Improving Africa’s Position in the International Trading System

Tunis, Tunisia, Nov 28 – Dec 2, 2005

Agreement on Anti-dumping
By
Omu Kakujaha-Matundu
okakujaha@unam.na or okumbazu@yahoo.com
OUTLINE OF PRESENTATION
• Introduction/Definitions/Agreement
• Background to contentious issues
• Scope of mandate for negotiations under
DDA
• The July package
• Special & Differential Treatment

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 Background to issues
• Uruguay round + & single undertaking =
accept whole package & opting out is out
• i.e., broader agenda + single undertaking =
members gave up one form of flexibility
• fear to encounter adjustment problems
• possibility to react ex post necessary e.g., to
problems caused by unforeseen import surges
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 Background to issues (cont…)
• Without flexibility to act ex post members
reluctant to liberalize
• Additional flexibility for Developing
Countries & LDCs
– extended implementation periods
– technical assistance

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 Background to issues (cont…)
• Rationale for SDT
– weakness in institutional capacity
– cost of adjustments
• imposed by new disciplines
• Discussion leads us to trade remedies

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 TRADE REMEDIES

• Three Types of Contingent Trade Remedies

– Anti-dumping
– Countervailing
– Safeguards

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 ANTI-DUMPING AGREEMENT

• ADA allows countries to impose anti-

dumping duties to protect their producers
from injury caused by imports of dumped
goods

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 WHAT IS DUMPING?
• When an exporter sells a product to the
importing country at a lower price than the
price at which the same (or similar) product
is sold on its own domestic market
– Domestic price of exporter > export price
– Dumping = price discrimination between
national markets

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 ANTI-DUMPING ISSUES
• What is wrong with Dumping?
• Can cause injury to local industry
• unfair trade practice
• What is wrong with Anti-Dumping?
• Methodologies for calculating margins
• sale of “like” products in ordinary course of trade
• comparison of export price to normal value etc.(see below)
• Effectiveness of Anti-Dumping Orders
• int’l distributors can easily source from other country (not
MFN)

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 ANTI-DUMPING MEASURES

• Measures
– Import Restrictions
– Temporary protection of particular industries

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 THE AGREEMENT

• Legal Basis for Anti-Dumping Actions

– Article VI of GATT 1994
– Agreement on Implementation of Article VI of
GATT 1994 (Anti-Dumping Agreement)

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 DDA & July Package
• Places needs and interests of Developing
and Least Developed Countries at the heart
of the negotiations
• Specifics discussed in the different
presentations during this seminar

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 ANTI-DUMPING
• Substantive Elements • Normal Value
– Dumping • “Like Product”?
• Determine the “Like
– Injury
Product”
– Causal link between – Compare the following
injury and dumping aspects
• Raw material used
• Manufacturing process
• Tariff classification
• Consumer preference and
end-use
• Quality

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 ANTI-DUMPING
• Comparison of Domestic Price to
• Export price to third
country
– Use a comparable price of
the like product when
exported to an appropriate
third country, provided that
this price is representative
• Constructed value
– Cost of production in
country of origin and
reasonable amount for
administrative, selling and
general goods and for profits
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Export Price
– The comparison must be made at the
same level of trade, normally at the
ex-factory level, and in respect of
sales made as nearly as possible at
the same time
– Due allowance must be made for
differences which affect price
comparability, including differences
in:
• Conditions and terms of sale
• Taxation
• Quantities
• Physical characteristics
• Levels of trade
• Any other differences which are
demonstrated to affect price
comparability
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 ANTI-DUMPING
• General Principles for • Modalities of Duties
Computing the Margin of • Ad valorem duties – 20%
Dumping ad valorem
• Specific duties – US$10 per
kilogram
• Variable duty – NV (POI)-
export price of shipment

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 ANTI-DUMPING
• Meaning of “Injury”
• Three meanings:
– Material injury to domestic
industry (“current or present
injury)
– Threat of material injury to
domestic industry (“future
injury”)
– Material retardation of the
establishment of a domestic
industry
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• Basic Principles for the
Determination of Injury
– The determination of injury must be
based on positive evidence and
involve an objective examination of:
• The volume of the dumped imports
• The effect of the dumped imports on
prices in the domestic market for the
like products
• The consequent impact of these
imports on domestic producers of
like products
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 ANTI-DUMPING
• Price Effect of Dumped • Article 3.4 Injury Factors
Imports – Actual and potential decline in sales,
productivity, profits, return on
– Price undercutting
investment, output, and market share
– Price depression – Factors affecting domestic prices
– Price suppression – The magnitude of the margin of
• Impact of Dumped Imports on dumping
Domestic Producers – Actual and potential negative effects

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 ANTI-DUMPING
• Causality
– Article 3.5
• Illustrative list of potential
“other factors”
– The volume and price of
imported goods
– Contraction in demand
– Respective trade practices of
and competition between
foreign and domestic
producers
– Developments in technology
– Export performance and
productivity of domestic
producers
• Shall not attribute the
injuries caused by such other
factors to the dumped
imports
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• Threat of Injury
– Significant rate of increase of
dumped imports indicated the
likelihood of substantially increased
importation
– Sufficient freely disposable, or an
imminent substantial increase in the
capacity of the exporter
– Whether imports are entering at
prices that will have a significant
depressing/suppressing effect on
domestic prices, and would likely
increase demand for further imports
– Inventories of the exporter/importer
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 ANTI-DUMPING
• Determination of Material
Retardation
• The Agreement does not
provide any guidance
regarding the determination of
material retardation
• Procedural Aspects of an Anti-
Dumping Investigation
– Format of Investigation
• Initiation
• Information gathering
• Preliminary determination
• Further investigation
– Response to preliminary
determination
• Verification of information
• Final determination

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Conditions for Application of Provisional
Measures

– Provisional measures may be applied if

• an investigation has been initiated (in accordance
with the provisions of Article 5), a public notice has
been given to that effect, and the parties have been
given opportunities to submit information and
comments
• a preliminary affirmative determination has been
made of dumping and consequent injury to a
domestic industry
• it is judged that such measures are necessary to
prevent injury being caused during the investigation

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 Forms of Provisional Measures

– The amount of the duty may not be greater than

the margin of dumping provisionally estimated
– The security should be equal to the amount of
the provisional duty
– Provisional measures may take the form of a
provisional duty or, preferably, a security (by
cash deposit or bond)

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 Provisional Measures & Final Duty
• Duration of Provisional Measures • Final Duty
• The general rule is that provisional • Public Notice:
measures should be applied for as – Sufficient detail on findings and
short a period as possible conclusions reached on all issues
of fact and law
• Not more than 4 months or, by
decision of the authorities upon – Specifically:
request by exporters representing a • Names of suppliers/supplying
significant percentage of the trade countries
involved, for a maximum of 6 • Product description
months
• Margin of dumping
• When the authorities examine • Considerations re: injury
whether a duty lower than the
margin of dumping would be • Main reasons behind
sufficient, these periods may be 6 determination
and 9 months, respectively – If information not in notice to be
(lesser duty considered) made available in a separate report

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 ANTI-DUMPING
• Final Duty (2)
• If final margins are de minimis -
 2% of export price - no duty
can be imposed
• If the volume of dumped exports
from any given country is
negligible -  3% of imports of
the subject product - no duty can
be imposed, unless all together
these countries account for 7%
• Duration of Final Duty
– Only for as long as, and to
the extent necessary, to
counteract injurious practice
– Not longer than five years
after imposition
– Can be reviewed upon
request after a “reasonable
period” or at own initiative of
authorities

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 Review of Anti-Dumping Duties

– Assessment of Review
– Review due to changed circumstances
• Request
• Own initiative
– Dumping and/or injury
– Sunset review—five year termination
– “New shipper” review

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Special & Differential Treatment
• Article 15
– recognize special situation of developing
countries
– “Possibilities of constructive remedies provided
for by this Agreement shall be explored before
applying anti-dumping duties…”

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 AFRICAN POSITION
– The Kigali Consensus
• Introduction of more complex rules and
disciplines would be counterproductive and
will negatively affect African countries’
rights under these agreements

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AFRICAN POSITION (cont…)
– The Cairo Declaration
• Avoid introduction of more complex rules and
disciplines
• Need to provide adequate technical assistance to
African countries
• Need to address development dimension of
negotiations
• Clarification and improvement of disciplines and
procedures
• A moratorium by developed countries on contingency
measures that include anti-dumping actions against
African LDCs exports
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Thank you very much

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