2007 Seoul International Forum on Trade Remedies K T Chacko Director Indian Institute of Foreign Trade

REFORM OF TRADE REMEDY RULES b Increased reliance on Trade Remedies being witnessed, especially, in the context of Reduction of Tariff Levels. b Enhanced import competition leads to domestic pressures seeking:- Strengthening of Trade Remedy RulesStrengthening of Trade Remedy Rules Vigorous implementation of Trade LawsVigorous implementation of Trade Laws A balanced approach is essentialA balanced approach is essential 1

REFORM OF TRADE REMEDY RULES – Contd…. b Implementation of the Agreements on AD/subsidies included in Doha Round as the need for clarifying and improving the Disciplines was recognized. b Steps needed to ensure Trade Remedy Measures do not act as Barriers Beyond the scope envisaged. b Similarly, clarification/ amplification wherever needed should be incorporated. 2

Issues Related to Initiation of AD Investigation b Back to Back Anti-dumping Investigation: Specific Provision needed to be incorporated in AD Agreement to the effect that such investigations should not be conducted within 365 days of negative finding in a prior investigation on the same product or a category of products.Specific Provision needed to be incorporated in AD Agreement to the effect that such investigations should not be conducted within 365 days of negative finding in a prior investigation on the same product or a category of products. b Domestic Industry of small-scale/ unorganized sector producers: Difficult to meet the norm of application being supported by 25% of total domestic production. The footnote 13 of Art. 5.4 should be explicitly made applicable.Difficult to meet the norm of application being supported by 25% of total domestic production. The footnote 13 of Art. 5.4 should be explicitly made applicable. 3

b Prohibition on zeroing of dumping margins: Issue arises when AD investigators make multiple comparisons of Export Price and normal value and they aggregate the results to calculate dumping margins, while counting as zero where the values are negative.Issue arises when AD investigators make multiple comparisons of Export Price and normal value and they aggregate the results to calculate dumping margins, while counting as zero where the values are negative. Explicit provision needed in Art to address the above.Explicit provision needed in Art to address the above. 4 Issues Related to Initiation of AD Investigation – Contd…

b Tendency to impose Anti-Dumping duty and CVD, simultaneously on the same product though inconsistent with Art. VI.5 Amplification of the Rules essential. b What should be deemed as sufficient evidence to justify initiation of investigation – Art. 5.3 is not explicit on the nature of examination to be carried out. 5 Issues Related to Initiation of AD Investigation – Contd…

b Duty may be less than Dumping Margin if such lesser duty would be adequate to remove injury to domestic industry- The above is in the nature of best endeavour clause and no Rules have been framed to act as guidelines for Anti-Dumping Authorities.The above is in the nature of best endeavour clause and no Rules have been framed to act as guidelines for Anti-Dumping Authorities. Non-application of “lesser duty Rule” tends to protect the injured domestic Industry more than what is adequate.Non-application of “lesser duty Rule” tends to protect the injured domestic Industry more than what is adequate. 6 LESSER DUTY & INJURY MARGIN

b Many Economists/ others feel – “lesser duty Rule” be made mandatory. b This in-turn would require Members to agree on disciplines for determination of “injury margin”. b Various proposals have been presented, so far. 7 LESSER DUTY & INJURY MARGIN – Contd…

b Felt need to segregate injury caused by factors other than dumped imports (Art. 3.5 – needs elaboration b Guidance for distinguishing the injurious effects of other factors from that caused by dumped imports. b Further, there is a need to specify appropriate standard for establishing causality between dumped imports and material injury. 8 LESSER DUTY & INJURY MARGIN – Contd…

b No provision exists to seek review based on judicial Review conducted at the instance of other exporters. The alternative of invoking Dispute Settlement is time consuming. 9 RULES RELATING TO REVIEWS

b More flexible Rules should apply to Developing Countries in order to terminate Investigation. b The Rule that volume of dumped imports must be less than 3% of the imports of like product needs upward revision say to 7%. b Secondly, the cumulation requirement that countries individually account for 3% of imports and should collectively account for less than 7% of imports should not apply if a Developing Country Member is found to account for less than 7% of total imports. 10 Developing Countries – Special & differential Treatment

b In spite of the existence of Art that no CVD shall be levied in excess of the amount of subsidy found to exist Eligible subsidies being captured instead of subsidies availed/ received.Eligible subsidies being captured instead of subsidies availed/ received. Non deduction of expenses related to getting Refunds.Non deduction of expenses related to getting Refunds. Proposals made to mitigate the above.Proposals made to mitigate the above. 11 SUBSIDIES AGREEMENT

b Existing Rules require info. On exact amounts of inputs consumed in Production for availing of duty drawback. This is impractical in DCs/LDCs. Hence, the plea to allow national Averages based on key elements. b Duty drawback entitlements are high due to high incidence of indirect taxes in many economies. There is a need to appreciate this and factor the same while conducting investigations. 12 SUBSIDIES AGREEMENT – Contd….