Antidumping and Countervailing Duties

Question 1

Does GATT prohibit dumping?

Answer 1

No - only where it causes injury insomuch as retaliation can be applied.

Question 2

What anti-dupming measures does GATT apply to?

Answer 2

ALL - not just duties (ABR, US-1916 Act)

Question 3

What must be determined prior to imposing anti-dumping measures?

Answer 3

1. That there is dumping.
2. That the domestic like product industry is suffering injury; and
3. The injury has causal link to dumping.

Question 4

What responses are allowed to dumping?

Answer 4

ABR, US-1916 Act:

1. Anti-dumping duties;
2. Provisional measures;
3. Price undertakings.

Question 5

What is dumping?

Answer 5

Where goods sold in market for less than normal value.

Question 6

How is ‘normal value’ of goods determined?

Answer 6

AD - Art 2.1 - normal value is comparable price in ordinary course of trade for like product when destined for consumption in the exporting country.

Four elements (ABR, US-Hot-Rolled Steel):

1. Sale must be in ordinary course of trade;
2. Must be like product (Art 2.6);
3. Product must be destined for consumption in the exporting country; and
4. Price must be comparable.

Question 7

What are the AD alternatives to determine ‘normal value’?

Answer 7

Art 2.2 - Using an ‘appropriate’ third country price or constructing the normal value (based on cost of production plus reasonable amount for admin, selling and general costs and profit).

Question 8

What is zeroing?

Answer 8

When comparing weighted-average export and normal prices, a govt has to average the dumping margin over a series of transactions.

Zeroing involves disregarding all transactions where the normal value is lower than the export price.

It means that the overall dumping margin is higher.

ABR, EC-Bed Linen

Not right as need to take account of all comparable export transactions (Art 2.4.2)

Question 9

What are the AD’s three definitions of injury?

Answer 9

1. Material injury to a domestic industry;
2. Threat of material injury to a domestic industry;

or

3. Material retardation of the establishment of a domestic industry.

Question 10

What is the definition of a subsidy?

Answer 10

SCM, Art 1.1

A financial contribution by a government or public body, which confers a benefit.

Question 11

What can constitute a financial contribution?

Answer 11

Foregone tax revenue (US-FSC)
Government practice (Brazil-Aircraft)

Question 12

What does it mean for a subsidy to be specific?

Answer 12

WTO rules only cover specific subsidies (Art 1.2 SCM)

Art 2 - subsidy is specific when it has been specifically provided to an enterprise, industry or group of enterprise or industries.

Not widely availbale in economy.

Question 13

What two subsidies are prohibited?

Answer 13

Art 3 SCM:

1. Export subsidies (contingent on export performance)
2. Import substitution subsidies (contingent on use of domestic products over imports)

Question 14

What subsidies are ‘actionable’?

Answer 14

Subsidies that are subject to challenge to the extent that they cause adverse affects to another member’s interests.

Three types of ‘adverse effects’ (SCM Art 5):

1. Injury to domestic industry;
2. Nullification or impairment of benefits accruing; and
3. Serious prejudice to interests, or threat thereof, of another member.

Question 15

What options does a member have if injured by subsidies?

Answer 15

1. Challenge measure multilaterally (Arts 4 or 7 of SCM);

2. Unilaterally impose countervailing duties on subsidised imports.

Question 16

When can countervailing duties be imposed? (3 conditions)

Answer 16

GATT Art VI and SCM Art 10:

Three conditions must be fulfilled:

1. There are subsidised imports;
2. There is injury to domestic industry;
3. There is causal link between subsidy and injury.

Question 17

What are the three types of countervailing measures?

Answer 17

1. Provisional countervailing measures (max 4 months) Art 17;
2. Voluntary undertakings - Art 18;
3. Definite countervailing duties (only after final determination that countervailing subsidy exists and causes/threatens injury to domestic industry) Art 19.1.