Search the Internet          Tips  Sites: Finance, Investment

India takes over from US as top anti-dumper

India has taken over from the United States as the most active user in the World Trade Organisation of anti-dumping actions against foreign imports, according to figures released on Monday.

The figures, issued by the WTO, showed both countries well ahead of the third placed Argentina and the European Union, in fourth place, in applying the often-controversial measures against goods deemed to be priced at below production cost.

According to the WTO, whose statistics were based on the second half of last year, China was easily the main target of anti-dumpings actions -- which normally lead to the imposition of extra tariffs on products deemed to be dumped.

India launched 51 investigations from July to December last year, 30 more than it had during the same period in 2000. Of these, 20 led to mandated duty increases on the targeted goods.

The United States, for long the champion of anti-dumping actions and criticised by other WTO members on the issue, launched 35 in the second half of last year against 38 from July to December 2000.

Argentina launched 16 actions and the EU 15.

A total of 25 actions were started against Chinese goods. Brazil, Taiwan, Thailand and the United States were next, facing nine such actions each.

WTO rules allow the body's currently 144 member countries to impose anti-dumping tariffs -- and so break normal free trading regulations -- after they have carried out detailed investigations on whether dumping is taking place.

These investigations look into whether the export price of a targeted product is lower than that at which it is sold in its domestic market.

IMPORTS INHIBITED

Although not all investigations lead to extra tariffs, trade analysts say the launch of an action usually immediately inhibits imports of the targeted item because importers have to post bonds against eventual additional duties.

Traditionally, genuine dumping is used when exporters want to break into a new foreign market and undercut local producers, sometimes with the hope of driving them out of business.

In this scenario, the foreign producer can then raise his prices to make a profit -- and even a super-profit if he has managed to carve out a monopoly niche in the importing country.

Under WTO rules, investigations by national authorities into alleged dumping have to show that it is actually causing injury to domestic producers -- either of manufactured items or agricultural goods.

But the anti-dumping actions can be challenged through the WTO's dispute settlement system and if found unjustified by independent panels the country that has applied them is asked by its fellow WTO members to withdraw them.

Several anti-dumping actions by the United States, as well as some other WTO members, have been found unjustified, and developing countries have often accused Washington of abusing them to keep out goods competing with domestic products.

At last November's WTO ministerial conference in Qatar, US negotiators agreed under heavy pressure to include a review of anti-dumping rules in a new round of global trade liberalisation talks now under way.

The WTO said the United States still headed the league of countries actually imposing duties after investigations, taking such action 21 times during the last six months of last year -- a sharp rise from eight in the same period of 2000.

ALSO READ:
The Rediff Budget Special
Money

Tell us what you think of this report