Chinmaya IAS Academy – Current Affairs Chinmaya IAS Academy – Current Affairs
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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.
