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ALLOCATION OF ANTI-DUMPING DUTY UNDER WTO LAWS-EXPERIENCE FROM US-OFFSET ACT
26/11/2024
The article was published in International Journal of Law, Volume 8, Issue 2, 2022, Page No. 150-156
AbstractSubsidies and dumping are considered to be unethical trade practices in international commerce. As a result, the WTO permits importing countries to take reasonable measures such as collecting taxes on dumped and subsidized goods or requiring exporters to bear costs incurred when imports caused damage or threatened to cause injury to domestic goods. The United States Continued Dumping and Subsidy Offset Act of 2000 authorized the distribution of collected dumping or subsidy duties to domestic producers who have been harmed by imported goods dumping. Numerous countries have expressed opposition to this regulation, and the World Trade Organization has reached a final decision on the subject. This article analyzes the arguments advanced by the plaintiffs, the defendant, and the World Trade Organization's adjudicating body, and makes recommendations for the most effective use of tax revenue collected by this unfair trade practice.
Keywords: dumping duties, tax revenue, unfair trade, US-Offset Act
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Introduction
A product is considered to be dumped under the provisions of Article 2.1 of the Anti-Dumping Agreement (ADA) (i.e., introduced into the commerce of another country for less than its value). if the export price of a product exported from one country to another is less than the comparable price for a similar product consumed in the exporting country on normal commercial terms. In other words, goods are considered dumped when their selling price in the market of the country of importation, in the ordinary course of business, is less than their normal price (which includes the export price, shipping costs, and a certain profit). This is an unfair trade practice that has the potential to harm international commerce. Thus, the purpose of anti-dumping duties is to compensate for the adverse trade effects of dumping and to reestablish fair trade. The WTO permits the use of anti-dumping measures as a tool for promoting fair competition. Anti-dumping is, in practice, a tool for ensuring fair trade, not a protectionist measure for domestic industry. It assists domestic industry in mitigating the harm caused by dumping (Ministry of Commerce and Industry of India, 2021) [17].
The 1994 General Agreement on Tariffs and Trade (GATT 1994) establishes a number of fundamental principles governing trade between WTO members, including the principle of "most favored nation." Article VI of the GATT of 1994 provides for the imposition of non-binding anti-dumping duties on imports from a particular source in cases where dumping has caused or threatens to cause injury to the domestic industry or has materially harmed the establishment of a domestic industry. Article VI of the GATT of 1994 establishes the anti-dumping fundamental principles. This legislation enables countries to circumvent tariff restrictions and, in violation of their non-discrimination obligations, impose a targeted tariff that offsets the effects of dumped products. While Customs levies anti-dumping duties, they are fundamentally different from import duties in terms of concept and content, as well as purpose and operation. The following points illustrate the distinction between these two "obligations": To begin, antidumping and similar measures have a conceptual connection to the concept of fair trade. While import duties are viewed as a means of increasing revenue and also serve as a shield to protect domestic goods, reasonable import taxes will create a balance between domestic and imported goods. In other words, antidumping and countervailing duties are intended to compensate for the harm caused by international price discrimination, whereas import duties affect national revenues and the overall development of the economy (Legistify, 2018) [16]. Second, import duties are a component of the government's trade and financial policies, whereas anti-dumping and anti-subsidy measures are used as trade remedies. Anti-dumping duties are not always in the nature of a tax, as the competent authority has the authority to suspend them if the exporter makes a price undertaking. As a result, such measures are not always enacted through taxes (Advocate Khoj, 2021) [6]. Thirdly, while WTO members are required to follow the principle of most favored nation treatment, anti-dumping and anti-subsidy duties are viewed as exceptions to this rule. Specifically, if WTO members export the same goods to the United States, the same import tax will apply (unless otherwise mutually agreed upon by the parties). As discussed previously, anti-dumping or anti-subsidy taxes are considered an additional import tax, not an import tax in and of themselves, and their application is intended to combat unfair trade practices. Thus, even if they export the same goods to the United States, only those countries and manufacturers deemed to be dumping will be subject to this tax, whereas the import tax will apply uniformly to all imports regardless of origin or exporter (Dinnersoz and Dogan, 2008) [12].
Between import duties and anti-dumping duties, there are fundamental functional distinctions. Anti-dumping duties on imported goods are increasingly higher than normal customs duties. While import taxes are included in the budget revenue, there are differing views on how to use anti-dumping taxes to truly compensate domestic producers for the harm caused by dumping behavior and how they can restore competitiveness while also eliminating unfair trade practices.
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