7:04 AM Apr 28, 1993


Geneva Apr 27 (Chakravarthi Raghavan) -- Some 12 trade disputes relating to recourse by importing countries to anti-dumping and countervailing (ad/cv) measures figuring in the two-day meeting of the Tokyo Round Committee on anti-dumping practices has testified to the increasing use of ad/cv measures as a trade policy instrument, with developing countries following the example set by the developed.

Besides the specific disputes -- ranging from requests for consultations through conciliation adjudication and recommendations of panels -- also before the committee were two semi-annual reports.

The reports, as well as the various disputes, brought out that anti-dumping measures -- complaints, investigations, levy of provisional duties, final determinations, voluntary price undertakings and reviews for continuing the duties -- have now become the major preferred source of protectionist actions in countries and one giving rise to bilateral disputes.

While most of the actions are by industrialized countries against each other, there has also been increasing number of actions against imports from developing countries and, perhaps reflecting the fact of their unilateral trade liberalization, autonomously or under IMF/World Bank structural adjustment conditionalities, resort by developing countries to these instruments.

While the use of the instrument by developing countries is still mostly against each other, "it is also a case of testing the waters, one Third World diplomat said. Being a new instrument for them, trade policy administrators and the domestic industries were in a 'learning curve', but in due course will use it against the industrial world too if they can get away with it.

With the ability of countries to target individual importing sources and countries or groups of them, the industrialized countries led by United States, European Community and Australia have long been having recourse to this, rather than the GATT 'safeguard' provisions for emergency actions against imports.

Dumping, according to its normal meaning, refers to cases where goods are exported at prices lower than costs of production and sale in the domestic market. In pure economics, dumping benefits the consumers atleast in the short to medium-term. It is frowned upon where it is used as a predatory instrument by a powerful enterprise to drive out competition and then create a monopoly or a dominant position.

GATT enables countries to deal with 'dumped' goods exported to them which seriously prejudice or affect producers of similar or equivalent goods, with the GATT provisions refined by the Tokyo Round code in regard to how the 'dumping margin' is to be calculated, the procedures to be followed etc.

For long, almost since the conclusion of the Tokyo Round and the consequent lowering of mutual tariffs, particularly among the industrialized countries, the US, EC and Australia have been making use of the AD measures against competitive imports from each other, and from developing countries which are not otherwise restricted by GATT authorized discriminatory quotas like those under the MFA or when they become competitive despite the MFA.

According to a GATT secretariat report covering the period 1 July 1991 to 30 June 1992, the number of ad investigations by the parties to the Tokyo Round code rose significantly to 235 in that period from 175 in the corresponding period a year earlier.

Of the eleven parties who notified the GATT under the code of their actions, Australia led the pack with 76 cases, United States with 62, Mexico with 25, the European Community 23, Canada 16, New Zealand 13, Brazil nine, India five, Austria four, Japan three and Sweden one. Australia's was the largest increase from 46 to 76 while India and Japan took action for the first time or atleast notified for the first time.

The report also showed that while complete data for outstanding final actions -- levy of antidumping duties or price undertakings -- were not available for all signatories, for those notifying, the outstanding final actions increased from 20 to 44 for Australia, from 209 to 236 for United States and from 143 to 157 for the European Community.

When investigations or launched, whether or not provisional duties are imposed pending final determination, the very act of opening investigations creates considerable uncertainty to the trade -- both for the importing traders who at some future point might be forced to pay up increased duties and for exporters.

For the period July-December 1992, in accordance with practice, only individual country reports were there, with some of them either not fully in the accepted format or with some incomplete information

In the case of the United States, the use of socalled 'best information available' -- an euphemism for accepting the figures supplied by its domestic enterprise-complainants and ignoring or disbelieving data supplied by the exporting enterprises in countries -- is now as regular a recourse as the antidumping action and/or investigation itself.