The Incompatibility of Anti-Dumping Laws

Stephen Joseph, M. Selvam
2019 International Journal of Engineering and Management Research  
This research paper is an evaluation as to how far the anti-dumping laws and rules enabled WTO to resolve relevant trade disputes and to protect the interests of developing countries. The paper primarily examines in a legal and procedural paradigm, whether anti-dumping measures provided in the WTO-DSB forum and incorporated into respective foreign trade laws of countries have been effective or merely costing the importing countries, while countries that keep dumping do so with impunity, because
more » ... h impunity, because dumping is just condemned, not prohibited. The Article VI of the General Agreement on Trade and Tariffs (GATT) deals with Anti-dumping and Countervailing Duties. Interpretation of the Article VI.1 would reveal that: 'that dumping is an act by which products of one country are introduced into the commerce of another country at less than the normal value of the products'. 'In connection with the effect of Article VI on the practice of dumping itself, in the Havana Meet in 1954-55, it was agreed that contracting parties should, within the framework of their legislation, refrain from encouraging dumping, as defined in that paragraph, by private commercial enterprises'. This lopsidedness in the GATT regulations was not corrected in the WTO regulations. The cost of anti-dumping investigations and substantiating the same and all the associated consultative processes are time consuming and not evenly poised on the two parties to the dispute concerned. One instance is the unsustainable practice of DSB constituting Panel with members drawn from the country which initiated action. This goes against the very root of natural justice. One of the principles of natural justice and the related legal maxim is that, 'No person shall sit in judgment of his/her own cause'. Fairness demands that the members should be drawn from a third country. The structure of the panel should be three; one each from developed and developing countries and the third to be elected by majority of the parties. This structure is to facilitate to decide by majority voting, in case where consensus fails. In sum, the legal paradigm and the procedural drags involved in anti-dumping measures, have costed the developing import-intensive countries more while countries that exported keep dumping, at will, because dumping is just condemned, not prohibited. Indonesia and this duty was being imposed on foreign companies including Hyundai, POSCO, Nippon Steel, Sumitomo, JFE Steel Corporation. The duty has to stand effective from 8th August 2016 for a period of five years. The amount for import duty spans between $478 per tonne to $561 per tonne. This, in turn, resulted in fall in imports in all the months of the financial year 2016-17 on a y-o-y basis. On an annual basis, steel imports declined by a sharp 38.3% to 7.2 million tonnes in 2016-17 compared to that in 2015-16. Rou Li in the Research work on, "Antidumping, Cost and Chinese Export: Based on Multilateral Resistance Term of Gravity Model", ln X odj = a 0 + a 1 lnY 0 + a 2 lnY d + a 3 ln t odj + a 4 ln Π oj + a 5 ln p dj, + e ij , where X odj is country o"s export to country d in industry j, Y 0 and Y d represent the GDP of country o and country d respectively, the sign of a 1 and a 2 are positive, t odj is the cost of export and a 3 is negative which is 1-σ, with σ>1, that is "σ" elasticity coefficient of substitution of products from different places exceeds 1, Π oj and P dj , are the ease with which countries can export and import, known as Multilateral Resistance Term or the trade barriers. With other explanatory inputs into the models, Rou Li observed, that anti-dumping investigations significantly restrained export of the concerned product by increasing either or both fixed and variable costs.
doi:10.31033/ijemr.9.2.10 fatcat:hwwucpes6fgebmq4nkypiyzvy4