Rough Draft of International Trade Law

Topic : Antidumping and Competition law: Indian Perspective

Submitted By: Shikher Goel (117) Submitted to :

Seema Siddiqui

INTRODUCTION
Dumping, is a pricing practice where a firm charges a lower price for exporting goods
than it does for the same goods sold domestically. It is said to be the most common form
of price discrimination in international trade. Dumping can only occur at places where
imperfect competition and where the markets are segmented in a way such that domestic
residents cannot easily purchase goods intended for export. It is a subtle measure of
protection which comes under the non-tariff barriers and is product and source specific.
Antidumping duties were initiated with the intention of nullifying the effect of the market
distortions created due to unfair trade practices adopted by aggressive exports. They are
meant to be remedial and not punitive in nature. A harmful to the domestic producers as
their products are unable to compete with the artificially low prices imposed by the
imported goods. As a method of protection to the domestic industries, anti dumping
duties are thus levied on the exporting country which has been accused of dumping goods
in another country.

MeaningofDumping

1.TheConciseOxfordDictionarydefinesthetermdumpingastosell(excessgoods)
toaforeign marketatalowprice
2. Haberler1defineddumpingasthesaleofgoodsabroadatapricewhichislowerthan
thesellingpriceofthesamegoodsatthesametimeinthesamecircumstancesathome,
takingaccount,ofdifferencesintransportcosts.

3. Dumpingofgoodsinthemostcommoneconomicsensemeanstosendgoodsunsalable
atahighpriceinthehomemarkettoaforeignmarketforsaleatalowprice,tokeepup
thepriceathomeandtocaptureanewmarket.2

MeaningofAntiDumping

Movingonastowhatisantidumping,itcanbefinedasaprotectivedeviceavailableto
thestatesagainstvicissitudesassociatedwiththefreetrade.Intherecentyearsalarge
numbercountrieshavebecomefrequentusersofantidumping.Manyoftheheaviest
antidumping users are countries who did not even have an anti dumping statute a
decadeago.3 Thetraditionaluserscontinuetomakeuseofthesemeasureswithmore
vigourbytargetingnewusers.AntiDumpingdutieswereintroducedbythedeveloped
countriestoprotecttheirindustriesagainstthelowpricedimports.Developingcountries
supportedtheinclusionoftheprovisionrelatingtoantidumpingdutiesunderGATT
becausetheywantedtolevyofantidumpingdutiestobeunderinternationalregulation
Antidumpingmeasuresarenotonlylegalbuttheyarealsoflexibleinusage.Further,
antidumpingdutiescanbepresentednotasprotectionbutasencounteragainstunfair
competition.

Anti-Dumping Law with specific reference to WTO and Anti-

Dumping Agreement
1 2Haberler, Gottifried Von, The Theory of International Trade with its Application to Commercial Policy. Translated by
Alfred Stonier and Frederic Benham. P. 300, New York: Macmillan, 1937.

2 R.K Gupta, , Safeguards,Countervailing and Anti-Dumping Measures Against Imports and Exports-
Commentary, Cases and Text, Academy of Business Studies, New Delhi, 1998

3 T.P Bhat, Globalisation of Anti-Dumping and its Impact, Foreign Trade Review, 2003, Vol.38,
Introductory

GATT/WTOwasestablishedwiththeobjectiveofpromotingfreetrade.Barrierstofree
trademaybetariffbarrierornontariffbarrier.Tariffregimesareeasytoadministerand
simpletounderstand.Nontariffmeasuresinvolveintricateissuesandaregovernedby
variousWTOagreements.Antidumpingisoneofthemostfrequentlyusednontariff
measure.WTOrulesallowthemembercountriestooptforantidumpingmeasureswith
specificstipulation.ArticleVIoftheGATT,1994 4 dealsaboutantidumping.Further
thereisalsoAgreementtogiveeffecttoArticleVIwhichcontainsprovisionswhichmust
bestrictlyfollowedwhenconductingantidumpinginvestigation.Ifacountrytodayhas
antidumpinglegislations,itmustbeconsistentwiththeagreement.Thepracticesand
proceduresinactualinvestigationmustconformtotheagreement.Todaylargenumbers
ofcountrieshavebecomefrequentusersofantidumpingmeasures.Antidumpinghas
uniquecombinationofpoliticalandeconomicmanipulability.Duringthelastfourteen
years of WTO, the use of antidumping has become rampant that it is criticized as
threateningtolimitthemarketaccessachievedunderGATT/WTOtradenegotiations
overthelastfiftyyearsorso.Ontheonehandthereisfearthatantidumpingmeasures
areusedforprotectionistpurpose.Ontheotherhand,manysupportitbecauseitcanbe
usedasencounteragainstunfairtradepractices.

HistoricalBackground

Antidumpingrulesstartedtodevelopintheearlypartofthiscenturywiththeadoption
oflegislationsfirstlybyCanadain1904,NewZealandin1905,Australiain1906and
UnitedStatesin1916,whichwerelatersubjectedtoquiteafewamendments.In1921the
UnitedKingdomalsoenacteditsfirstantidumpinglegislation.Notwithstandingthese
developmentsantidumpingremainedarelativelyinfrequentinstrumentuntilwellafter
4 The contracting parties recognize 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 an established industry in the territory of a contracting party or
materially retards the establishment of a domestic industry.
theadventoftheGATT,despitethefactthatArticleVIofthe1947GATTprovidedthe
basicconditionsforadoptingantidumpingmeasures.Intheimmediatepostwarperiod
onlySouthAfrica,CanadaandAustraliaweretheonlycountriesusingantidumpingas
an important trade instrument. During the Kennedy Round of trade negotiations,
discussionstookplaceforthe,firsttimeonArticleVIoftheGATTinordertosecure
more standardized approach to antidumping. This in turn led to the Agreement on
ImplementationofArticleVIoftheGATTwhich,inturnformedthebasisforthefirst
EuropeanCommunityantidumpinglegislationadoptedin1968.Subsequenttraderounds
havemorepreciselydealtwiththerulesandproceduresthatWTOmembersareexpected
toadheretoinimplementingtheirantidumpinglegislationsalthoughevennowtheWTO
membersareallowedcertainleewayintheirbehaviour.
Anti-Dumping in India: Institutional Arrangement &
Existing Administrative Mechanism

LegalframeworkofantidumpinginIndia

1. TheprincipleofimpositionofantidumpingdutieswaspropoundedbytheArticle
VIofGeneralAgreementonTariffs&Trade(GATT)1994UruguayRound

2. IndianlegislationinthisregardiscontainedinSection9Aand9B(asamendedin
1995)oftheCustomsTariffAct,1975

3. Further regulations are contained in the AntiDumping Rules [Customs Tariff

(Identification, Assessment and Collection of AntiDumping Duty on Dumped
ArticlesandforDeterminationofInjury)Rules,1995]

4. The Designated Authority for conducting investigations pertaining to Anti

Dumping issues and on basis thereof, for forwarding its recommendations is the
MinistryofCommerce,GovernmentofIndia.

5. The responsibility for Imposition and Collection of duties as imposed

/recommendedbytheAdjudicatingauthorityisimposedupontheMinistryofFinance,
GovernmentofIndia.

Section9AoftheCustomsTariffAct,1975(hereinafterreferredtoastheAct)as
amendedin1995andtheCustomsTariff(Identification,AssessmentandCollectionof
AntidumpingDutyonDumpedArticlesandforDeterminationofInjury)Rules,1995
(hereinafterreferredtoastheRules)framedthereunderformthelegalbasisforanti
dumpinginvestigationsandforthelevyofantidumpingduties.Theseareinconsonance
withtheWTOAgreementonantidumpingmeasures.Theserulesformthelegislative
frameworkforallmattersrelatingtodumpingofproducts,whichincludethesubstantive
rules,rulesrelatingtopractice,procedure,regulatorymechanismandadministration.

Interface between Anti-Dumping Law and Competition Law

Competition Act, 2002 (India): Brief Introduction

ThePreambleoftheCompetitionAct,2002providesthat:
AnActtoprovide,keepinginviewoftheeconomicdevelopmentofthecountry,forthe
establishment of a Commission to prevent practices having adverse effect on
competition,topromoteandsustaincompetitioninmarkets,toprotecttheinterestsof
consumersandtoensurefreedomoftradecarriedonbyotherparticipantsinmarkets,in
India,andformattersconnectedtherewithorincidentalthereto.

The Actprovides a very wide mandate for the Competition Commission of India to
enforce. Apartfromitratherbroadobjective,theActcontainsprovisionswhichhave
ratherbecomestandardinthecompetitionjurisdictionsallacrosstheglobe.Thesearethe
provisions relating to anticompetitive agreements, abuse of dominant position and
regulationofcombinations.Intherespectofantidumpinglawtheprovisionsrelatingto
abuse of dominant position and anticompetitive agreements assume importance. In
respectofdominantpositionitispertinenttonotethatwhereasdominanceisnotfrowned
uponbytheCompetitionAct,2002abuseofdominanceiscertainlyfrowneduponbythe
legislation.AnothersignificantfeatureinthecontextoftheseprovisionsoftheActisthat
anticompetitiveagreementsandabuseofdominancearetobeprohibitedbytheordersof
the Commission whereas the mergers are to be regulated by the orders of the e of
Commission.Thisdifferenceinlawisofimmensesignificance.Whereastheformertwo
preventenhancementofconsumerwelfarethelatterdriveseconomicgrowth.Hence,the
distinctionhasbeenmaintained.

Section 4 of Competition Act

Inrespectofabuseofdominantposition,Section4(2)enliststhecircumstanceswhenan
enterpriseshallbeconsideredtobeabusingitsdominantposition.Itstates:
(2)Thereshallbeanabuseofdominantpositionundersubsection(1),ifanenterprise,
(a)Directlyorindirectly,imposesunfairordiscriminatory
(i)Conditioninpurchaseorsaleofgoodsorservice;or
(ii)Priceinpurchaseorsale(includingpredatoryprice)ofgoodsorservice;or
(b)Limitsorrestricts
(i)Productionofgoodsorprovisionofservicesormarkettherefor;or
(ii)Technicalorscientificdevelopmentrelatingtogoodsorservicestotheprejudiceof
consumers;or
(c)Indulgesinpracticeorpracticesresultingindenialofmarketaccess;or
(d) Makes conclusion of contracts subject to acceptance by other parties of
supplementaryobligationswhich,bytheirnatureoraccordingtocommercialusage,have
noconnectionwiththesubjectofsuchcontracts;or
(e) Uses its dominantposition in one relevantmarketto enterinto, or protect, other
relevantmarket.

Bibliography
WEBSITES REFFERED
 www.manupatra.com
www.jstor.org
www.indialaw.com
www.legalservices.com
www.cci.gov.in