Anti-Dumping
The Agreement on Implementation of Article 6 ("Anti-Dumping" Agreement) of the 1994 General Agreement on Tariffs and Trade (GATT) took effect with establishment of the World Trade Organization on January 1, 1995. The Anti-Dumping Agreement clarifies and expands Article 6, and the two operate together.
The GATT allowed countries to impose antidumping duties to restrict entry of products of one country introduced into the commerce of another country at less than their fair or normal value. Normal value is defined in the Anti-Dumping Agreement as the exporter's home market price. If such a price is not available, or if the price does not allow for a representative comparison, normal value may be established by 1) using the price for the product when exported to a third country or 2) computing a price based on cost of production for the product, taking into account additional marketing expenses and profits—the "constructed value" method.
The Anti-Dumping Agreement allows countries to act in a way that would normally violate GATT principles of binding a tariff and not discriminating against trading partners—typically anti-dumping actions are directed against individual firms from a particular exporting country. In order to levy an anti-dumping duty, the government of the importing country has to prove that dumping is taking place, calculate the extent of dumping, and show that the dumping is causing injury to the domestic industry. If a dumping investigation results in the imposition of an anti-dumping duty, the exporting firm can agree to raise its export prices (known as a price undertaking) as an alternative to the imposition of an anti-dumping duty.
The Anti-Dumping Agreement introduced several modifications to previous GATT regulations:
- more detailed rules for calculating the amount of dumping,
- more detailed procedures for initiating and conducting anti-dumping investigations,
- rules on the implementation and duration (normally 5 years) of anti-dumping measures, and
- specific standards for dispute settlement panels to apply in anti-dumping disputes.
Member countries must inform the Committee on Anti-Dumping Practices about all preliminary and final anti-dumping actions they take, promptly and in detail. They must report on all investigations twice a year. When differences arise, members are encouraged to consult each other. They can also use the WTO's dispute settlement procedure.
Changes to the Anti-Dumping Agreement aimed at clarifying and improving disciplines are being negotiated under the auspices of the WTO Rules Negotiating Group. Members were asked to indicate which provisions of the Anti-Dumping Agreement they think should be the subject of clarification and improvement. About 150 position papers have been submitted to the WTO Committee on Rules identifying parts of the Agreement that members believe should be changed. These will form the basis for negotiations.
Other Relevant Multilateral Agreements:
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