Bridges Weekly Trade News Digest • Volume 10 • Number 41 • 6th December 2006

WTO Reports Increased Use Of Anti-Dumping Measures In First Half Of 2006


WTO Members introduced anti-dumping duties with greater frequency in the first half of 2006 even though the number of anti-dumping investigations continued to decline, according to new data from the WTO Secretariat.

The semi-annual report on anti-dumping, released on 27 November, summarises information submitted by WTO Members to the Committee on Anti-Dumping Practices (ADP).

‘Dumping’ is the term given to the practice of exporting a product at a price lower than that in its own home market. WTO rules allow governments to place extra duties on a product if they can prove that dumping is causing genuine (’material’) injury to competing domestic industry.

The report says that from 1 January to 30 June 2006, 20 Members reported initiating 87 new investigations of whether dumping was occurring — down from 105 during the same period the year before. More than one-third (32) of these investigations were directed against China, substantially up from 23 in the first half of 2005. In comparison, the next most prominent targets of new investigations, the US and Taiwan, faced six apiece.

India and the EU were the most active initiators of investigations into suspect imports, launching 20 and 17 respectively.

Fifteen WTO members reported applying 71 new final anti-dumping measures (generally additional duties). This was an increase from the 55 measures instituted during the first half of 2005. Chinese products, all in the chemicals sector, were the target of 15 of the 71. India and South Korea came in a distant second, with six goods apiece facing extra duties.

China, the top target of anti-dumping duties, also led Members in applying them, introducing 15 sets of new measures in first half of 2006, up from ten the year before. Turkey was second, with 11. During the same period, the EU imposed five new anti-dumping measures, and the US, two.

Developed countries accounted for only 9 of the 71 new final measures, though they were behind 31 of the 87 new investigations. In recent years, developing countries have become increasingly active at filing anti-dumping complaints.

Products most frequently affected by new anti-dumping measures in the first six months of 2006 were in the chemicals, plastics, textiles, and base metals sectors.

Negotiations to redefine rules were at stalemate

At the Doha Ministerial Conference in 2001, WTO Members agreed to launch negotiations on reforming existing WTO rules on anti-dumping. Many governments and trade experts argue that they are flawed and need to be changed to better ensure that they cannot be used as a pretext for duties motivated more by protectionism than by legitimate threats to otherwise competitive industry.

Washington-based Cato Institute Senior Fellow Brink Lindsey says that the problem is that the current rules ask only for proof of a price differential between products sold domestically and products sold as foreign exports. Such international price differentials, Lindsey explains, can exist for a wide variety of reasons, of which government policy allowing companies to subsidise cheap exports by charging high prices at home is only one. This lax definition of price discrimination, he says, allows many countries to pass anti-dumping legislation as a disguised means of combating trade liberalisation.

Before the Doha Round negotiations were suspended in July of this year, several WTO Members had been advocating for tighter disciplines on the introduction and maintenance of anti-dumping duties. However, some countries, notably the US, were reluctant to accept large-scale reform of anti-dumping provisions. Although the talks have now resumed, albeit on a limited basis among Geneva-based trade officials, sources report that the chair of the Negotiating Group on Rules has not yet addressed anti-dumping in his consultations with Members.

The WTO Secretariat’s data on anti-dumping measures in the first half of 2006 is available at http://www.wto.org/english/tratop_e/adp_e/adp_e.htm#statistics.

ICTSD reporting; "Antidumping Negotiations in the Doha Round: Strategy and Tactics," RESEARCH INSTITUTE OF ECONOMY, TRADE AND INDUSTRY (speech), 11 November 2002; "China Targeted by WTO Anti-Dumping Moves," REUTERS, 28 November 2006; "India Initiated Most Anti-Dumping Probes This Year, Says WTO," FINANCIAL EXPRESS, 30 November 2006; "WTO Secretariat Reports New Anti-Dumping Investigations Continue to Decline, While New Final Measures Show Increase," WTO PRESS RELEASES, 27 November 2006.