1. FORM OF REMEDY MEASURES
WTO system allows “protection” in specific
cases by means of trade remedy measures
Anti-Dumping - Additional import duties
Countervailing - Additional import duties
Safeguards - Additional import duties
or quotas
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2. Dumping is defined as
When an exporter sells a product for export to the importing country at a lower price than the price at which the same (or similar) product is sold in its own domestic market
Domestic price of exporter > Export price
Dumping = Price discrimination between national markets
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3. AD and CVD legislation Dumping Injury to the domestic market
How is domestic market defined?
Relation between dumping and injury to the domestic market
Subsidy
Relation between subsidy and injury to the domestic market
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4. SUMMARY OF AD source : WTO
Year initiation Final measures
Total
NOTE: The two columns do not balance due to time periods to
complete investigations
Initiations Final measures
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5. Source: “The economic and Strategic motives for antidumping filing” by Thomas prusa and susan skeath
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6. US-Antidumping law
If a U.S. industry believes that it is being injured by unfair competition through dumping or subsidization of a foreign product, it may request the imposition of antidumping or countervailing duties by filing a petition with
Import Administration (department of commerce)
United States International Trade Commission
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7. US-Antidumping law Steps undertaken in an AD investigation
Petition filed by the firm/firms on behalf of the industry (petitioners must represent at least 25% of domestic production )
ITC preliminary finding
ITA preliminary finding
ITA final finding
ITC final finding
The duties are assessed as a percentage of the value of the imports and are equivalent to the dumping and subsidy margins.
For example, if Commerce finds a dumping margin of 35%, the U.S. Customs Service will collect a 35% duty on the product at the time of importation into the United States in order to offset the amount of dumping or subsidy.
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8. Some Statistics
ITC received a total of 1,430 petitions for AD and CVD during fiscal year
These cases involved 54 billion dollars in trade from countries subject to investigations.
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12. Softwood lumber dispute
US Claim
Artificially low stumpage fees
(With lumber, the U.S. contends that provincial stumpage and, more recently, B.C.’s log export restrictions, provide a subsidy to lumber producers. Other provincial programs may also be alleged to provide subsidies. )
Countervailable subsidies.
Softwood Lumber I: 1982
US authorities decided no subsidy
Softwood Lumber II: 1986
15% provisional duty
Replaced by 15% export tax in MOU
Softwood Lumber III: 1991
Canada unilaterally terminates MOU
Countervailing case filed: Interim bonding requirement
Canada wins appeal against countervailing duty in CUSTA (1993 and 1994)
US revokes duties against Canadian lumber (Aug 1994)
Bilateral consultation process for softwood established
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13. Softwood Lumber April 1996-Softwood Lumber Agreement finalized.
First 14.7 Billion Board Feet (BBF) of softwood lumber exports from Alberta, British Columbia, Ontario, and Quebec would enter the US market duty free.
The first 650 million board feet over 14.7 BBF -tax of $50 per thousand board feet.
Any further exports were subject to a tax of $100 per thousand board feet.
Other provinces- Unrestricted access to the US market.
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14. The Current Softwood Lumber Dispute (Lumber IV)
Following the expiration of the Softwood Lumber Agreement, on April 2, 2001, the U.S. Coalition for Fair Lumber Imports filed a countervailing duty petition and its first anti-dumping petition against Canadian softwood lumber.
Forest Renewal BC grants and assistance under the Job Protection Commission (JPC) to lumber producers were found to be countervailable.
On April 25, 2002, Commerce :The final subsidy rate was determined to be 18.79%. Individual company dumping rates were set as follows: Abitibi 12.44%; Weyerhaeuser 12.39%; Tembec 10.21%; Slocan 7.71%; Canfor 5.96%; West Fraser 2.18%. All other companies will pay the average dumping rate of 8.43%. The combined CVD/AD rate is now set at 27.22%.
On May 2, (ITC): US producers are only threatened with material injury by Canadian lumber shipments to the U.S. Consequently, U.S. Customs are required to refund the bonds and cash deposits posted by Canadian softwood lumber companies prior to May 16, 2002.
On May 22, 2002, Commerce published its final orders in the countervailing duty and anti-dumping case. As a result, the U.S. Customs requires cash deposits for duties on all softwood lumber imported from Canada since May 22, 2002.
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15. WTO and NAFTA Challenges
The federal government, the provinces and industry have launched a number of challenges related to the lumber cases.
Challenges at the World Trade Organization (WTO) consider whether the U.S. has breached its obligations under the WTO.
North American Free Trade Agreement challenges consider whether the U.S. has applied its own trade laws correctly.
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16. Canada-Antidumping law
If an industry in Canada believes that it is being injured by unfair competition through dumping or subsidization of a foreign product, it may request the imposition of antidumping or countervailing duties by filing a petition with
Canada Customs and Revenue Agency (CCRA)
Canada's anti-dumping and countervailing law is contained in the Special Import Measures Act (SIMA).
The Canada Customs and Revenue Agency (CCRA) and the Canadian International Trade Tribunal (Tribunal) are jointly responsible for administering SIMA
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17. Canada-Antidumping law
Steps undertaken in an AD investigation
Petition filed by the firm/firms on behalf of the industry (petitioners must represent at least 25% of domestic production )
CCRA starts an investigation (Sends a copy to the Tribunal)
Tribunal’s preliminary Injury finding
CCRA preliminary dumping/subsidizing finding
CCRA final dumping/subsidizing finding
Tribunal’s final injury finding
The duties are assessed as a percentage of the value of the imports and are equivalent to the dumping and subsidy margins.
The process takes about seven months from when the CCRA starts an investigation until the Tribunal makes a final decision on the injury matter.
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18. Summary- Comparison Historical Origins-First AD case
Canada Statute: to protect against steel dumped in Canada by US firms
United States Act and U.S. Tariff Act of 1921: to protect against post WW1 dumping from Europe
India-national law on anti-dumpingin place since 1985.
However, the first case of anti-dumping was initiated only in 1992
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19. Summary- Comparison AD Initiations
Country/Year
1995
1996
1997
1998
1999
2000
2001
2002
Total
Canada 11 5 14 8 18 21 25
107
India 6 13 27 65 41 79
331 US 22 15 36 47 76 35
292
As reported by the members
Point to note: Volume of imports covered
Statistics are per country
Source:
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