Antidumping Committee Andrew Plowman Andrew Nutter

Plan Global Trends Dumping and Antidumping WTO Anti-Dumping Agreement and Doha Member Concerns Proposals Cancun predictions

Trends Significant growth in number of AD actions over the last 20 years Over 3,000 actions initiated since late 70s No worldwide estimate of cost of dumping or AD actions Spread throughout the world Changing composition of AD users and targets Most affected industries

Growth in AD and changing composition

Affected Industries

What is dumping? Article VI of GATT 1994: A product is said to be dumped when its export price is less than its normal value 1) Export price higher than domestic price 2) Export price higher than cost of production

Dumping in practice Legitimate reasons for dumping  Business cycle  Profit maximisation  Cyclical  Defensive Only predation detrimental to welfare  Predatory dumping rare

WTO Anti-Dumping Agreement (ADA) Complex and technical  negotiation compromise Tightened up previous rules and put in place a sunset clause of 5 years ADA sets standards that govern national anti- dumping laws. Dumping is not prohibited and antidumping optional Must show that dumping causes or threatens material injury  Clear causality between dumped imports and injury.

Anti-Dumping WTO does not say dumping is wrong. Does establish certain rules that apply to governments that seek to offset dumping Concept of “unfair trade” At the moment, AD rules do terrible job at distinguishing between market distortions and normal, healthy competition

Cost of AD Fall in trade flow by 30%-50% Increase in market power of domestic industry Increase in cost to consumers Dynamic effects of AD. Worldwide spread. Also cost of initiating and defending. Lower for developed countries.

Concerns US concerns: reforming AD will weaken rules  Agree to reform, as long as preserving the basic concepts, principles and effectiveness of the ADA and its instruments and objectives Worldwide concern of AD “abuses”. New Protectionism? Differing methodologies

Member proposals “Friends of Anti-Dumping Negotiations”  Clarify and improve AD rules  Avoid excessive burden on respondents  Enhance transparency, predictability and fairness 3 issue spaces, transparency, clarification and improvement

Transparency Principle US focus endorsed by Friends and EU Increase accountability Public access to information Government verification Rules for judicial review of AD decisions

Clarification Clarification of key concepts and definitions LESSER DUTY: decrease dumping duty by setting at level that removes injury Major part of industry at 50% Methodology clarification

Improvement Raise de minimus level (currently 2%) EU public interest proposal India proposal to limit frequency of AD action Canada proposes overarching examination of cost of AD actions and underlying trade distortions that are initial purpose of ADA.

Recommendations and Conclusion AD and Competition?  Argument for linkage is strong. Most see AD as artificial competitive advantages created by market-distorting government policies.  earn high profits in sanctuary market and sell abroad at artificially low price  US strongly against EU judges whether measures not disproportionate to benefits

Reform suggestions “Level playing field” arguments better addressed with other tools Domestic industry would have to provide credible evidence of underlying market distortions in the antidumping petition Respondents the right to present evidence that the pricing practices under investigation are due to factors other than market distortions in the home market

Conclusions AD reform critical and amongst the most controversial Domestic pressure groups may stall reform Will have to be linked to concessions in other issue areas Will not advance on Economic arguments!