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1. Definitional/conceptual issues What is the legal definition of dumping? What is the business logic of “dumping”? (if any). 2. Functional issues How are AD regulations administered in reality? (criteria, etc…) How much politics is there?. Key issues & Learning objectives.

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Key issues learning objectives

  • 2. Functional issues

  • How are AD regulations administered in reality? (criteria, etc…)

  • How much politics is there?

Key issues & Learning objectives


Ad investigations sorted by complaining country continued
AD investigations sorted by complaining country (continued)

Source : Journal of World Trade, 32(5), 5-71,1998; Rowe & Mauw, Global Trade Protection Report 1999.


Investigations complainants vs defendants
Investigations - complainants vs. defendants

Reporting (complaining) countries

Affected countries

Source : Journal of World Trade, 32(5), 5-71,1998


Investigations by sector
Investigations by sector

Source : Journal of World Trade, 32(5), 5-71,1998


Key issues learning objectives

5

UK

Ger

Nth

Sw + Dk

8

Ir

Fl

Aust.

Lux

Sp

It

Bel

Gr

Pt

Fr

EU member states positions on AD cases, 1991-2003

Source: Adapted from Evenett Vermulst 2004


Key issues learning objectives

La propagande…

… et la réalité


Key issues learning objectives

According to the GATT antidumping code’s Article VI:1, dumping is said to have occurred if:

“[…] if the export price of the product exported from one country to another

a) is less than the comparable price, in the ordinary course of trade, for the like product when destined for consumption in the exporting country, or,

b) in the absence of such a domestic price, is less than either

1. the highest comparable price for the like product for export to any third country in the ordinary course of trade, or

2. the cost of production of the product in the country of origin plus a reasonable addition for selling costs and profit.”


Key issues learning objectives

C dumping is said to have occurred if: OUNTRY 1

Firm A

Firm B

Firm C

Firm D

COUNTRY 2

COUNTRY 3

  • Alternative (sufficient) definitions of dumping on country 2’s market:

  • price AC < price AB

  • price AC < price AD

  • price AC < average cost


Key issues learning objectives

Dumping margin calculations: old method dumping is said to have occurred if:

Exporter’s domestic market

(Turkey)

Exporter’s foreign market

(EU)

Prices

Transaction 1 120

Transaction 2 95

Transaction 3 85

__________________

Normal value 100

Prices

Transaction 1 120

Transaction 2 95

Transaction 3 85

______________________________


Key issues learning objectives

Exporter’s domestic market dumping is said to have occurred if:

(Turkey)

Exporter’s foreign market

(EU)

Prices

Transaction 1 120

Transaction 2 95

Transaction 3 85

__________________

Normal value 100

Prices Dumping

margins

Transaction 1 120 n/a

Transaction 2 95 5

Transaction 3 85 15

______________________________

Average dumping margin10

Dumping margin calculations: zeroing


Key issues learning objectives

Dumping margin calculations: new method dumping is said to have occurred if:

Exporter’s domestic market

(Turkey)

Exporter’s foreign market

(EU)

Normal

values

MFA cat . 2015 120

MFA cat . 2016 95

MFA cat . 2017 85

Average Dumping

export margins

prices

MFA cat . 2015 100 20

MFA cat . 2016 100 n/a

MFA cat . 2017 100 n/a


Key issues learning objectives

Is the slope difference dumping is said to have occurred if:

statistically significant?

Assessing “causation” from employment data

Employment data for the complaining firms

lag

Beginning of the

alleged dumping


Key issues learning objectives

Key messages (1) dumping is said to have occurred if:

  • 1. Definitional/conceptual issues

  • The correct criteria for predatory dumping are

    • a) Ex ante: dominant position, no restraint on monopoly power

    • b) Ex post: loser’s exit and exploitation of monopoly power by the winner.

  • By these criteria, there is very little predatory dumping going on (notable exceptions: transatlantic airlines cartel, Japanese semi-conductors,…)

  • “Natural” (non-predatory) pricing strategies can be actionable under current anti-dumping rules:

    • a) pricing more aggressively where you have no brand recognition

    • b) pricing more aggressively where demand is more elastic.


Key issues learning objectives

Key messages (2) dumping is said to have occurred if:

  • 2. Functional issues

  • AD regulations give considerable discretion to investigating authorities as to

    • a) Measurement of dumping

    • b) Measurement of injury

    • c) Assessment of causation

  • The degree of political involvement varies, but can be considerable.