May 6, 1991

SOVIETS GAIN OBSERVER STATUS IN GATT ANTI-DUMPING COMMITTEE.

GENEVA, MAY 1 (TWN) The Soviet Union has been granted "observer" status in the GATT's Anti-Dumping Committee, which oversees the functioning of the Tokyo Round agreement on Anti-Dumping and Counter-Vailing duty measures.

The Soviet Union was granted observer status in GATT in May 1990 and was given a similar status in March on GATT's Importing Licensing Committee (another Tokyo Round agreement). It is also seeking similar position on the Customs Valuation Code committee.

By gaining observer-ship in the AD Committee this week, the Soviet Union had a first-hand encounter in the committee of free trade and market as preached and as practised by its major proponents and trading nations.

Increasingly, the ICs no longer engage in simple old-fashioned protection of tariff and non-tariff visible barriers or apply non-discriminatory safeguard measures sanctioned by GATT.

They undertake "investigations" of purported subsidies (by state) or dumping of the imported goods (which itself is now identified as a trade harassment action) and then impose countervailing duties or get agreement of the exporting country to restrain exports voluntarily or of the enterprise to raise prices.

The Tokyo Round codes supposedly have much more precise rules procedures for taking such actions (than the GATT provisions) and an autonomous dispute settlement mechanism. But cases and panel rulings involving subsidies and anti-dumping complaints have now acquired a tradition of not being accepted by the party against whom the ruling goes and/or remain unimplemented.

Japan in the AD committee complained over EC moves to slap definitive "dumping" duties on audiocassettes imported from Japan.

The EC last November imposed provisional duties ranging from 14.7 to 22.3 percent.

Using some sharp language, Japan warned the EC against these moves and reserved its GATT rights. Japan warned that any decision to make duties definitive would not only affect the AD code but would also have "serious adverse effect on Japanese inward investment" in the EC (which member-States are wooing).

Japan pointed out that the EC has failed to establish a causal link between alleged dumping of imports by Japanese enterprises and the injury to the EC producers.

According to the Commission, the EC industry's share of the market had fallen from 27 percent in 1985 to 19 percent in 1988 while that of Japan, Korea and Hong Kong enterprises had increased from 72 to 81 percent.

But Japan pointed out that the share of the Japanese enterprises included the increased production of affiliates in EC.

In another case, Japan complained over the way the EC was reviewing duties imposed on electronic typewriters and the start by the U.S. of investigations into the Brother portable electric typewriters in the U.S. The EC in reviewing the duties, has asked the Japanese enterprises to provide information about their production of word processors which, Japan has argued has no relationship to the issue of continuance or otherwise of the ad duties on electric typewriters.

As for the U.S. investigations, Japan pointed out that it had been started by the U.S. Commerce Department on a complaint by Smith Corona which itself was an importer of portable electric typewriters and did not produce any.

The percentage of non-Japanese components in Brother portable typewriters and word processors produced in the U.S. was claimed by Japan to be more than 50 percent.