Review and Revocation of Anti-Dumping Measures
ABSTRACT In today’s globalised economy dumping is one of the most controversial issues. The Anti-Dumping Agreement of the WTO contains provisions relating anti-dumping measures. This article deals with provisions for review and revocation of Anti-dumping measures before the Uruguay Round and the Changes brought after the Uruguay Round. It also classifies the review of anti-dumping measures into Interim review, Sunset review and New Comer review. It discusses various issues which are at the helm of the affairs of the Anti-dumping with the help of relevant case-laws. The Article also examines in brief the provisions relating to review of Provisional measures and review of Price-Undertaking. It communicates in detail the Sunset Review of the 2004 Oil Country Tubular Goods Case. The Article argues the Draft Amendment to WTO Anti-Dumping Agreement and provides suggestions for improving the efficiency of current provisions. In the end, the conclusion emphasizes on the preservation of Balance of interest among WTO members. It addresses the need to settle and remove the ambiguities which gives unguided and uncontrolled discretion.
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REVIEW AND REVOCATION OF ANTI-DUMPING MEASURES REVIEW AND REVOCATION OF ANTI-DUMPING MEASURES
*Sangharsh PandeySangharsh Pandey1 1
“Unfair Competition is selling cheaper than someone else”2
Everyman’s Guide to Contemporary Economic Jargon,
In GROWTH, ADVERTISING AND THE CONSUMER (1964)
The Anti-Dumping Agreement (hereinafter referred as “ADA”) is often considered to be the
most complex and technical agreement of the WTO.3 This Paper will analyse the
circumstances in which review and revocation of anti-dumping measures should be done
along with the help of judgments given by Panel and the Appellate Body Report. In the
globalised economy dumping is one of the most controversial issues. In Oxford Dictionary,
‘dumping’ is defined as sale of goods in foreign market at low price.4 Dumping has
traditionally been defined as the type of price discrimination between national markets,5 in
which a producer sells at a lower price abroad than in his home market (price dumping). It is
often considered unfair 6 that a producer, who benefits from protection in his home market
and therefore can charge high prices there, subsequently uses the artificially high profits
generated on the protected home market to subsidize low-priced export sales. He is perceived
to thereby unfairly compete with domestic producers in the- open- importing country market
which cannot afford such low prices.
1 The author is Final Year Student of Hidayatullah National Law University, Raipur, Chhattisgarh. He can be
reached at firstname.lastname@example.org.
2 Patrick.F.J.Macror, Arthur E. Appleton, Michael G. Plummer, The World Trade Organization-Legal,
Economic & Political Analysis, Chapter 40, “Anti-Dumping and Competition Law”, p.no.67, Springer, Vol. II,
3 Durling and Nicely, Understanding the WTO Anti-Dumping Agreement: Negotiating History and Subsequent
Interpretation (2002) 2, note that the ADA may be the most important substantive agreement from the Uruguay
4 The Concise Oxford Dictionary, (10th Edn.). Article VI and Anti-dumping Agreement however; have given a
specific definition of dumping.
5 Viner, Dumping, A Problem in International Trade (1966 edn) 3; Dale, Anti-Dumping Law in a Liberal Trade
Order (1980) 1.
6 As originally envisaged by economists such as Viner, note 2 above, anti-dumping action would be justified
against predatory dumping only. However, predatory dumping has never been proven to exist. Anti-dumping
laws have also seldom contained a predatory intent requirement, presumably because of recognition of the
difficulty of proving such intent.
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Article VI of GATT defines “dumping” as the sale of goods in an importing nation at a price
below their “normal value”, which entails either price discrimination in favour of buyers in
the importing nation or sales below (roughly) long run average cost.7
The focus on the effects of dumping, on the domestic industry in the importing country led to
the early realization that protective measures against dumping should only be permissible if
such dumping causes injury in the importing country. This conclusion was drawn almost from
the date of enactment of the first national anti-dumping laws at the beginning of the twentieth
century.8 Therefore, the national anti-dumping laws required two tests before the importing
country could impose so-called anti-dumping duties: there had to be dumping and such
dumping had to cause injury in the importing country.
However, the methods used to assess dumping and injury as well as investigatory procedures
differed substantially among the countries that used such laws. This divergence, and the
growing realization that anti-dumping laws, as applied, had the potential to become
significant barriers to international trade, created international interest in dumping. It was not
until the end of the Second World War, however, that binding international rules were
developed. Such rules were implemented as part of the 1947 General Agreement on Tariffs
and Trade (GATT).
GATT does not “outlaw” dumping but it does “recognise” that dumping is to be condemned
under certain circumstances. In other words, GATT rules do not prohibit injurious dumping,
although they condemn it.9 However, they do allow country in which a product is dumped to
take protective action if it can establish that the product is dumped and thereby causes injury
to the domestic industry of that product. To a certain extent this importing country emphasis
follows logically from the definition of dumping as price discrimination practiced by private
individuals. The WTO addresses governmental behaviour and therefore could not possibly
7 GATT, Article VI(1) [now “GATT 1994,” reprinted in full in John Jackson, William Davey, and Alan Sykes,
Documents Supplement to Legal Problems of International Economic Relations (St. Paul, MN:West, 1995)
pp.15-78]. “Normal value” is equal to the price charged by the same firm for identical or similar merchandise in
its home country or in third country markets, or to the “cost of production” for the goods “plus a reasonable
addition for selling cost and profit.” Id. Cost of production is understood to include an allocation of fixed costs
and is thus a very rough approximation to what economists would term long-run average cost.
8 See for more detail Vermulst, (1986) 7 New York Law School Journal of International and Comparitive Law
9 Art VI: 1 GATT 1994.
prohibit dumping by private enterprises.10 Moreover, importing countries may welcome
dumped imports because their user industries and consumers will benefit from the low prices.
GATT 1947 applies only to goods. This implies that dumping of services is not covered.11
Since 1947, anti-dumping has received elaborate attention in the GATT/WTO on several
occasions. Following a 1958 GATT Secretariat study of national anti-dumping laws, a Group
of Experts was established that in 1960 agreed on certain common interpretations of
ambiguous terms of Article VI. Moreover, in an ambitious move, an Anti-Dumping Code was
negotiated during the 1967 Kennedy Round and signed by 17 parties. The Code was revised
during the Tokyo Round. The Tokyo Round Code had 25 signatories, counting the EC as
one.12 Although the 1979 Code was not explicitly mentioned in the Ministerial Declaration
starting the Uruguay Round, fairly early in the negotiations a number of GATT Contracting
Parties, notably the United States, Japan, Korea, Hong Kong and the EC proposed changes-
sometimes radical ones- to the 1979 Code. These led to the new ADA.
As the ADA forms part of the single package, all WTO members are automatically members
of and bound by the ADA. This occasionally leads to the misunderstanding that the WTO
rules oblige WTO members to adopt anti-dumping legislation, which is not correct. However,
WTO members that do adopt and utilize anti-dumping legislation must do so in accordance
with the provisions of the ADA.
Article VI of GATT 1994 does not prohibit anti-dumping per se as illegal, it only recognises
the right of the importing country to impose anti-dumping duties within some limitations:-
1) One of the limitation is to determine that:
(a) The product in question is being dumped,
10 Compare GATT Analytical Index, 223 (vol 1 1995):
‘[i]n discussions at the Review Session in 1954-55, in connection with the rejection of a proposal to add a clause
specifically obligating contracting parties to prevent dumping by their commercial enterprises, it was agreed to
add the following statement to the working Party’s Report:
“In connexion with the effect of Article VI on the practice of dumping itself, they agreed that it follows from
paragraph 1 of Article VI, that contracting parties should, within the framework of their legislation, refrain from
encouraging dumping, as defined in that paragraph, by private commercial enterprises.”
See also, Jackson, World Trade and the Law of GATT (1969) 401-424.
11 Ibid 404-405. It may be noted that the WTO General Agreement on Trade in Services (WTO GATS) does not
contain provisions on dumping of services.
12 See GATT, B.I.S.D., 36th Supp., at 435 (1990). The Parties were: Australia, Austria, Brazil, Canada,
Czechoslovakia, Egypt, the EC, Finland, Hong Kong, Hungary, India, Japan, Korea, Mexico, New Zealand,
Norway, Pakistan, Poland, Romania, Singapore, Spain, Sweden, Switzerland, the USA and Yugoslavia.
(b) Material injury13 is caused,
(c) Material injury has been caused through dumping or the causal link between
dumping and material injury has to be found out.
2) A further guarantee for the principle that anti-dumping duties are not applied as a
protectionist measure and their purpose is curative rather than punishment is found in
the provisions which limit the extent of its application:
(a) As to amount- Anti-dumping duties can be imposed only to prevent offset
dumping and it should not exceed the margin of dumping.14
(b) As to period—The limitation regarding period is dealt in Article 11 of the present
ADA which provides that:
1. Anti-dumping duty shall remain in force only as long as and to the extent as to the
counteract dumping which is causing injury.
2. There shall be review of the need for continued imposition of duty by the authorities
themselves or on request by the interested parties.15 Interested parties shall have the
right to request the authorities to examine whether the continued imposition of the
duty is necessary to offset dumping, whether the injury would be likely to continue or
recur if the duty were removed or varied or both. Anti-dumping duties should be
terminated immediately in the absence of the need for the same.
3. The third provision is called the ‘Sunset Clause’ which provides: “Notwithstanding
the provisions of paragraph 1 and 2, any definitive anti-dumping duty shall be
terminated on a date not later than five years from its imposition (or from the date of
the most recent review under Paragraph 2 if that review has covered both dumping
and injury under this paragraph), unless the authorities determine, in a review initiated
before that date on their own initiative or upon duly substantiated request made by or
on behalf of the domestic industry within a reasonable period of time prior to that date
13 Material injury is not defined in the Agreement but has come to mean as an injury which is not insignificant
14 Clause 2 of Article VI says, “In order to prevent or offset dumping a contracting party may levy on any
dumped product an anti-dumping duty not greater in amount than the margin of dumping in respect of such
15 The latter requires that a reasonable time has lapsed before such a request is made.
that the expiry of the duty would be likely to lead to continuance or recurrence of
dumping and injury”.
A clarification is given in footnote 22 for the regimes which impose retrospective duty. It
says, “When the amount of anti-dumping duty is assessed on the retrospective basis, a finding
in the most recent assessment proceeding under sub-paragraph 3.1 of Article 9 that no duty is
to be levied shall not by itself require the authorities to terminate the definitive duty”.16
I) PROVISION FOR REVIEW AND REVOCATION BEFORE THE URUGUAY ROUND
The provision review and revocation of AD duties has been gradually developed since the
1967 Code. Article 9 of the 1967 Code said:
a) An AD duty shall remain in force only as long as it is necessary in order to counteract
dumping which is causing injury.
b) The authorities concerned shall review the need for the continued imposition of the
duty, where warranted, on their own initiative or if interested suppliers or importers of
the product so request and submit information substantiating the need for review.
Changes Brought by the 1979 Code
(i) Article 9.1 added the words “and to the extent necessary” which made the provision
for review applicable also as to the amount of Anti-dumping duties.
(ii) Article 9.2 substituted the words “any interested party” in place of “suppliers or
importers of products”, as used in the 1967 Code.
Case under the 1979 Code
Article 9 of the Code was invoked in the case of United States- Imposition of Anti-Dumping
Duties on Imports of Fresh Chilled Atlantic Salmon From Norway17. Norway claimed that the
continued imposition of the anti-dumping duty order was inconsistent with the provision in
Article 9.1 that “an anti-dumping duty shall remain in force only as long as, and to the extent
necessary to counteract dumping which is causing injury”. According to Norway, the United
States was under an obligation to terminate the AD duties on imports of Atlantic salmon from
16 Paragraph 3.1 of Article 9, ADA provides that- “When the amount of the anti dumping duty is assessed on a
retrospective basis, the determination of the final liability for payment of anti dumping duties shall take place as
soon as possible, normally within 12 months, and in no case more than 18 months, after the date on which a
request for a final assessment of the amount of the anti dumping duty has been made. Any refund shall be made
promptly and normally in not more than 90 days following the determination of final liability made pursuant to
this sub paragraph. In any case, where a refund is not made within 90 days, the authorities shall provide an
explanation if so requested.
17 ADP/87, Report of the Panel adopted by the Committee on Anti-Dumping Practices on 27 April, 1994.