What is anti dumping?

Anti-dumping duty is a measure implemented by governments to protect local industries and manufacturers. This is a form of protectionism against exporters in foreign countries who have priced their export products at prices much lower than what they actually charge in their local markets (of the exporter). In some cases, anti-dumping duties can also be enacted against exporters who price their products much lower than manufacturers in the importing country. In order to prevent pricing pressures to form on local industries from this foreign supply, high duties can be imposed on such imports. As with most import licensing requirements and determination of duties, levies or tariffs on imports, the HS code of a product is one factor that will be taken into consideration whether anti-dumping duties need to be levied or not. Anti-dumping duties are imposed by Customs authorities.

In most countries, companies or trade unions can raise complaints to the relevant authorities in order to seek redress against perceived dumping activities. After appropriate investigations, countries may start to import anti-dumping duties.

What does the WTO say about Anti-dumping?

The Word Trade Organization (WTO) does not administrate or impose any regulations concerning exporters who practice dumping. On the other hand, the WTO’s position is that countries have a right to take action to address dumping activities, whenever there is an actual impact to local markets. The WTO’s focus is on ensuring unnecessary anti-dumping duties are not levied.

The WTO treats dumping as a form of price discrimination. the General Agreement on Tariffs and Trade (GATT) deals with the topic of dumping to some extent.

What is the difference between anti-dumping and countervailing duties?

Countervailing duties are also Customs duties. However, although they may appear to be similar in nature to anti-dumping duties they are in fact fundamentally different. Countervailing duties are imposed on imports coming from countries that have governments who provide subsidies to exporters. the HS classification number or tariff code of the product must also be taken into consideration when importers determine whether countervailing duties will apply.

It is possible for a product to attract both countervailing duties and anti-dumping duties.

A final word

Importers have to be wary of dealing with foreign suppliers who have remarkably suspicious pricing advantage, especially on product lines that are part of developing or developed industries in their home countries. This is because in many countries, under specific conditions, anti-dumping and countervailing duties can be applied retroactively.

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