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HISTORY OF ANTI-DUMPING LAWS

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HISTORY OF ANTI-DUMPING LAWS
By: Mr. M. GOVINDARAJAN
May 6, 2015
All Articles by: Mr. M. GOVINDARAJAN       View Profile
  • Contents

It appears that the earliest stages of anti-dumping legislature emerged in United States in the late nineteenth century from the anti-trust movement and concerns about the unfair competition in fostering the growth of monopolies.  The Sherman Anti-Trust Act, 1890 declared as  illegal, any effort to combine or conspire to monopolize a particular market.   But, Canada overtook the United States and enacted the first national Anti-dumping law in 1904.   The Canadian law was enacted for the purpose of combating the United States dumping of steel into Canada.  It was also motivated by the goal of finding an alternative to across the Board tariff increases being forcefully done by the Canadian procedures.

In the United States, yet another act known as Clayton Act, 1914 was enacted.  This act made price discrimination an illegal practice if it reduced competition or tended to create a monopoly.  There was already another legislation which is known as Wilson Tariff, 1894.   This made it unlawful for foreign producers to combine or conspire to monopolize the
United States market.  The US making cue of the Canadian law the Anti Dumping Act, 1916 was enacted.  This Act made  it illegal to sell imported goods at prices simultaneously lower than the market value in the exporting country with the intent to destroy or injure an industry in the United States or prevent the establishment of an industry in the United States or of monopolizing any part of trade and commerce in any such articles in the United States.

The Anti-Dumping Act, 1916 is a criminal law with criminal punishments.   This Act was in existence for almost 84 years.   This Act was challenged by European Union and Japan before the Appellate Body of World Trade Organization.   In 2000, the Appellate body of World Trade Organization held that the Anti-dumping Act, 1961 to be inconsistent with GATT 1994.   Japan was forced to challenge the said Act since the provisions of the Act were wrongly to be invoked to combat the import of steel from Japan.

The US enacted another Anti-dumping Act in the year 1921 which was modeled on the Canadian law.   This Act was a deviation from the 1916 anti dumping law.  The 1916 Act targeted predatory dumping, while 1921 was conceived to be a protective measure for the domestic market.

After the end of the II world war, preparatory conferences were held for the purpose of reaching a General Agreement on Trade and Tariff.   This is to be known as GATT.  In this meeting several countries such as Australia, Belgium, Brazil, Canada, China, Cuba, Czechoslovakia, France, India, Netherlands, New Zealand, South Africa, United Kingdom and United Stated participated.  A general agreement was reached in this conference on the need for anti dumping law along the lines proposed in the working document prepared by the United States known as ‘A Suggested Chartered for an International Trade Organization of the United Nations’.

In the Canadian Round Negotiations from 1963 to 1967, Anti dumping laws attracted attention.   The negotiators dealt with three problems viz-

  • Lack of inquiry test in the Canadian Law;
  • The potential for abuse through weak tests of substantive anti-dumping concepts such as material injury, industry and causation; and
  • The potential for abuse through administrative procedural delays, uncertainties and arbitrariness.

The Anti-dumping Code was evolved in the year 1967 and the same was adopted in Europe with an anti dumping legislation of 1968.

After seven years, the Tokyo Round of GATT Negotiations began in 1974.  During negotiations from 1974 to 1979, the parties agreed to a new Anti dumping code that was introduced new amendments to 1964 code.  Again in 1986 Uruguay Round began.   In this 123 countries participated.   The developed countries took an active role in the multi-lateral negotiations that took place in this round.   This round attempted to expand the competence of the agreement to new areas such as services, capital, intellectual property, textile and agriculture. Then came the updated version of GATT known as GATT 1994.  It was by this agreement that the WTO was created with 75 existing members and the European communities becoming the founding members.

 India introduced  liberalized economic policy in the year 1991.  The Indian perspective and the fiscal scenario got completely changed.   The Customs Tariff Act, 1975 was amended to insert Section 9A for the first time.   The said Section 9A was further amended which has taken effect from 01.01.1995, coinciding with the creation of the WTO.  Section 9A gives powers to the Central Government to impose an Anti-Dumping duty when an article is exported by an exporter or producer from any country or territory to India, at less than its normal value.  Section 9A (1A)  also empowers the Central Government to extend the Anti dumping duty to  auch other articles, if they find upon enquiry that a circumvention of anti dumping duty has taken place either by altering the description, or name, or composition of the article, which is subject to such anti dumping duty.   The Central Government is also having the power under Section 9A (2) to impose anti dumping duty on the basis of a provisional estimate of the value and margin, even during the pendency of the determination in accordance with the other sub sections of Section 9A.  These powers are subject to limitation such as time limit.   The anti dumping duty imposed under Section 9A(5)  shall cease to have effect after the expiry of five years from the date of imposition.  The first proviso to this section enables the Central Government to extend the period of such imposition for a further period of five years, if the Central Government is of the opinion, after a review that the cessation of such duty is likely to lead to continuation or recurrence of dumping and inquiry.

At present the Central Government has imposed anti dumping duty in respect of many goods and also review the said orders and if requires extended the period of anti dumping duty as it deems fit.

 

By: Mr. M. GOVINDARAJAN - May 6, 2015

 

 

 
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