15-Oct-15

Content
BUS - 630

Key Concepts

Dumping and
anti-dumping06

Investigation

Review and refund

Calculations of Normal Value, Export Price and Dumping Margins

Quiz-04
Compiled by
Dr. Mutahir

Key Concepts

1. What is Dumping?
Article VI of GATT 1994:

1.
2.
3.
4.
5.
6.
7.
8.

DUMPING
NORMAL VALUE
EXPORT PRICE
DUMPING MARGIN
LIKE PRODUCTS
INJURY TO THE DOMESTIC INDUSTRY
CAUSAL LINK
INJURY MARGIN

A product is said to be dumped when its

export price is less than its normal value,
that is less than the sale of a like product
in the domestic market in the exporting
country.

Dumping
Dumping per se is not actionable.
Injury & Causal Link are required to be
proved

Types & reasons for dumping

Predatory dumping
is intended to drive out rivals.

Cyclical dumping
occurs during an industry downturn in demand, with sales below
average cost.

Seasonal dumping
unloads excess inventories, especially on products that are perishable or
going out of fashion.

15-Oct-15

Stakeholders

Types & reasons for dumping

Sporadic Dumping:

In Favor

Occasional sale of a commodity at below cost in order to unload an unforeseen

and temporary surplus of the commodity without having to reduce domestic
prices.

Persistent Dumping:
is international price discrimination, with the exporting firm facing a less elastic demand
curve in the home market, and having some way to limit or prevent reimport back into its
home market.
Continuous tendency of a domestic monopolist to maximize total profits by
selling the commodity at a higher price in the domestic market than
internationally (to meet the competition of foreign rivals).
For international price discrimination to take place, conditions must be
met:

Consumers
Exporters
WB/IMF
Economists
Regional Agreements
(NAFTA)

Against
Countries who want to
protect their domestic
market

Domestic and foreign markets must be separated.

Demand elasticity of the product must be different in two markets. The good can be sold with a lower
price where the demand elasticity is high; and with a higher price where demand elasticity is low.

2-Normal Value

3-Export Price

1. Domestic price in exporting country

Comparable Price of the like article when meant for some

consumption
or
The normal value is the comparable price at which the
goods under complaint are sold, in the ordinary course of
trade, in the domestic market of the exporting country or
territory.

Alternate:

Arms Length Transaction

(A transaction in which
the buyers and sellers of a product act independently and have no
relationship to each other.)

Resale price to an independent buyer

2. Export price to third countries

On a reasonable basis
3. Cost of production in the country of origin.

Plus Administration, Selling & General Costs.

Profits.

4-Dumping Margin
Difference between Normal Value and
Export Price is known as Margin of
Dumping.

5-Like Article
Identical- alike in all respects.
Although not alike in all respects. has
characteristics closely resembling those of
the product. UNDER CONSIDERATION

15-Oct-15

6-Injury

Actual - material injury

Injury Determination

Volume effect

Threat of material injury

Price effect

Material retardation to the establishment of

injury. an INDUSTRY

Combination of price and volume

INJURY - EVALUATION INDICATORS

To be determined on the basis of positive evidence

7-Causal Relationship

ACTUAL / POTENTIAL DECLINE IN

Sales
Output
Profits
Market share
Productivity
Return on investment
Capacity utilization
Employment
Inventory / stocks
Ability to raise capital or investment etc.

8-INJURY MARGIN
Difference between the fair selling price
and the landed value

Content

Key Concepts
Investigation

Landed value is
-- Assessable value under Customs Act
plus
-- Basic Customs Duty

Review and refund

Calculations of Normal Value, Export Price and Dumping Margins

Quiz-04

15-Oct-15

INVESTIGATION &
IMPOSITION OF DUTIES

Investigation Process
Finding out if material injury occurred

Initiation, Investigation & Recommendations

by Department of Commerce.
Imposition & Collection of anti dumping duty
and countervailing duty by Department of
Revenue, Ministry of Finance.

Establishing causal link between dumping

and material injury
Calculation of Margin of Dumping

Investigation Process
The national authorities cannot impose duties higher than the
margin of dumping.
The preliminary finding will normally be made within 150 days of the
date of initiation.
A provisional duty not exceeding the margin of dumping may be
imposed by the Central Government on the basis of the preliminary
finding.
The provisional duty can be imposed only after the expiry of 60 days
from the date of initiation of investigation.
The provisional duty will remain in force only for a period not
exceeding 6 months, extendable to 9 months under certain
circumstances.
An anti-dumping duty imposed under the Act shall have the effect for
5 years from the date of imposition, unless revoked earlier.

ADMINISTRATIVE REVIEW

Mid Term Review - after 1 year

Sunset Review - after 4th year
Review

Content

Key Concepts
Investigation

Review and refund

Calculations of Normal Value, Export Price and Dumping Margins

Quiz-04

Refund of Duty
If the anti-dumping duty, imposed on the basis of final
findings, is higher than the provisional duty already
imposed and collected then the difference shall not be
collected.
If the final anti-dumping duty is less than the provisional
duty already imposed and collected, the difference shall
be refunded.
If the provisional duty is withdrawn based on a negative
final finding, then the provisional duty already collected
shall be refunded.

15-Oct-15

Content

Key Concepts
Investigation

Calculations of Normal Value, Export

Price and Dumping Margins

Review and refund

Calculations of Normal Value, Export Price and Dumping Margins

Quiz-04

26

Export Sales during POI

Calculation of Export Price

Export price is a price actually paid or payable for an investigated product

when sold for export to Pakistan.

For the purposes of fair comparison (at ex-factory level) deduct following items
from export price:-

No. of
Sales

Invoice
Number

Client
ID

Date of Sale

Sales
Value
US$

Qty
(MT)
A

Gross
Unit
Price
US$

98016

7/1/2000

9800

19.0

515. 79

98017

11/1/2000

9684

20.0

484.20

98018

14/3/2000

9445

18.5

510.54

98019

17/4/2000

9339

19.5

478.92

98020

19/4/2000

9095

18.0

505.28

98021

30/4/2000

9000

19.0

473.68

98022

1/5/2000

8750

17.5

500.00

100 - 100(90/365)0.10 - 5 -20 -100 x 0.02

=100 - 2.46 - 5 20 2 = $ 70.54

98023

7/1/2000

8666

18.5

468.43

98024

7/1/2000

8411

17.0

494.76

For different export transactions calculate adjusted export price with same
method and then take weighted average for entire export transaction of POI

10

98025

7/1/2000

8337

18.0

463.17

11

98026

7/1/2000

8076

16.5

489.45

98603

201.50

Discount
Domestic F&I
Credit

rebate
maritime F&I

If C & F = $ 100, Credit = 90days, Interest rate = 10% domestic F&I = $ 5,

maritime F&I = $ 20, discount = 2%
Then adjusted export price would be:

27

Weighted Average Export Price

Adjusted Export Price

Gross
Export
Price

Discount
2%

Domestic
F&I

Meritime
F&I

Adjusted
Exfactory /
export
price C

Qty/(MT)

19.0

12.72

467.76

Credit

B
515.79

28

Gross Unit
Price $

Weighted
Average
Export
Price ($)
E

Weights

Adjusted
Export
Price $
C

515.79

467.76

0.0943

44.11

20.0

484.20

437.58

0.0993

43.45

10.32

20

484.20

9.68

20

11.94

437.58

18.5

510.54

462.74

0.0918

42.48

510.54

10.21

20

12.59

462.74

19.5

478.92

432.54

0.0968

41.87

478.92

9.58

20

11.81

432.54

18.0

505.28

457.71

0.0893

40.87

505.28

10.11

20

12.46

457.71

19.0

473.68

427.53

0.0943

40.31

473.68

9.47

20

11.68

427.53

17.5

500.00

452.67

0.0868

39.29

500.00

10.00

20

12.33

452.67

18.5

468.43

422.51

0.0918

38.78

468.43

9.37

20

11.55

422.51

17.0

494.76

447.67

0.0843

37.74

494.76

9.90

20

12.20

447.67

18.0

463.17

417.48

0.0893

37.28

463.17

9.26

20

11.42

417.48

16.5

489.45

442.60

0.0819

489.45

9.79

20

12.07

442.60

29

201.50

36.25
442.43

D1 = A1 / A12

And E = C x D

30

15-Oct-15

Calculation of Normal Value

Domestic Sales During POI

Normal value is the price at which a product is sold in the domestic market of
the exporting country.

For the purposes of fair comparison (at ex-factory level) deduct following items
from unadjusted normal value:-

Client
Identity
(ID)

Date of Sale

98001

03/01/2001

98008

04/01/2000

98015

05/01/2000

98022

17/01/2000

If normal value is $ 110, credit = 45 days, interest rate = 10%,

domestic F&I = $5, discount = 2%, Sales tax = 15%

98029

18/01/2000

98036

19/01/2000

Then adjusted export price would be:

98043

03/02/2000

98050

04/02/2000

98064

05/02/2000

10

98064

10

17/02/2000

11

98071

11

18/02/2000

12

98078

12

02/03/2000

For different domestic sales transactions calculate adjusted normal value with
same method and then take weighted average for entire sales transactions of
period of investigation (POI)
31

Date of
Sale

Qty

Gross Discount Domestic

Price
@2%
F&I
$/M.T

Credit
45 days

Sales
taxes
15 %

Qty.

Gross
Price
$/M.T B

21120 35.0
15600 25.0

632

9795 15.0
21597 34.5

653

15606.5 24.5
9381.5 14.5

637

21114 34.0
15168 24.0

621

8988 14.0
20636 33.5

642

14711 23.5
8599.5 13.5

626

642
626
647
632
616
637

32

Weighted Average Normal Value

Adjusted Normal Value

No.
of
Sale

Sale value
US $

Discount
Domestic F&I
Credit
Sales Tax

110 -110 (45/365)0.10 5 110x0.02 -110x0.15

= 110 1.35-5-2.20-16.5 = $ 84.95

Invoice
Number

No. of
Sale

Adjusted
Exfactory /
Normal
value C

Qty

Adjusted
Normal
Value
C

Weights

Gross
Price
$/M.T
B

Weighted
Average
NV (US$)
E

35.00

632

511.77

0.1261

64.55

03/01/00

35.0

632

12.64

`7.79

94.80

511.77

25.00

642

519.94

0.0901

46.84

04/01/00

25.0

642

12.84

7.92

96.30

519.94

15.00

653

528.94

0.0541

28.59

05/01/00

15.0

653

13.06

8.05

97.95

528.94

34.50

626

506.86

0.1243

63.02

17/01/00

34.5

626

12.52

7.72

93.90

506.86

24.50

637

515.86

0.0883

45.54

18/01/00

24.5

637

12.74

7.85

95.55

515.86

14.50

647

524.03

0.0523

27.38

19/01/00

14.5

647

12.94

7.98

97.05

524.03

34.00

621

502.77

0.1225

61.60

03/02/00

34.0

621

12.42

7.66

93.15

502.77

24.00

632

511.77

0.0865

44.26

04/02/00

24.0

632

12.64

7.79

94.80

511.77

14.00

642

519.94

0.0505

26.23

05/02/00

14.0

642

12.84

7.92

96.30

519.94

33.50

616

498.69

0.1207

60.20

10

17/02/00

35.5

616

12.32

7.59

92.40

498.69

23.50

626

506.86

0.0847

11

18/02/00

23.5

626

12.52

7.72

93.90

506.86

277.50

42.92
511.13
34

D1= A1/A12 And E1 = D1 x C1

33

ANTIDUMPING

Anti Dumping Duty

MEASURES BY IMPORTING COUNTRY

1995 - 2006
331

Dumping Margin

DM as %age of EP

WANV WAEP

$ 511.13 - $ 442.43 = $ 68.7

(68.7 / 442.43) x 100

Total 1 941
239

231

152
120
92
84

ADD

15.52 %

82

71
54

35

India

US

EC

Argentina

Safrica

Turkey

China

Canada

Mexico

Australia

Korea

15-Oct-15

Anti-Dumping Related Disputes

Panels Established 1995 - 2006

Trade Remedy Disputes: Defendants

1995 - 2006

EC 5

USA 32

Total 33

6
Korea 2

Mexico 3

Egypt 2

Argentina 5

Chile 1

Thailand 1
Brazil 1

Japan 1

Guatemala 2

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
37

38

AD Measures imposed on China by Country

Most Affected Sectors

Venezuela, 11

Argentina, 49

United States, 77

17%

Australia, 12
Brazil, 27

4%
7%

39%

Ukraine, 6

Canada, 17 Chile, Jamaica, Japan, Malaysia, 1

each, 4
Colombia, 14

Turkey, 51

Egypt, 11
Thailand, 5

9%
11%

South Africa, 17
Philippines, Poland, Chinese
Taipei, Trinidad & Tobago, 2
Peru, 15
each, 8
New Zealand, Pakistan , 3 each, 6

13%

European Union, 66

Mexico, 16
Korea, Republic of, 19

METAL

CHEMICAL

PLASTIC

TEXTILES

M&E

Source: WTO Secretariat, Rules Division Anti-dumping Database

A&F

OTHER

39

Assignment-01b

Assignment-01a
For Export Price
Sales Value
Qty
US$
(MT)

For Normal Value

Credit EP

60 Days

25

63500

10

Credit NV

30 Days

63050

21

64000

11

21.5

64500

15

61580

23.5

62000

16

interest
Domestic
F&I
Maritime
F&I

10%

64160

64715

22

65000

22

Discount

2%

63895

23

64000

12

Sales Tax

15%

62745

24.5

63000

21

64365

22.5

64500

20

65245

24

63500

14

62985

25.5

64500

19

63900

20

63500

15

65500

13

62520

India, 98

Israel, 4
Indonesia, 5

Sale value US $ Qty.

Calculate Anti Dumping Duty

Show all calculation steps on single
Submission Date: 22-10-2015

page

5
20

Suppose that a Chinese T-Shirt manufacturing firm is

acting as a discriminating monopolist when selling at
home and exporting to Pakistan.
a. Illustrate whether the firm will "dump" on the Pakistan
market, and show how this result depends on the demand
curves.
b. Assume that Pakistan responds with a tariff which
does influence the price of T-Shirt imports. Illustrate the
effect of the tariff on Pakistan consumers, producers, and
net national welfare.
Submit on 22-10-2015.

15-Oct-15

Projects for Presentation

1.
2.
3.
4.
5.
6.

A review and critique of the

Phytosanitary Standards
A review and critique of the
A review and critique of the
Countervailing Measures
A review and critique of the
Inspection
A review and critique of the
A review and critique of the
Clothing

WTO's Agreement on Sanitary and

WTO's Agreement on Agriculture
WTO's Agreement on Subsidies and
WTO's Agreement on Preshipment
WTO's Agreement on Safeguards
WTO's Agreement on Textiles and

Presentation max duration will be 15 minutes.

Each group participant speak for 3 minutes.
Presentation date : 29 Oct 2015

Project for Presentation

Group # 1
Mohsin Raza
M.Khalil
M.Tariq
Ushna Ali
sadaf fida

Group # 2
M.zaid Awan
Arslan Haider
H.M.shehroz
Arslan Ali
Rana zohaib

(SPS)

(027) GL
(003)
(016)
(004)
(005)

(028)
(029)
(007)
(034)
(010)

Group # 3
Waleed Afzal (020)
Usama Alvi
(006)
M.Bilal
(013)
Saqlain Younas(014)
Adil Sahil
(021)

Group # 4
Hafsa Sohail
Zohaib
Ather Bhatti

(AOA)
GL

(Subsidies)
GL

(018)
(023)
(022)

Group # 5
Saba khan
Sher bano
Iffat yousaf
Raja khalid
Gulzaib

(008)
(025)
(024)
(026)
(o17)

Group # 6
lmran Baig
M.Umer
Touqeer
Baqar Raza
Hamza Khan

(011)
(002)
(031)
(032)
(019)

(PSI)
GL

(Safeguard)
GL

(ATC)
GL