Week-9-10-for-WTO--20100510(Trade-in-Goods---AD).ppt

1、Lecturer: Liu Qian Date: May. 10-17, 2010,WTO and Case Study (10),Trade in Goods - Tariff Measures - Non-tariff Measures: - Anti-Dumping,Learning Objectives,Statistics on anti-dumping cases WTO rules on anti-dumping Determination of dumping Procedures on anti-dumping case,AD (Anti-Dumping),Statistic

2、s on anti-dumping cases,Statistics show that from 1995 to 2008 a total of 1979 anti-dumping cases happened in the world. And China accounts for 14% of the cases, with a total number of 600, at loss of more than 18 billion dollars exports. China has been the biggest victim of this measure in the worl

3、d until 2003. One-seventh registered cases of anti-dumping in the WTO are related with China. China also initiated several anti-dumping investigations on her counterparts, but no much effect because she is the one that needs to exports.,China suffered from 300 million USD, initiated by US, aided by

4、the same Law Firm, on garlic, honey, and bikes. On garlic issue, China was levied 376% tariff duty; on honey and bikes issues, China suffered 20 million and 180 million USD. China has also actively launched 34 anti-dumping cases, on imported goods. In the past 10 years, China has won some 37.5 perce

5、nt anti-dumping cases with the no-tariff or no-loss ends.,Since 1979 when the first anti-dumping against China was initiated to present, EU has launched 142 cases of trade remedy investigations against China, among which there are 139 cases of anti-dumping investigations, two cases of safeguard meas

6、ures, and one case of special safeguard measures. No anti-subsidies investigation against China has ever been launched. Among WTO member countries, USA and EU are two members that have launched the largest number of anti-dumping probes against China.,China is vulnerable in AD war,Chinas major produc

7、ts suffered from anti-dumping: - Mental, minerals, chemicals, mechanical and electrical products (machinery, color TV, energy-saving bulbs, locks) , agricultural products (garlic), and footwear. At present: -Steel products. In the near future: textile products and garments,AD war creates serious dis

8、tortion on international trade and fair competition; It has been used as a non-tariff barrier and it encourage rent-seeking behavior by importing competing firms; Chinese firms lack of international trade experiences and financial capabilities to protect themselves; Many products have been blocked i

9、n the global markets; The AD measures and threatening to take retaliatory measures may lead the exporting firms to change products or seek new markets,EU Anti-dumping: Initiating 372 anti-dumping cases (against China, India, South Korea, Indonesia, China Taibei, Russia, Thailand, Malaysia, Ukraine,

10、and USA) , 65 cases where EU is under anti-dumping investigations (by India, China, Brazil, Egypt, and Malaysia).,Article VI Of GATT 1994 AGREEMENT ON IMPLEMENTATION OF ARTICLE VI OF THE GENERAL AGREEMENT ON TARIFFS AND TRADE 1994 - 18 Articles - 2 ANNEXES,WTO rules on anti-dumping,Framework of Anti

11、-Dumping General provisions (Articles 1 and 18) Substantive provisions on anti-dumping (Articles 2, 3 and 4) Procedural provisions (Articles 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16,17 and ANNEXES I and II ),GATT (Article 6) allows countries to take action against dumping. The Anti-Dumping Agreemen

12、t clarifies and expands Article 6, and the two operate together. They allow countries to act in a way that would normally break the GATT principles of binding a tariff and not discriminating between trading partners typically anti-dumping action means charging extra import duty on the particular pro

13、duct from the particular exporting country in order to bring its price closer to the “normal value” or to remove the injury to domestic industry in the importing country.,What is dumping 4-1 Determination of normal value 4-2 Determination of export price 4-3 Fair comparison of normal value and expor

14、t 4-4 Calculation of dumping margins and duty assessment Procedural requirements,Determination of dumping,What is dumping？,Dumping is, in general, a situation of international price discrimination, where the price of a product when sold in the importing country is less than the price of that product

15、 in the market of the exporting country. Thus, in the simplest of cases, one identifies dumping simply by comparing prices in two markets. However, the situation is rarely, if ever, that simple, and in most cases it is necessary to undertake a series of complex analytical steps in order to determine

16、 the appropriate price in the market of the exporting country (known as the “normal value”) and the appropriate price in the market of the importing country (known as the “export price”) so as to be able to undertake an appropriate comparison.,Conception of Dumping,The contracting parties recognize

17、that dumping, by which products of one country are introduced into the commerce of another country at less than the normal value of the products, is to be condemned if it causes or threatens material injury to,GATT 1947 Article VIAnti-dumping and Countervailing Duties,an established industry in the

18、territory of a contracting party or materially retards the establishment of a domestic industry. For the purposes of this Article, a product is to be considered as being introduced into the commerce of an importing country at less than its normal value, if the price of the product exported from one

19、country to another (a) is less than the comparable price, in the ordinary course of trade, for the like product when destined for consumption in the exporting country, or,Conception of Dumping,关税与贸易总协定(GATT 1947) 第6条 反倾销税和反补贴税 1各缔约方认识到，用倾销的手段将一国产品以低于正常价值的办法引入另一国的商业，如因此对一缔约方领土内一己建立的产业造成实质损害或实质损害威胁，或实

20、质阻碍一国内产业的新建，则倾销应予以谴责。就本条而言，如自一国出口至另一国的一产品的价格符合下列条件，则被视为以低于其正常价值的价格进入一进口国的商业。 (a)低于正常贸易过程中在出口国中供国内消费时的可比价格，或,(b)in the absence of such domestic price, is less than either (i)the highest comparable price for the like product for export to any third country in the ordinary course of trade, or (ii)the c

21、ost of production of the product in the country of origin plus a reasonable addition for selling cost and profit. Due allowance shall be made in each case for differences in conditions and terms of sale, for differences in taxation, and for other differences affecting price comparability.,Conception

22、 of Dumping,(b)如无此种国内价格，则低于 ()正常贸易过程中同类产品出口至第三国的最高可比价格；或 ()该产品在原产国的生产成本加上合理的销售成本和利润。 但应适当考虑每种情况下销售条款和条件的差异、征税的差异以及影响价格可比性的其他差异。,关税与贸易总协定(GATT 1947)第6条 反倾销税和反补贴税,Article2 Determination of Dumping 2.1For the purpose of this Agreement, a product is to be considered as being dumped, i.e. introduced into

23、 the commerce of another country at less than its normal value, if the export price of the product exported from one country to another is less than the comparable price, in the ordinary course of trade, for the like product when destined for consumption in the exporting country.,AGREEMENT ON IMPLEM

24、ENTATION OF ARTICLE VI OF THE GENERAL AGREEMENT ON TARIFFS AND TRADE 1994,2.2When there are no sales of the like product in the ordinary course of trade in the domestic market of the exporting country or when, because of the particular market situation or the low volume of the sales in the domestic

25、market of the exporting country 1, such sales do not permit a proper comparison, the margin of dumping shall be determined by comparison with a comparable price of the like product when exported to an appropriate third country, provided that this price is representative, or with the cost of producti

26、on in the country of origin plus a reasonable amount for administrative, selling and general costs and for profits.,1 Sales of the like product destined for consumption in the domestic market of the exporting country shall normally be considered a sufficient quantity for the determination of the nor

27、mal value if such sales constitute 5 per cent or more of the sales of the product under consideration to the importing Member, provided that a lower ratio should be acceptable where the evidence demonstrates that domestic sales at such lower ratio are nonetheless of sufficient magnitude to provide f

28、or a proper comparison.,关于实施1994年关税与贸易总协定第6条的协定,第2条 倾销的确定 2.1 就本协定而言，如一产品自一国出口至另一国的出口价格低于在正常贸易过程中出口国供消费的同类产品的可比价格，即以低于正常价值的价格进入另一国的商业，则该产品被视为倾销。,2.2 如在出口国国内市场的正常贸易过程中不存在该同类产品的销售，或由于出口国国内市场的特殊市场情况或销售量较低1，不允许对此类销售进行适当比较，则倾销幅度应通过比较同类产品出口至一适当第三国的可比价格确定，只要该价格具有代表性，或通过比较原产国的生产成本加合理金额的管理、销售和一般费用及利润确定。 1出口国

29、国内市场中供消费的同类产品的销售如占被调查的产品销往进口成员销售的5或5以上，则此类销售通常应被视为确定正常价值的足够数量，但是如有证据表明较低比例的国内销售仍属进行适当比较的足够数量，则可接受该较低比例。,General rule The normal value is generally the price of the product at issue, in the ordinary course of trade, when destined for consumption in the exporting country market. In certain circumstanc

30、es, for example when there are no sales in the domestic market, it may not be possible to determine normal value on this basis. The Agreement provides alternative methods for the determination of normal value in such cases.,4-1 Determination of normal value,Sales in the ordinary course of trade One

31、of the most complicated questions in anti-dumping investigations is the determination whether sales in the exporting country market are made in the “ordinary course of trade” or not. One of the bases on which countries may determine that sales are not made in the ordinary course of trade is if sales

32、 in the domestic market of the exporter are made below cost. The Agreement defines the specific circumstances in which home market sales at prices below the cost of production may be considered as not made in the ordinary course of trade, and thus may be disregarded in the determination of normal va

33、lue (Article 2). Those sales must be made at prices that are below,per unit fixed and variable costs plus administrative, selling and general costs, they must be made within an extended period of time (normally one year, but in no case less than six months), and they must be made in substantial quan

34、tities. Sales are made in substantial quantities when (a) the weighted average selling price is below the weighted average cost; of (b) 20% of the sales by volume were below cost. Finally, sales made below costs may only be disregarded in the determination of normal value where they do not allow for

35、 recovery of costs within a reasonable period of time. If sales are below cost when made but are above the weighted average cost over the period of the investigation, the Agreement provides that they allow for recovery of costs within a reasonable period of time.,Insufficient volume of sales If ther

36、e are sales below cost that meet the criteria set out in the Agreement, they can simply be ignored in the calculation of normal value, and normal value will be determined based on the remaining sales. However, exclusion of these below-cost sales may result in a level of sales insufficient to determi

37、ne normal value based on home market prices. It is obvious that, in the case where there are no sales in the exporting country of the product under investigation, it is not possible to base normal value on such sales,and the Agreement recognizes this. However, it is also possible that, while there a

38、re some sales in the exporting countrys market, the level of such sales is so low that its significance is questionable. Thus, the Agreement recognizes that in some cases sales in the home market may be so low in volume that they do not permit a proper comparison of home market and export prices. It

39、 provides that the level of home market sales is sufficient if home market sales constitute 5 per cent or more of the export sales in the country conducting the investigation, provided that a lower ratio “should” be accepted if the volume of domestic sales nevertheless is “of sufficient magnitude” t

40、o provide for a fair comparison.,Alternative bases for calculating normal value Two alternatives are provided for the determination of normal value if sales in the exporting country market are not an appropriate basis. These are (a) the price at which the product is sold to a third country; and,(b)

41、the “constructed value” of the product, which is calculated on the basis of the cost of production, plus selling, general, and administrative expenses, and profits. The Agreement contains detailed and specific rules for the determination of a constructed value, governing the information to be used i

42、n determining the amounts for costs, expenses, and profits, the allocation of these elements of constructed value to the specific product in question, and adjustments for particular situations such as start-up costs and non-recurring cost items.,Constructed normal value The determination of normal v

43、alue based on cost of production, selling, general and administrative expenses, and profits is referred to as the “constructed normal value” .The rules for determining whether sales are made below cost also apply to performing a constructed normal value calculation. The principal difference is the i

44、nclusion of a “reasonable amount for profits” in the constructed value.,Third country price as normal value The other alternative method for determining normal value is to look at the comparable price of the like product when exported to an appropriate third country, provided that price is represent

45、ative. The Agreement does not specify any criteria for determining what third country is appropriate.,Indirect exports In the situation where products are not imported directly from the country of manufacture, but are exported from an intermediate country, the Agreement provides that the normal valu

46、e shall be determined on the basis of sales in the market of the exporting country. However, the Agreement recognizes that this may result in an inappropriate or impossible comparison, for instance if the product,is not produced in the exporting country, there is no comparable price for the product

47、in the exporting country, or the product is merely transshipped through the exporting country. In such cases, the normal value may be determined on the basis of the price of the product in the country of origin, and not the price in the exporting country.,Non-Market Economies In the particular situa

48、tion of economies where the government has a complete or substantially complete monopoly of its trade and where all domestic prices are fixed by the State, GATT 1994 and the Agreement recognize that a strict comparison with home market prices may not be appropriate. Importing countries have thus exe

49、rcised significant discretion in the calculation of normal value of products exported from non-market economies.,Case Study: China- South Korea lighter case,one-off gas fuelled pocket lighter, was exported from China to South Korea. On Feb. 27, 1997, South Korea . And it is made known on Mar. 10, 19

50、97. On Mar. 18, 1997, South Korea sent questionnaires to Chinese exporters and producer and consumers, with the deadline of Apr. 30.,Preliminary determination was made on May 20, 1997, 31.39% of anti-dumping duty was to be imposed as of June 5, 1997. On Aug. 26, 1997, a hearing was held in South Kor

51、ea. On Sept. 26, 12997, final determination was made. Requesting to impose a five year of 32.84% anti dumping duty. In course of determination, South Korea refused to regard China as a Market Economy Status. Therefore, Thailand was appointed as third country to determine dumping and calculate margin

52、s of dumping.,General rule The export price will normally be based on the transaction price at which the foreign producer sells the product to an importer in the importing country. However, as is the case with normal value, the Agreement recognizes that this transaction price may not be appropriate

53、for purposes of comparison.,4-2 Determination of export price,Exceptions There may be no export price for a given product, for instance, if the export transaction is an internal transfer, or if the product is exchanged in a barter transaction. In addition, the transaction price at which the exporter

54、 sells the product to the importing country may be unreliable because of an association or a compensatory arrangement between the exporter and the importer or a third party. In such a case, the transaction price may not be an arms-length market price, but may be manipulated, for instance for tax pur

55、poses. The Agreement recognizes that, in such cases, an alternative method of determining an appropriate export price for comparison is needed.,Alternative method of calculation The Agreement provides that in circumstances where there is no export price, or where the export price is unreliable due t

56、o an association or compensatory arrangement between the exporter and the importer or a third party, an alternative method may be used to determine the export price. this results in a “constructed export price”, and is calculated on the basis of the price at which the imported products are first res

57、old in an independent buyer. If the imported product is not resold to an independent buyer, or is not resold as imported, the authorities may determine a reasonable basis on which to calculate the export price.,Basic requirements The Agreement requires that a fair comparison of the export price and

58、the normal value be made. The basic requirements for a fair comparison are that the prices being compared are those of sales made at the same level of trade, normally the ex-factory level, and of sales made at as nearly as possible the same time.,4-3 Fair comparison of normal value and export price,

59、As part of the Agreements requirements regarding transparency and participation, the investigating authorities are required to inform parties of the information needed to ensure a fair comparison, for instance, information regarding adjustments, allowances, and currency conversion, and may not impose an “unreasonable burden of proof” on parties.,Allowance To ensure that prices are comparable, the Agreement requires that adjustments be made to either the normal value, or the export price, or both, to account for differences in the product, or in the circumstances of sale, in the impor