Anti Dumping Duty – protection of Domestic Industries by WTO

ANTI-DUMPING
ANTI-DUMPING

News

Over the last ten days, the Directorate General of Trade Remedies (DGTR) has initiated anti-dumping investigations or recommended anti-dumping duties against a dozen different chemical, petrochemical and bulk drug products (mostly from China).

Concept :

  • Governments impose anti-dumping duties as a trade remedy measure to protect domestic industries from unfair competition resulting from the dumping of goods by foreign producers.

Dumping:

  • Dumping refers to the practice of exporting goods to another country at prices lower than their normal value, typically the price in the exporter’s domestic market.
  • Dumping can harm the importing country’s domestic industry by undercutting prices, causing material injury, or threatening domestic producers.

Objectives:

  • The main goal of anti-dumping duties is to address trade distortions from dumping and ensure fair competition domestically.
  • It aims to protect domestic industries from unfair trade practices and provide them with a level playing field.

Legal Framework:

  • The World Trade Organization (WTO) Agreement on Anti-Dumping governs the imposition of anti-dumping duties according to international trade rules.
  • Countries investigate dumping and assess its impact on domestic industries before imposing anti-dumping duties.

Countervailing duty v/s Anti-dumping duty

  • Anti-dumping duty is imposed to prevent low-priced foreign goods from damaging the local market.
  • CVD will apply to foreign products that have enjoyed government subsidies, which eventually leads to very low prices.
  • Anti-dumping duty is based on the dumping margin, while CVD relies on the subsidy value of foreign goods.

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