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What are anti-dumping measures? WTO and Japan METI response

What are anti-dumping measures? What follows, in the immediate paragraph, is the answer of what dumping is according to the WTO and, in the subsequent text, what is explained by the Ministry of Economy, Trade and Industry of Japan (METI).

For the WTO, dumping is the export of products at a price lower than their normal value, that is, at a price lower than that sold in the domestic market or in third countries, or at the cost of production.

For its part, the METI defines dumping as a situation in which the export price of a product is lower than its sale price in the exporting country.

A cheap sale, in the ordinary trading sense, is not dumping.

Yes, it is when it is shown that the dumped imports are causing injury to the importing country within the meaning of the WTO Agreement on the Application of Article VI of the General Agreement on Tariffs and Trade of 1994 (Anti-Dumping Agreement), in accordance with and through research.

Under this Agreement, the importing country can impose anti-dumping measures to provide relief to domestic industries damaged by imports.

Anti-dumping measures

The imposition of an anti-dumping duty by the country is determined by the margin of dumping, that is, the difference between the export price and the domestic sales price in the exporting country.

By adding the margin of dumping to the export price, the dumped price can be converted into a “fair” trade price.

When it is impossible to obtain a comparable domestic price because there are no sales or the sales volume is low in the ordinary course of trade in the domestic market, the price comparison uses export prices to third countries or a “constructed value” .

Investigation

A “constructed value” is the cost of production in the country of origin plus a reasonable amount for general, selling and administrative costs and profits.

Similarly, when the export price is found to be unreliable, the price at which the product is first resold to independent buyers or another price on a reasonable basis determined by the authorities can be used in the price comparison.

Protectionism

Since anti-dumping measures are an exception to the most-favored-nation rule, extreme care must be exercised when invoking them.

However, unlike safeguard measures, which are also instruments for the protection of the domestic industry, the implementation of anti-dumping measures does not require the government to grant countervailing concessions or consent to countermeasures adopted by the trading partner.

This has increasingly led to abuse of anti-dumping measures.

For example, anti-dumping investigations are often initiated on the basis of insufficient evidence, and anti-dumping duties can be maintained long after the conditions for their collection have been removed.

Some countries have arbitrarily applied anti-dumping measures to restrict imports, rather than achieving the limited remedial objective authorized in the Agreement.

Given this situation, one of the axes of the Uruguay Round negotiations was to establish disciplines to curb the abuse of anti-dumping measures as tools for protectionism and restriction of imports.

Although considerable progress was made in this process, many countries still express great concern about this abuse.

 

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