workers i importing countries. Er is important to note that if anti-dumping is wsed to pi producers, the costs that consumers ittertuadiste aces in the nnpording country have to pay wil conauke other outweigh the benefits that accrue. Inefficiency is dumazi domestic producers (and workers) as they are not able to coz importing country, consumers and intermediate users will have to the consequences. ‘*For discussion om the impacts of anti-dumping om workers, see Huna Trabilrark TOGO78 Journal of Economic Cooperation 8. IS ANTI-DUMPING A PROTECTIONIST TOOL? The imposition of anti-dumping duties shielding the domestic mari from import competition often grants the orginally imjwed fi substantially more market power than before the import duties. In ma instances, it has a tendency to protect inefficient industry, particula industries that are not able to compete with foreign suppliers « potentially seeking to capture the market as a loopholes in the anti-dumping law, we find today that mt dup tnatneres are being popultsy wed by indnstris fo shield them 5 The law is now used to substitute for of] Hinds of Srotecabes! A qpeech by Eyan Bayh a senator of Indie State, USA, on September 12, 2000" is a testimony of how ar dumping ‘protect domestic interests: crisis, steel workers across my state were forced into early retirement, relegated to lesser jobs, required to absorb reductions in shifts, or simply laid off. My only answer to these hard working men and women and their families was that the uncertain state of their industry would not persist and that strict enforcement of the trade laws would provide anti-dumping and effects of unfusly traded imports concerning a variety of steel products”... ‘The authors of this paper were keen to know whether anti-dumpi initiated by Malaysia over a period of 8 years. This indicates the m © See Wirz, 2001. © bttp:/fwwwr senate, gov/—bayivPress/2000/12SEPO0pr btm.WTO Anti-Dumping Dury Determination: A Malaysian Case 7 use of this measure. But has it been used to protect local industry? In th past, this question has never been debated in the country. However. th latest anti-dumping initiation taken by the authorities on importe newsprint appears to be the only case that has caught public attentior and the contention that anti-dumping is being used as a policy tool t protect a local firm was brought into the limelight. (5.59-33.14 per cent), Republic of Korea (43.24 per cent), Philippine (B1.74 per cent) and the USA (39.20 per cent). Newsprint is pape manufactured from ground wood (virgin fibre) or mechanical pul (recycled content) meant specifically for the printing of newspapers a well as other printing materials such as magazines, workbook: Iclephone directories aad sn matenal for packing and wrapping. 1 Malaysia, there is only ome producer of newsprint. namely Malaysia jewsprint Industries Sendirian Berhad (MNT) which started commercia cponahon in ape 1995" Its plant in Mentakab, Pahang. has only on production ine with a Lmited anmual capacity of 250,000 tomes o . The estimated local consumpton need was 398,000 tonne in 2002. There has been an MFN import duty of 10 per cent an ASEAN CEPT rate of 5 per cent on newsprint import. However, dut exemptions werg, granted for the quantities that could not be supplied b local producers: Industry sources noted that local compames whic utilise 70 per cent or more of locally made newsprint will be entitled fo duty exemption of 5 percent”. So far, companies that have been grante: exemptions are New Straits Time, Sin Chew Jit Poh and China Press. ‘The newsprint industry is very competitive as imports come fron many comniries such as Japan, ‘Sweden, Belgium. China, Finland Germany, Netherlands, Thailand, Canada, Indonesia, the Philippine: Korea and the US. Tn 2002, Malaysia imported 208.050 tonnes o 2 MIDA (nd), “Brief on the Pulp and Paper Industry In Malaysia” 2 Agmul Azwar (2003), MIDF % Siu Samoa mportion ef aut-damping duties sabiices meoreprine peices ‘October 12, 2003. 2 This information was obtained from an interview.WTO Anti-Dumping Duty Determination: A Malaysian Case sense, aus chosping ay om impor i dil junfand iac policy tool to protect inefficient domestic industies e 9. PUBLIC INTEREST 2 An interesting controversy regarding anti-dumping measures iss welfare effect om consumers and intermediate users. It has been ar) that anti-dumping imposes a substantial burden on consumers, atl, considered to be a transfer of wealth from consumers to produce Janet Nuzum and David Rohr, Commissioners at the Intemational T ‘Commission (ITC), were reported as giving the following remark: D “it mmst be remembered that the purpose of the ant cumping and countervailing duty laws is not to protem consumers, but rather to protect producers. Inevitably, some cost is associated with this purpose. However, unlike th antitrust laws, which are dtspned to. protec consume interests, the fimction of anti-dumping and countervailing laws is, indeed, to protect fins and workers engaged ir production activities in the United States. So it should net come as a surprise that the economic benefits of the remedien accrue to producers. and the economic costs accrue to thy! consumers..."°° * & This, however, is in contrast to the preamble which states tha ¢ WTO should work “with a view to raising standards of living, ens full employment and a large and steadily growing volume of real ince and effective demand, and expanding the production of and tract goods and services while allowing for the optimal use of the wot resources..." Interestingly, both the WTO and domestic anti-dunaj not directly encompass the public interest elements int WTO preamble, so nmeh co that domestic producers seem to be the) beneficiaries of anti-dumping. Although the Anti-Dumping Code ¥ implement a provision of GATT (on dumping) and GATT’s prear echoes in the WTO's preamble, the legal structure of anti within the confines of determination and vestigation of dumping! ‘the imposition of the corresponding duties. * See Leclerc, 1999, © Taken from Araujo (2001). ™ Seenowe 18.Be Joumal ot Heonomic Leoperanon ‘Neither GATT nor the Anti-Dumping Code mentions a public it ‘This s Pfnraation and. participatory ight in neeesigation and reviews The Malaysian Anti-dumping law has a public interest clause, qwere not substantiated with adequate and reliable data and inform ‘This could be due to ignorance or a wait-and-see attitude (the af parties had the impression that the authority would be able to wit the AD duty later if they are injured after the imposition of the du firms i ‘the law, and if no evidence is submitted, they are unable to co unsubstantiated submissions. ‘What was the effect of the anti-dumping duty on newsprint « intermediate users? A few respondents argued that the AD @ imappropriate because low prices are due to a surplus in the mark: % amicle 6,12, Ant- Dumping Code.ng YS ame nyse per aren ang ee aEgam « ane 1 departure from narrow concentration on producer interests alone’ t n EU, the commumity interest clause was ‘as incor 3 essential in the area of anti-dumping law’. But im practice, iat ( significant constraints which must be given considerable attentionre 0 - - ma: ¢ Firstly, although the law provides for public }, Considered, the ant-dumping authorities in Canada and the EU: discretion to consider such interests and allow them to sI outcome of an anti-dumping proceeding. Secondly, im i i interests. ‘ig ae have been given strict interpretation by the respective anti-5, authorities. In Certain Flat Hot-Rolled Carbon and Alloy Ste Products Originating in or Exported from France, Romania, Ru Slovakia, the Canadian anti-dumping tribunal held that there ml’ n ial circumstances that necessitate a ci it f i © See the Canadian House of Commons Sub-Committee on Import Policfio, Report on the Special Import Measures Act, Issue No 31, 1" Sess., 32“! Parla, 9 fume 1982. See Paterson (1986: 125-126). Also see Trebilcock snd Howves)a, ° See the Flaventh Amual Report from the Commission to the European ca the Commmmiry’s Ant-Dumping and AntiSubsidy Activitie: COMP2)516. Also see Stanbrook and Beniley, p. 139. = ™ Stanbrock and Bentiey, p. 143. ia & Ses wunw oc.caldumpine/interesticonsider/pb9O001_e.asp a: © See Refined Sugar from the US, Denmark, Germany. Netherlands and te 3 Refined Sugar from she EU at in “mp www. cit-tece. 2c ca dumping Interest‘ CONSIDER /pt95002_€.857. sce note thet the former is an anti-dumping case while the latter is am anti-subsgq,WTO Ani-Dumping Duty Determination: A Malaysian Case on the other hand. it has been commented that the clause only apy exceptional cases and generally in response to political pressure**. Despite the constraints in the application of the public/com interest clause, it is the effective means to provide a limited ave: non-domestic producers to have their voices heard. In fact, ther indication that its practicality will be enhanced in the future. obvious from the policy statements prevailing in the EU and ¢ acknowledging the importance of considering the interests of the before the State takes any anti-dumping measures". 10. CONCLUSION In this paper, the authors highlight that there are two issues th: been overlooked in the determination of anti-dumping duty, nam definition of a dumper and the interests of consumers and intern users. As discussed earlier, the efficiency of the injured or the power of the injurer is not taken into account in doing the inju causal link test. This is not compatible with the very basis definition of a predator that justifies anti-dumping duty. It is, the important for the authorities to fime-nme the methodolo determining a dumper to reflect this basic principle. Attention 2 to be given to the variables used to determine material injury te misuse of the policy measure- There have been suggestions to inchade a public interest claux new Anti-dumping Code” to minimise the negative impacts c clause is beneficial to the whole importing country, there is no why it should not be beneficial to the domestic producers who shi of the importing country’s interests. It is when all intere: considered that the maximum welfare effect can be attained. *! See Stezemann, 1935, * See Stanbrook and Bentley, p. 142. 4° See Vermulst, 1997, p. 20 and Kmfuor, 1998, pp. 178-9.WTO Anti-Dumpinz Duty Determination: A Malaysian Case t m ~The Emerging WTO System and Perspective from East Asia"3q 1997. we Hutton S. and M. Trebileock, “An Empirical Study of the Applicat Canadian Anti-Dumping Laws: A Search for Normative Rati, ; m Kelly KH. and ME. Morize. o Causes of Inj a Competing Unfailly Traded Imports: 1989 to’ Economics. Federal Ti obtainabi www fie. gow/be/morkreintroch1 sat n set Kufuor KO. “The Developmg Counties and the GATT/WTO ‘Anti Dumping Law”. Journal of World Trade, 11 no.6, 1998, pp. 167-196. Leclere IML, 1999, “Reforming Antidumping Law: Balanc Interests of Consumers and Domestic Industries”, McGill Law - vol. 44, 1999, pp.111-140. Lloyd P. (Sorthcoming). Anti-dumping and Countervailing, Dit A Yada (ed). Encyclopaedia of Globalisation. Marceau, GZ., .Anfi-dumping and Antirust Issues in Free-trade Oxford: Clarendon Press, Oxford, 1994. Morke M. and K. Kelly. “Effects of Restrictions on Unitec 4 Imports: Five Case Studies and Theory”, Bureau of Economi* Report to the Federal Trade Commission, Washington D.C., ob“! from http: //wunw fic. gov, 1994. Niels G. and A. Kate, “Trusting Antitrust to Dump Anti-dr Abolishing Ant-dumping in Free Trade without Re it with Competition Law”, Journal of World Trade, vol. 31, no.y pp. 29-4. ci Paterson PK. Canadian Regulation of International Tra Investment, Carswell Publishing, Toronto. 1986. the early stapes of starting the anti Gumpine investigation. See Knfioor, 1998,