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World Trade Organization Toolkit : Trade Remedies

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(a) Anti-Dumping

Article VI of the GATT describes the general framework through which authorities may impose anti-dumping measures. The provisions of Article VI are supplemented by the Agreement on the Implementation of Article VI of the GATTS 1994, commonly referred to as the Anti-Dumping (AD) Agreement.

The AD Agreement lays down the procedural and substantive requirements which must be observed in order to impose anti-dumping measures.

Substantive requirements

Anti-dumping measures can be imposed only if it is established that an exporting company is dumping and that such dumping is causing or threatens to cause "material injury" to domestic industries of the like products.

A product is said to be dumped if it is introduced into the domestic market of another country at less than its normal value.

As a general rule, the normal value is the comparable price, in the ordinary course of trade, for the "like product" when destined for consumption in the exporting country's home market. However, in some cases where there are no sales of the like products on the domestic market, or when such sales do not permit a proper comparison, the normal value can be a "third country price" or may be constructed by investigating authorities.

To determine whether a product is being dumped, comparison is made between the normal value of the product and its export price. Basics require that this comparison must be fair, i.e. that the prices being compared are those of sales made at the same level of trade.

As a second side of the investigation, the investigating authorities of the importing WTO Member must make a determination of injury. In order to determine whether there is injury, the authorities have to examine the volume of dumped imports (volume effects) and the effect of the dumped imports on prices in the domestic market for like products (price effects) as well as the consequent impact of the dumped imports on domestic producers of the like product. The impact is analysed on the basis of a series of factors including sales, profits, output or production, market share, productivity, return on investments, employment, inventories, etc.

Finally, the AD Agreement requests that there is a causal link between dumped imports and injury, i.e. it must be shown that the dumped imports are, through the effects of dumping, causing injury to the domestic industry.

Procedural requirements

The Agreement requires that anti-dumping measures only be imposed after an investigation has been carried out. The conduct of the investigation is subject to specific rules aimed at protecting the interests of the concerned parties.

Provisional measures may be imposed, i.e. when the investigation has not yet terminated, but they must be based on a positive preliminary determination and must be necessary to prevent injury to the domestic industry during the investigation. Provisional measures may take the form of a duty or a security deposit not greater than the provisionally estimated margin of dumping. The measures may not be imposed sooner than 60 days from the date of initiation and once imposed, should not remain in place longer than four months. However, in cases where the possibility of imposing a duty lower than the dumping margin is examined, the provisional measures may be imposed for six months and extended to a maximum of nine months.

If a positive definitive determination with respect to dumping and injury has been made in accordance with the AD Agreement, anti-dumping duties on the imported product concerned may be imposed.

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