A.
Dumping of the actual product
B.
Material Injury to the Domestic Industry in the importing country
C. Causation between Dumping of the Product and
Material Injury
This
looks simple and noble enough. However, not everything is noble about
anti-dumping duty. Today a lot of countries use anti-dumping measures for
promoting protectionism and creating a trade imbalance.[2]
If we accept this statement at its face value, then the logical question would
be to ask what are the remedies that are available to the person or persons on whose
goods the anti-dumping duty is being imposed or what are the remedies that
exist against the anti-dumping duty?
There
are various measures through which the exporters accused of dumping can
circumvent or avoid the imposition of anti-dumping duties[3].
Let us discuss some of the common measures:
1. Minor Modification
Usually,
when antidumping duty is imposed, it is being imposed on a product belonging to
a specific category. If the exporter can slightly alter the form and the
packaging of the product so as to distinguish the ‘old product’ from the ‘new
product’ such that the modified ‘new product’ ceases to become a ‘like product’
of the original product, then in such cases, the product is regarded as outside
the scope of anti-dumping order[4].
What the investigating authorities see in such cases is that whether the
product has been substantially transformed to become a different product
from the original product or merely modified to avoid the imposition of
antidumping duties?
2. New Generation Products
This
is similar to ‘Minor Modification’. In such products, minor changes relating to
the product design are made and some additional features are added to the
product[5].
3. Re-labelling
The
product is relabelled in order to hide its true origin[6].
When
antidumping duty is being imposed on an exporter, many times, the exporter
decides to stop exporting the product. The exporter, in turn, establishes its
production unit in the importing country itself. The product is assembled and
manufactured in such a domestic unit. Such a process makes sure that there is
no importation of the product. Thus the antidumping duty can be avoided in such
cases[7].
When
antidumping duty is imposed on one or some of the major components of a
product, then the important components are incorporated into another product
that is not covered by the anti-dumping duty[8].
6. Trans-Shipment
Under
such a method, the exporter when faced with an antidumping order establishes a
production unit in a third country so as to assemble and manufacture the
product in the third country and export it to the importing country. If the
importing country cannot impose antidumping duty from the products from the
third country, then in such cases, the antidumping duty could be avoided by the
exporter.
7. Multiple Product Categories
Some
exporters create multi-product companies of similar products. The duty is
imposed only on one of these multi-products. Pre-existing Duties on all the
other products is sometimes circumvented by such companies[9].
8. Creation of a ‘Fictitious
Market’
When
faced with an antidumping order, sometimes the exporters tend to create a
fictitious market by decreasing their Home Market Price in order to lower or
eliminate the dumping margins[10].
9. Country Hopping
This
is an advanced form of Trans-Shipment or Third Country Circumvention. Under
this the production operation is moved from the country that has been subject
to AD duty to a third country where the exporter produces the like product by
manufacturing its components in multiple countries. It is interesting to note
that many countries have enacted legislations that regard Country hopping same
as Trans-Shipment. The manner in which the manufacturing takes determines
whether the antidumping duty could be avoided by the exporter or not[11].
10. Screwdriver Approach
When
antidumping duty is being imposed on a product, the exporter while adopting
such an approach dissembles the product into various components, exports them
to the importing country and again assembles those components into the final
product in a very less span of time. The approach is called ‘Screwdriver’
because many times the exporters use screwdrivers and other such tools to
re-assemble the dissembled product in the importing country, thereby avoiding
the antidumping duty[12].
International Trade Law Notes
[1] J.H.H. Weiler and Sungjoon Cho,
Anti-Dumping and Subsidies, visited at http://www.jeanmonnetprogram.org/courses/wto/docs/WTO_2006_UnitXII_DumpingandSubsidies_Revised.pdf
[2] Marie Lousie Hurabiell, Protectionism
Versus Free Trade: Implementing the GATT Antidumping Agreement in the United
States, 6 U.PA.J.INT'LBUS.L. 567 (1995).
[3] Henrik Olsson, Circumvention of
EC Anti-Dumping Measures, visited at http://lup.lub.lu.se/luur/download?func=downloadFile&recordOId=1560968&fileOId=1565483
[4] Yanning Yu, Circumvention and
Anti-Circumvention Measures: The Impact of Anti-Dumping Practice in
International Trade Law, Kluwer Law International, 2008.
[5] Ibid.
[6] Yanning Yu, Circumvention and
Anti-circumvention in Antidumping Practice: A New Problem in China's Outbound
Trade, Journal of World Trade 41(5): 1015-1041, 2007.
[7] Mitsuo Matsushita, Some
International and Domestic Antidumping Issues, 5 ASIAN J. WTO & INT’L HEALTH
L. & POL’Y 249 (2010).
[8] Lucia Ostoni, Anti-Dumping
Circumvention in the EU and the US: Is There a Future For Multilateral
Provisions Under the WTO?, visited at http://ir.lawnet.fordham.edu/cgi/viewcontent.cgi?article=1192&context=jcfl
[9] Yi Lu, Zhigang Tao and Yan Zhang,
How Do Exporters Respond to Antidumping Investigations?, Seminar Paper,
National University of Singapore (visited at http://www.fas.nus.edu.sg/ecs/events/seminar/seminar-papers/20Mar13.pdf )
[10] Ibid.
[11] Ibid.
[12] GATT, EEC-Regulation on Imports of
Parts and Components, L/6657 - 37S/132 (22 March 1990), Panel Report.
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