Make ‘lesser duty rule’ must for anti-dumping, India tells WTO

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New Delhi, Feb 20: India has asked for tightening of anti-dumping rules by the World Trade Organisation to prevent its misuse.

Apprehensive that the dismantling of quantitative restrictions in textiles by the EU and the US and a general lowering of tariff barriers by member countries may lead to a rise in wrongful imposition of anti-dumping duties, India has proposed a mandatory application of ‘lesser duty rule’ for determination of dumping and a strict criteria for calculating injury margins for domestic industry.

In a recent submission to WTO, India suggested that Article 9.1 of the Anti-Dumping Agreement should be amended to provide for mandatory application of the ‘lesser duty rule’ which states that the anti-dumping duty shall not exceed the margin of dumping by the exporter or the injury margin to the domestic industry, whichever is lower.

The submission claimed that a large number of economists and trade analysts were of the opinion that the non-applicability of ‘lesser duty rule’ tends to protect the injured domestic industry of the importing member more than what is adequate.

India proposed two broad options for determining injury margin. Under the first option, injury margin would be the difference between the price of the like product produced by the domestic industry and the price of the dumped imports.

Under the second option, injury margin would be the difference between the target price for the domestic industry and the price of the dumped imports.

India proposed four options for determining the target price. It could be the price of the domestically produced like product prior to being affected by dumping. Alternatively, it could be the price of the product concerned, when exported by those exporters or producers who are found not to have dumped the product concerned during the investigation period.

It could also be the price of the like product, when exported during the investigation period from appropriate third countries or it could simply be based on the cost of production method.

Depending on the option used, the target price is proposed to be determined for the period of investigation or a period that is comparable to the period of investigation.

The submission added that the existence of injury margins should be established on the basis of a comparison on a weighted average basis of all comparable transactions or by a comparison on a transaction-to-transaction basis. The authorities should also ensure that all negative values are taken into account, it said.