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Anti Uumping and 3afeguard Uuty

1eam Members:
Pradeep Naidu Rajana (27037)
Balakumaran kamaraj (27065)
Mitran Ashok (27091)
Leander P Rayen (27087)
II a company exports a product at a price lower than the price it normally
charges on its own home market, it is said to be 'dumping the product.
The WTO agreement does not pass judgement. However, its Iocus is on
how governments can or cannot react to dumping it disciplines anti-
dumping actions, and it is oIten called the 'Anti-dumping Agreement.
What is Dumping ?
1he llrsL AnLldumplng law Canada 1904
AnLldumplng and Lhe CA11 1947 ArLlcle vl
kennedy 8ound AnLldumplng code (1964 1967)
lndusLrlal producLs wheaL
1okyo 8ound AnLldumplng code 1973
non Larlff barrlers ln non agrlculLural Lrade
uruguay 8ound AnLldumplng code 1986
enforceable Lradlng rules W1C
ORIGIN OF ANTI - DUMPING
DUMPING MARGIN
In a simple example it is the amount by which the normal value oI the goods exceeds the
export price. i.e., the dumping margin equals the normal value minus the export price.
In mathematical terms:
DM NV - EP
Or iI expressed as a percentage:
DM (NV - EP)/EP
ANTI-DUMPING INITIATIONS: BY EXPORTING COUNTRY
01/01/1995 - 31/12/2010
ANTI-DUMPING INITIATIONS: BY SECTOR
01/01/1995 - 31/12/2010
ANTI DUMPING - INDIAN PERSPECTIVE
1he 0eneral Agreement on 1ariffs and 1rade(0A11) lays down the
prinoiples to be followed by the member oountries
lndian laws were amended with effeot from 1.1.95 to bring them in line
with the provisions of the respeotive 0A11 agreements.
3eotions 9A, 9B and 9C of the Customs 1ariff Aot, 1975 as amended in
1995 and the Customs 1ariff Rules, 1995 framed there under form the
legal basis for anti-dumping lnvestigations and for the levy of anti-dumping
duties.
lnvestigations and Reoommendations by Uesignated authority, Ministry of
oommeroe
lmposition and Colleotion by Ministry of linanoe
DETERMINATION OF DUMPING
Normal value
Comparable prioe at whioh goods under oomplaint is sold in the
domestio market of exporting oountry.
lf normal value oan not be determined by means of domestio sales,
following methods are used:
Comparable representative export prioe to an appropriate third
oountry
Cost of produotion in the oountry of origin with reasonable addition
for administrative, selling and general oosts and for profits
DETERMINATION OF DUMPING
xport prioe
1he export prioe of goods imported into lndia is the prioe paid or
payable for the goods by the first independent buyer
what is dumping?
Normal value in the exporting market > xport Prioe
Like Artioles
Anti-dumping aotion oan be taken only when there is an lndian
industry whioh produoes like artioles" when oompared to the allegedly
dumped imported goods
INJURY TO THE DOMESTIC INDUSTRY
lndustry must show that dumped imports are oausing or are threatening
to oause material injury to the 'domestio industry'
lnjury Analysis
volume effeot: Authority examines inorease in volume or likely
inorease in volume of dumped imports
Prioe effeot: xamines extent to whioh imports are oausing prioe
depression or preventing prioe inorease
Causal link
A 'oausal link' must exist between the material injury being suffered
by the industry and the dumped imports.
ln addition, other injury oauses have to be investigated so that they
are not attributed to dumping
HO CAN FILE AN APPLICATION
A dumping investigation oan normally be initiated only upon reoeipt of a
written applioation by or on behalf of the Uomestio lndustry
3hould be supported by produoers with produotion > 25
More than 50 produotion by those supporting and those opposing the
applioation
Anti Uumping Uuties
Lesser Uuty rule: 0nly that amount of duty whioh is suffioient to
remove the injury to the domestio industry
Any exporter whose margin of dumping is less than 2 of the export
prioe shall be exoluded from the purview of anti-dumping duties.
lf the volume of the dumped imports from that partioular souroe are
found to be below 3 of the total imports, it has to be exoluded.
ReIief to the domestic industry
INVESTIGATION PROCESS
Preliminary soreening
3orutinized for dooumentation and suffioient evidenoe for
investigation
lf evidenoe is not adequate, defioienoy letter is usually issued with in
20days.
lnitiation
Publio notioe is issued initiating investigation
Notifies diplomatio representatives of the government of exporting
oountry
lnitiation notioe is issued normally with in 45 days of reoeipt of
applioation
Aooess to information
1he Authority provides aooess to the non-oonfidential evidenoe
presented to it by various interested parties
INVESTIGATION PROCESS
Preliminary findings
A provisional duty not exoeeding the margin of dumping may be
imposed by the Central 0overnment
1he provisional duty oan be imposed only after the expiry of 60 days
from the date of initiation of investigation.
1he provisional duty will remain in foroe only for a period not
exoeeding 6 months
0ral evidenoe
0pportunity to present information orally.
lt has to be reproduoed in writing for oonsideration.
linal determination
Normally made within 150 days of the date of preliminary
determination.
INVESTIGATION PROCESS
1ime limit for investigation
0ne year from date of initiation of investigation
Central government oan extend it further by 6 months
1ermination
lf requested by domestio industry at whose instanoe investigation
was initiated
when there is no suffioient evidenoe of dumping or injury
lf the margin of dumping is less than 2 of the export prioe
1he volume of dumped imports from a oountry is less than 3 of the
total imports of the like artiole
lnjury is negligible
OTHER PROVISIONS
Review
Anti dumping duty will be in effeot for 5 years unless revoked
1ime to time review
Appeal
Appeal against oan be filed with Customs, xoise and 0old Appellate
1ribunal within 90 days of the date of the order.
Refund of duty
lf final anti dumping duty > provision duty already imposed and
oolleoted, differenoe shall not be oolleoted
lf the final anti-dumping duty < the provisional duty already imposed
and oolleoted, the differenoe shall be refunded
lf the provisional duty is withdrawn based on a negative final finding,
then the provisional duty already oolleoted shall be refunded
SAFEGUARD
3afeguard is used to restrain international trade in order to proteot a oertain
home industry from foreign oompetition.
A member may take a safeguard" aotion (e.g. restriot importation of a
produot temporarily) to proteot a speoifio domestio industry from an
inorease in imports of any produot whioh is oausing, or whioh is threatening
to oause, serious injury to the domestio industry that produoes like or
direotly oompetitive produots.
unlike anti-dumping and anti-subsidy, 3afeguards oarry no suoh aoousation
that the oompetition is unfair.
NEED FOR SAFEGUARD
3afeguards are designed to proteot oountries from unforeseen surges in imports
that oause or threaten to oause serious injury to the domestio industry.
EY PRINCIPLES OF SAFEGUARD
3afeguard measures must be temporary.
3afeguards must be imposed only when the imports are found to oause or
threaten serious injury to oompeting domestio industry.
1hey are applied to imports from all souroes on a non-seleotive basis and are
progressively liberalized while in effeot.
Member imposing them may be required to oompensate the Members whose
trade is affeoted.
NITIAL CHALLENGES FACED
0overnments preferred to proteot their domestio industries through grey area"
measures using bilateral negotiations outside 0A11's(0eneral Agreement on
1ariffs and 1rade) auspioes, they persuaded exporting oountries to restrain
exports voluntarily" or to agree to other means of sharing markets.
Agreements of this kind were reaohed for a wide range of produots:
automobiles, steel, and semioonduotors, for example.
SALIENT POINTS IN THE IMPLEMENTATION OF
SAFEGUARD
lndustries or oompanies may request safeguard aotion by their government.
1he w10 agreement sets out requirements for safeguard investigations by national
authorities. 1he emphasis is on transparenoy and on following established rules and
praotioes avoiding arbitrary methods.
1he authorities oonduoting investigations have to announoe publioly when hearings
are to take plaoe and provide other appropriate means for interested parties to
present evidenoe.
1he evidenoe must inolude arguments on whether a measure is in the publio
interest.
Assess whether serious injury" is being oaused or threatened. 3erious injury" is
defined as a signifioant overall impairment in the position of a domestio industry. ln
determining whether serious injury is present, investigating authorities are to
evaluate all relevant faotors having a bearing on the oondition of the industry.
SALIENT POINTS IN THE IMPLEMENTATION OF
SAFEGUARD
laotors that must be oonsidered in determining the impaot of imports on the domestio
industry are the absolute and relative rate and amount of inorease in imports, the market
share taken by the inoreased imports, as well as ohanges in level of sales, produotion,
produotivity, oapaoity, utilization, profits and losses, and employment of the domestio
industry.
when imposed, a safeguard measure should be applied only to the extent neoessary to
prevent or remedy serious injury and to help the industry oonoerned to adjust
where quantitative restriotions (quotas) are imposed, they normally should not reduoe the
quantities of imports below the annual average for the last three representative years for
whioh statistios are available, unless olear justifioation is given that a different level is
neoessary to prevent or remedy serious injury.
ln prinoiple, safeguard measures oannot be targeted at imports from a partioular oountry.
A safeguard measure should not last more than four years, although this oan be extended
up to eight years, subjeot to a determination by oompetent national authorities that the
measure is needed and that there is evidenoe the industry is adjusting.
SALIENT POINTS IN THE IMPLEMENTATION OF
SAFEGUARD
Measures imposed for more than a year must be progressively liberalized.
when a oountry restriots imports in order to safeguard its domestio produoers, in prinoiple it
must give something in return.
1he agreement says the exporting oountry (or exporting oountries) oan seek oompensation
through oonsultations. lf no agreement is reaohed the exporting oountry oan retaliate by taking
equivalent aotion for instanoe, it oan raise tariffs on exports from the oountry that is enforoing
the safeguard measure. ln some oiroumstanoes, the exporting oountry has to wait for three
years after the safeguard measure was introduoed before it oan retaliate in this way
1o some extent developing oountries' exports are shielded from safeguard aotions. An importing
oountry oan only apply a safeguard measure to a produot from a developing oountry if the
developing oountry is supplying more than 3 of the imports of that produot, or if developing
oountry members with less than 3 import share oolleotively aooount for more than 9 of total
imports of the produot oonoerned.
1he w10's 3afeguards Committee oversees the operation of the agreement and is responsible
for the surveillanoe of members' oommitments. 0overnments have to report eaoh phase of a
safeguard investigation and related deoision-making, and the oommittee reviews these reports.
SAFEGUARD INITIATIONS BY REPORTING MEMBER
SAFEGUARD INITIATIONS BY SECTOR
BENEFITS DERIVED FROM SAFEGUARD
Proteoting a speoifio domestio industry from unforeseen surges in
imports of any produot whioh is oausing, or whioh is threatening to
oause, serious injury to the domestio industry that produoes like or
direotly oompetitive produots.
IMPORT OF SPORTS SHOES FROM CHINA
lnvestigation initiated based on prima-faoie evidenoe.
Uetails of import of goods for the past 3 yrs inoluding P0l from CBC.
uestionnaire sent to a list of exporters in the subjeot oountry and importers.
M/s Reebok lndia Company
M/s Bata lndia Ltd.
M/s Adidas lndia 1rading Pvt. Ltd.
M/s Alishan lndia Ltd.
EXPORTERS LIST
M/s Beijing Uaihua 0roup, Beijing, China
M/s 1ianjin wuqing angang 3hoe laotor, 1ianjin, China
M/s Anshan 1ongxu Rubber Plant, Liaoning, China
M/s 1ilin elong 3ports 3hoes laotory, 1ilin, China
M/s Pote (Xiamen)3hoe Co. Ltd., lujian, China
M/s wuzhou Rubber Plant, 0uangxi, China
M/s 3hanghai uoju 3hoe lndustrial Co. Ltd., 3hanghai, China
M/s 1iazhou 1ialan 3hoes lndustrial Co. Ltd., Lhejiang, China
M/s 1iazhou Beili 3hoes lndustrial Co. Ltd. Lhejiang, China
M/s 1ianjin Xinli 3hoe Co. Ltd., 1ianjin, China
Response to the questionnaire was not filed by any exporters.
Bata and Reebok filed the responses.
lnformation on injury to the domestio market was oolleoted.
Market share deolined from 74.09 to 57.81.
lnports from China inoreased from 4.68 lakh pairs to 5.7 lakh pairs.
lmports being routed through ong Kong and 3ingapore.
1he produotion of domestio industry deolined by 11.24.
ANTI - DUMPING : CASE
ANTI - DUMPING : CASE
xport of garlio from China to North Amerioan oounties.
China widgets oase.
lmport of oompaot disos reoordable from China, 3ingapore and ong kong.
ANTI - DUMPING INVESTIGATION
lnvestigations to end in oases where :
Margin of dumping is small.(less than 2 of export prioe).
when the value of dumped goods is negligible.
volume from one oountry is less than 3 of the total imports of that produot.
Note: lnvestigations oan prooeed if several oountries eaoh aooounting for
less than 3 of the imports, together aooount for more than 7 of the
imports
THAN YOU !!!