Anti-Dumping techniques by Pakistan

Introduction

Pakistan has liberalized its trade particularly over the recent past. Being one of
the founding members of GATT (in 1947) and the WTO (in 1995), Pakistan is a
natural partner in the new international trade regime.

While the liberal trade offers barrier-free access to international markets, it also
posses competitive challenges to industries of developing countries. Besides,
unhindered and free trade may entail unfair trade practices such as “dumping”.
Realizing that Pakistan’s domestic industry may also face similar situations, the
Government promulgated a law (the Anti-Dumping Duties Ordinance, 2000),
which provides adequate remedy against dumping and its injurious effects on
domestic industry.

Anti-Dumping Duties Ordinance, 2000

The Anti-Dumping Duties Ordinance, 2000 (the “Ordinance”) gives effect in

Pakistan to the WTO Agreement on Antidumping.

The Ordinance empowers the National Tariff Commission (the “Commission”) to

process an application against alleged dumping of a product and to impose
appropriate antidumping duties.

When can an Antidumping Duty be Imposed?

The antidumping duty can only be imposed if it is established, after due process,
that:

i) a product has been dumped into Pakistan; and

ii) the dumping has caused or threatens to cause material injury to Pakistan’s
domestic industry.
What is Dumping?

Dumping occurs when a product is exported at a price lower than the price at
which it is sold in the domestic market of exporting country.

Domestic price $ 500/MT

$ 500/MT

Export price $ 450/MT

$ 450/MT

Dumping margin

$ 50/MT (500-450)

(500-450)

3 EXAMPLES OF ANTI DUMPING TECHNIQUES ADOPTED BY PAKISTAN:

1. FORMIC ACID:
Tufail Chemical Industries Limited, Mezzanine Floor, Progressive Center, 30-A,
Block-6, P.E.C.H.S, Karachi on behalf of the domestic industry producing Formic
Acid 85% (“FA 85%”) on July 30, 2005 alleged that FA 85% produced in the
Republic of Finland (hereinafter referred to as “Finland”) and the Federal
Republic of Germany is exported to Pakistan at dumped prices.
NTC investigated the matter and it contained sufficient evidence of dumping of
FA 85% and injury to the domestic industry. The investigation revealed that:

i. FA 85% imported from Finland and Germany into Pakistan and the FA 85%
produced in Pakistan by the domestic industry are like products;
ii. exporters from Finland and Germany are exporting FA 85% to Pakistan at
dumped prices; and
iii. exports of FA 85% by the Finish and German exporters to Pakistan at dumped
prices has caused and is causing material injury to the domestic industry
producing FA 85%, mainly through:
a. price undercutting;
b. price suppression;
c. loss in market share;
d. negative effects on capacity utilization;
e. negative effects on employment ;
f. negative effects on productivity;
g. negative effects on cash flow;
h. decline in profits; and
i. increase in inventories.
.
The Commission had imposed provisional antidumping duty on the investigated
product vide official gazette (extra ordinary) dated March 09, 2006 for a period of
four
months effective from March 09, 2006. In terms of Section 55(2) of the Ordinance
and Article10.3 of Agreement on Antidumping, if the definitive antidumping duty
is lower than the amount of provisionally determined antidumping duty, the
difference shall be refunded by the Commission within forty-five days of the final
determination. Since provisional antidumping duty imposed by the Commission
on March 09, 2006 on exports from Kemira was higher than the definitive
antidumping duty imposed on July 07, 2006 the difference will be refunded in
terms of section 55(2) of the Ordinance. Importers are informed to submit their
requests for refund within a period of 30 days from the date of publication of the
Notice of Final Determination in the Newspapers i.e., by August 05, 2006.

2. Ceramic Tiles
The National Tariff Commission initiated an antidumping investigation on March
27, 2006 under Section 23 of the Anti-Dumping Duties Ordinance, 2000 after
establishing that the application lodged by Master Tiles and Ceramics Industries
Limited, G.T. Road, Gujranwala on behalf of the domestic industry manufacturing
tiles was in accordance with Sections 20 and 24 of the Ordinance. The
investigation concerns dumping of tiles, which includes ceramic,
porcelain/vitrified/granite wall and floor tiles in glazed/unglazed,
polished/unpolished finish (“Tiles”), originating in and/or exported from the
People’s Republic of China into Pakistan.
The Applicant identified 219 exporters involved in alleged dumping of
Tiles. However, addresses of 35 exporters and 10 producers were available with
the Commission. In terms of Section 27 of the Ordinance, the Commission upon
initiation forwarded a copy of Notice of Initiation directly to all exporters/producers
of Tiles from China whose addresses were available. The Commission also
forwarded the Notice of Initiation to the Embassy of China in Islamabad with a
request to forward the same to all exporters/producers of Tiles in China in order
to respond the Commission.

Imposition of Provisional Antidumping Duty: In reaching this affirmative

preliminary determination, the Commission is satisfied that the investigated
product has been imported into Pakistan at dumped prices. This has caused
material injury to domestic industry during the POI and provisional measures are
necessary to prevent injury being caused during the course of this investigation.
Therefore, the Commission, pursuant tothe powers conferred upon it under
Section 43 of the Ordinance, has decided to impose provisional antidumping
duties on Tiles importable from China as given in the following table for a period
of four months effective from November 30, 2006.

3. ACRYLIC TOW
The Commission received a written application from Dewan
Salman Fibre Limited, F 7/4, Islamabad, a domestic producer of Acrylic Tow, on
behalf of the domestic industry, on January 31, 2004, alleging that Acrylic Tow
produced in the Republic of Uzbekistan is exported to Pakistan at dumped
prices). The Embassy of Uzbekistan in Islamabad was notified on January 31,
2004, through the Ministry of Foreign Affairs, Pakistan.
The examination of the application showed that it met the
requirements of Section 20 of the Ordinance and Article 5.2 of Agreement
on Antidumping as it contained sufficient evidence of dumping of the
investigated product and injury to the domestic industry caused
therefrom. Their findings were:
i. the investigated product and the Acrylic Tow produced in
Pakistan by the domestic industry are ‘like products’;
ii. the Exporters and the Producer are exporting the
investigated product to Pakistan at dumped prices; and
iii. dumping of the investigated product has caused and is
causing material injury to the domestic industry, mainly
through1:
a. increase in volume of dumped imports;
b. price undercutting;
c. price depression;
d. price suppression;
e. decline in market share;
f. low utilization of production capacity;
g. losses on its operations;
h. decline in wages;
i. decline in productivity;
j. negative effect on ability to raise capital;
k. negative effect on investment and growth
l. negative effect on cash flows
m. negative effect on domestic sales;
n. decline in output; and
o. high magnitude of margin of dumping

The Commission had imposed a provisional antidumping duty on

the investigated product @ 12.71 percent ad val of C&F price importable
from the Exporters and/or the Producer for a period of four months
effective from August 13, 2004. In terms of Section 55(2) of the
Ordinance and Article 10.3 of Agreement on Antidumping, if the
definitive antidumping duty is lower than the amount of provisionally
determined antidumping duty, the difference shall be refunded by the
Commission within forty-five days of the final determination. Since
provisional antidumping duty imposed by the Commission on August 13,
2004 and the definitive antidumping duty imposed on December 10,
2004 are equal, no claim for refund of antidumping duty shall be
entertained with respect to the import of the investigated product.