Operationalising SNDT provisions is vital

Updated: Nov 17 2005, 05:30am hrs
Enforceable SNDT (special and differential treatment for developing countries) will significantly reduce the anti-dumping cases against developing countries and in turn by developing countries. According to a paper, titled Anti- dumping: The case for SNDT, the current law makes the developing countries particularly vulnerable to anti-dumping actions. This is because home market prices for domestically manufac tured products in developing countries are in most cases higher than those in their export markets largely due to inefficient cost structure. These include, high cost of capital, labour market conditions, labour laws, poor infrastructural facilities and bad governance. The paper suggests that the best policy option for developing countries is to focus on operationalising SNDT provisions.

The secretariat identifies two types of SNDT provisions in the WTO agreements, i.e. exceptions to rule to which developing countries may take recourse to and conduct or actions to be undertaken by developed country members for developing country members. The paper suggests that there are negotiations on both types of provisions.

Regarding exceptions to rule to which developing countries may take recourse to, the paper suggests that the thresholds for executing negligible imports should be based on market share rather than share of total imports. Also, a sentence should could be added to article 5.8 of the WTO agreement stating that no collective account will be made of dumped imports from developing country members holding less than 3% of importing members consumption. This would mean that the countries with less than 3% of market share will automatically be excluded from the purview of AD investigations.

The paper also suggests that developed countries should inform the developing country involved of the facts of violation of anti-dumping laws and request them not to continue their violation prior to the initiation of the investigations.

If there is no agreement reached by two sides within a fixed period, the complaining country may set out investigation.

Anti-dumping practices of developed countries add to the vulnerability of developing countries to anti-dumping actions.

There are several ambiguities and discretion which introduce the scope of political and other non- economic factors in the initiations and decisions. It is known that anti-dumping activities of a country against trading partners depend on their retaliatory capacity. Since the share of developing countries is very small, they are not likely to get any favours in anti-dumping proceedings. Thus, the ambiguities in the practices may be more damaging for the developing countries.

Due to high agent fee, and huge data requirement, firms choose not to respond, which increases the probability of dumping findings.

According to the Chinese Ministry of Foreign Trade and Economic Co-operation, Chinas response rate to anti-dumping lawsuits has risen to 60-70% of the total number in the recent years.

Based on a paper by Aradhna Aggarwal