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ANTI-DUMPING MEASURES - CERTAIN CONCERNS REGARDING IMPLEMENTATION

ANTI-DUMPING MEASURES - CERTAIN CONCERNS REGARDING IMPLEMENTATION. Directorate General of Anti-dumping & Allied Duties Ministry of Commerce & Industry Department of Commerce Government of India website:www.commerce.nic.in. THIS PRESENTATION WILL BROADLY COVER THE FOLLOWING:.

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ANTI-DUMPING MEASURES - CERTAIN CONCERNS REGARDING IMPLEMENTATION

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  1. ANTI-DUMPING MEASURES - CERTAIN CONCERNS REGARDING IMPLEMENTATION Directorate General of Anti-dumping & Allied DutiesMinistry of Commerce & IndustryDepartment of CommerceGovernment of Indiawebsite:www.commerce.nic.in

  2. THIS PRESENTATION WILL BROADLY COVER THE FOLLOWING: • Legal Framework of Trade Remedial Measures in India • Investigation and Imposition of Duties • Organisational Set-up of DGAD • Prospects for India’s Trade Remedy System • Implementation Issues : • Issues Relating to Initiation of AD Investigations • Issues relating to Dumping Margins • Issues relating to Injury • Other Issues

  3. LEGAL FRAMEWORK Anti-Dumping • Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 (Commonly known as WTO-Anti-dumping Agreement) • Customs Tariff Act, 1975 - Section 9A, 9AA, 9B & 9C (as amended in 1995 and thereafter) • Anti-dumping Duty Rules [Customs Tariff (Identification, Assessment and Collection of Anti-Dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995] (as amended).

  4. LEGAL FRAMEWORK (Contd.) Subsidies & Countervailing Measures • WTO Agreement on Subsidies and Countervailing Measures (ASCM) • Customs Tariff Act, 1975 - Section 9, 9AA, 9B & 9C (as amended in 1995 and thereafter) • The Customs Tariff (Identification, Assessment and Collection of Countervailing Duty on Subsidised Articles and for Determination of Injury) Rules, 1995.

  5. LEGAL FRAMEWORK (Contd.) Safeguard Measures • Article 19 of the General Agreement on Tariffs and Trade read with Agreement on Safeguards • Sections 8 B and 8 C of the Customs Tariff Act, 1975 • Customs Tariff (Identification & Assessment of Safeguard Duty) Rules, 1997 and Customs Tariff (Transitional Products Specific Safeguard Duty) Rules, 2002 govern the procedural aspects.

  6. INVESTIGATION&IMPOSITION OF DUTIES • Investigations & Recommendations by Designated Authority, Department of Commerce • Imposition & collection of anti-dumping duty by Department of Revenue, Ministry of Finance • Safeguard Measures are administered by the DG, Safeguards, Department of Revenue and recommendations are placed before the Standing Board of Safeguards chaired by the Commerce Secretary. • Imposition and Collection of Safeguard Duty is by Department of Revenue, Ministry of Finance.

  7. DIRECTORATE GENERAL OF ANTI-DUMPING AND ALLIED DUTIES

  8. PROSPECTS FOR INDIA'S TRADE REMEDY SYSTEM • The process of liberalisation would be meaningful only if fair trade and a level playing field exists alongside free trade between entrants to the domestic market and domestic producers. • While there are areas of common concern, most developing countries are at different levels of economic development. • Developing countries have to articulate their priorities in efforts towards bringing greater transparency and clarity in the WTO ADA.

  9. PROSPECTS FOR INDIA'S TRADE REMEDY SYSTEM (Contd.) • DGAD has been continuously standardising its practices to ensure uniformity and consistency in the implementation of the rules and procedures and for ensuring high initiation and investigative standards. • DGAD has attempted to ensure fair and transparent investigation by following procedural requirements of the WTO ADA and by establishing its own system of checks and balances. • India would continue to use trade remedial measures not as a measure of protection for the domestic industry but to ensure a level playing field between domestic and foreign producers.

  10. PROSPECTS FOR INDIA'S TRADE REMEDY SYSTEM (Contd.) • The prospects for trade remedial measures would also have to be viewed in the context of various implementation issues currently unresolved. • While India seeks greater transparency, clarity and improvement of disciplines, this should not result in a situation where these would negate the effects of injurious dumping. • India through the DGAD would continue to work with the WTO Negotiating Group on Rules to clarify and improve these Agreements.

  11. SOME OF THE IMPLEMENTATION ISSUES RAISED BY INDIA ISSUES RELATING TO INITIATION a. Back to back anti-dumping investigation • Paragraph 7.1 of the Decision On Implementation Related Issues and Concerns (WT/MIN (01)/W/10) requires special care to be taken prior to initiation of a back to back anti-dumping investigation. It is, however, essential to have a specific provision in the Anti-Dumping Agreement whereby such investigations shall not be conducted within 365 days of a negative finding in a prior investigation on the same product or a broader category of product.

  12. ISSUES RELATING TO INITIATION(Contd.) b. Domestic industry consisting of small-scale or“unorganized” sector producers • Fragmented Domestic industries have a very large number of producers and thus face an enormous problem in initiating anti-dumping investigations because they find it difficult to meet the ‘Standing’ requirements contained in Anti-dumping provisions. This is particularly true in the case of goods produced in industries in the unorganized sector that consists mainly of small, unincorporated entities run by individuals or families. Contd...

  13. ISSUES RELATING TO INITIATION(Contd.) b. Domestic industry consisting of small-scale or “unorganized” sector producers. (contd.) • While it may be possible to meet the 50 per cent support requirement by resorting to the statistical sampling techniques referred to in footnote 13 of the Anti-dumping Agreement, this may not solve the problem of the application being expressly supported by 25 per cent of total domestic production. Footnote 13, on the face of it, does not appear to apply to the last sentence of Article 5.4, which deals with the 25 per cent express support requirement. • It has, therefore, been proposed that the Anti-Dumping Agreement must be amended to clarify that footnote 13 also applies to the 25 per cent requirement in the last sentence of Article 5.4.

  14. ISSUES RELATING TO DUMPING MARGIN a. Article 2.2.2 - Hierarchy of options • Article 2.2.2 (i)-(iii) of the AD Agreement sets forth three separate basis for deriving SGA and profits for constructed normal value. • Experience suggests that Authorities go by the option which results in highest dumping margins. • It has, therefore, been proposed that an amendment be carried out in the chapeau of Article 2.2.2 specifying that the three options thereunder have a hierarchical significance and a subsequent option may be resorted to only in the absence of relevant data under the preceding option(s).

  15. ISSUES RELATING TO DUMPING MARGIN(Contd.) b. Application of the Reasonability Test under Article 2.2 • While constructing normal value, certain Authorities have applied the profit margins which did not reflect the profits actually realised by producers / exporters inside and outside India. • It has, therefore, been proposed that in order to ensure the reasonableness of amount of profit under options 2.2.2(i) and 2.2.2(ii) the limitation enshrined in option 2.2.2(iii) i.e. the profit to be reasonable and should not exceed profit normally realized by other exporters or producers on sales of same product or the same general category of products, as appropriate could be imposed.

  16. ISSUES RELATING TO INJURY a. Rules for determination of injury margin shall be introduced • Evaluation of the 15-injury parameters is an exercise separate from injury margin determination • Article 9.1 of the Anti-Dumping Agreement which provides that the anti-dumping duty be less than the margin of dumping if such lesser duty would be adequate to remove the injury to the domestic industry, could be taken as requiring determination of an injury margin.

  17. ISSUES RELATING TO INJURY(Contd.) The following questions have been suggested for deliberation • How will objectivity and transparency be ensured as cost and pricing data of domestic producers are confidential? • Which domestic producers should be considered for price undercutting purposes:- the most efficient domestic producers? • What should be the time period for injury margin determination? • When should price undercutting / underselling appropriately be used? • What factors should determine a reasonable profit for the domestic industry while calculating target price for under-selling margin? • What adjustments should be made between the landed price and the domestic sales price?

  18. ISSUES RELATING TO INJURY (Contd.) b. Elaboration of Injury Factors referred to in Article 3.4 • It has been proposed that some of the mandatory injury parameters require further elaboration for ensuring consistency and predictability while making an assessment of the consequent impact of dumped imports on the domestic products of the like product. • Some injury factors have been defined very loosely. These include productivity, growth, ability to raise capital or investments.

  19. ISSUES RELATING TO INJURY (Contd.) c. Non-Attribution Clause - Elaboration of Injury caused by Factors other than Dumped Imports • The ADA does not give guidance or prescribe methodologies for separating the injurious effects of other factors other than dumped imports. • Are AD Measures justified where dumping is merely “a cause” of injury while other causal factors exist which contribute to injury? • Proposal - It is essential to elaborate Article 3.5 so that guidance is provided while separating the injurious effects of other factors from the injurious effects of dumped imports. • There is a need to specify a standard for establishing causality.

  20. ISSUES RELATING TO INJURY (Contd.) d. Special Care Requirement in respect of determination of threat of injury - Article 3.8 • Article 3.8 mainly provides for the application of AD measures to be decided with special care in cases where injury is threatened by dumped imports. • What constitutes “special care” is not elaborated. • Proposal - Special care needs elaboration so that a clear benchmark is specified.

  21. OTHER ISSUES a. Price Undertakings • Article 8.1 of the AD Agreement provides for termination of proceedings without imposition of provisional measures upon receipt of satisfactory voluntary undertakings from any exporter to revise its prices or cease exports at dumped prices. • Some of the terms in Article 8 are not precise. • Proposal - More specific provisions relating to price undertakings need to be agreed. Some questions have been raised including the following: • How to determine the undertaking ‘price’ to be given in a price undertaking • What shall be treated as ‘satisfactory’ and what shall be ‘unsatisfactory’ price undertakings. • Relevant conditions for non-acceptance of price undertakings shall be more specifically clarified.

  22. OTHER ISSUES(Contd.) b. Rules relating to Reviews • The findings of a judicial review are applicable only in respect of exporters who had sought such a review. • It is India’s experience that in certain cases the judicial review concluded that the underlined anti-dumping investigation has pervasive flaws. • While anti-dumping duty against such exporters may have been removed, those against other exporters who had not sought the review remained in place in spite of the flawed underlying investigation. • Proposal - A new provision needs to be added to Article 11 whereby a review can be undertaken based on positive evidence submitted by any interested party based on the findings of the judicial review establishing that the underlying investigation was flawed.

  23. OTHER ISSUES(Contd.) c. Concurrent Application of Anti-Dumping and Safeguard Measures • Any safeguard measure made applicable on a product may also address, at least in part, the injury resulting from dumping that may have occurred earlier. • The extent to which protection accorded to the domestic industry becomes enhanced if such a safeguard measure is applied over and above the anti-dumping measure needs to be considered. • Proposal - The anti-dumping duty should be adjusted or suspended to take into consideration the additional protection given to the industry by the safeguard measure.

  24. OTHER ISSUES(Contd.) d. Clarification in respect of resort to facts available under Article 6.8 and Annex II of the ADA • It is India’s experience that certain Authorities reject verifiable, and timely submitted information on the plea that other information sought was either not submitted by exporters or did not satisfy the criteria laid down. • Proposal - There should be clear guidance specifying the circumstances in which an investigation authority may resort to total facts available.

  25. OTHER ISSUES(Contd.) e. Elaboration of Article 15 of the ADA • India has submitted a proposal to the Committee on Anti-Dumping Practices for operationalising Article 15 of the ADA. • Following are some of the ways in which the special and differential treatment could be given to imports from developing countries while considering the applications of anti-dumping measures. • Acceptance of Price Undertakings offered by exporters from developing countries. • Application of Lesser Duty Rule. • Raised De-minimis margins and enhanced negligible volumes.

  26. OTHER ISSUES e. Elaboration of Article 15 of the ADA(Contd.) • As part of special provision under Article 15 for developing country members, it has been proposed that de-minimis dumping margin of 2% be raised to 5% for exports from developing countries. Similarly, the negligible volume below which anti-dumping measures on imports from developing countries will not be made applicable should be increased from 3% to 7% from individual countries without there being any requirement of cumulation. • It has been proposed that the standard form of the Semi-Annual Report should include a column wherein members should indicate how special regard was given and what constructive remedies were explored.

  27. THANK YOU

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