According
to Wentong Zheng, Anti-Dumping Duty is nothing but a Trade Remedy Instrument
that acts as an indispensable Safety Valve for Protectionist countries.
He elaborates that ‘antidumping’ is a faulty safety valve as it provides for
arbitrary level of protection for the importing country. Such arbitrary
protection results into unnecessary uncertainties for the exporters. The
threshold for activation of antidumping duty is too low i.e. the standard for
determining the injury is too low[1].
He
proposes that antidumping agreement should be replaced by a Country-Specific
Safeguard Measure. Such a Safeguard duty will not only correct the
anomalies existing in the antidumping agreement but would also eliminate the
need to have countervailing duties. It would also address the injury from all
sources such as subsidies etc.
Framework of Country-Specific
Safeguard Approach
Wentong
Zheng proposes a seven pronged strategy in this respect[2]:
1.
The name antidumping is a misnomer as instead of targeting unfair trade, it
actually targets ‘injury’. The proposed safeguard measure should provide
Temporary Trade Protection in the event of injury regardless of whether
the underlying cause of the injury is fair or unfair.
2.
The new Safeguard Measure must have a higher injury standard and must act as a
better safety valve in situations where the domestic market truly deserves
trade protection.
3.
The new Safeguard Measure must not have a non-discrimination requirement.
It should be imposed on a country-by-country basis. This is the reason why such
an approach is called as ‘Country-Specific Safeguard’.
4.
The new Safeguard Measure would not have to provide compensation to countries
affected by the safeguard as long as the safeguard is otherwise consistent with
the WTO.
5.
The new Safeguard Measure will also allow the countries to impose extra
tariff subject to the provisions of WTO agreements. However, the practice
of imposing quantitative restrictions will be done away with.
6.
There is a need to have a Public Policy Clause in such a Safeguard
Measure. The investigating authorities must consider the views and
evidence while deciding whether the imposition of safeguard would be in public
interest or not.
7.
The new Safeguard Measure will have a fixed duration. Once the fixed duration
lapses,
“An
importing country will be allowed to impose a new country-specific safeguard on
the same products for subsequent periods of time not exceeding five years each,
provided that the injury standard continues to be met.[3]”
Traffic Light System and
Country Specific Safeguard: A Comparison
It
is undeniable that the present antidumping regime is heavily inclined towards
the ‘importing country’. With the adoption of strict interpretation in dumping
cases, a change is surely needed in the present antidumping regime.
Both
the Traffic Light System and the Country Specific Safeguard are viable
alternatives in this respect. However, there are some salient features in
Country Specific Safeguard that are indispensable and quite novel. For e.g.
providing temporary trade protection is an essential requirement when the
injury standard is set to be higher because a higher injury standard would
imply that whenever any injury is to occur, immediate actions are required to
be taken.
The
importance of including a non-discrimination requirement cannot be denied under
the Country Specific Safeguard Approach. The duty can be imposed on a
country-by-country basis which would give more leeway to the investigating
authorities in exercising their discretion as to imposition of the duty. But,
such an increase in discretion might prove to be hazardous and
counter-productive in some cases.
Finally,
both the Traffic Light System and the Country Specific Safeguard advocate for
the abolition of the practice of imposing quantitative restrictions. This is
clearly a refreshing and a progressive step.
I
personally feel that best aspects of both the approaches needs to be
incorporated in the present antidumping regime in order to remove the trade
imbalance created by the countries adopting a protectionist approach.
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