Highlighting the major weaknesses of the WTO anti-dumping agreement which cause international market distortion

Abstract

Article VI of the General Agreement on Tariffs and Trade (hereinafter "GATT") and the World Trade Organization (hereinafter "WTO") Anti-dumping Agreement (hereinafter "ADA") permit WTO members to impose anti-dumping duties as a result of an anti-dumping investigation if any member concludes that a certain product, imported to its territory, has caused or threatens to cause a serious injury to its domestic industry. Accordingly, this member may increase tariffs on this imported product by a specific amount calculated through certain methodologies for each foreign exporter/producer whose imports are subject to the concluded investigation. However, Article VI of GATT and the ADA do not condemn dumping as price discrimination but condemn the product dumping situations causing or threatening to cause material injury to the domestic industry. Consequently, the dumping practice itself is not the only reason for allowing any party to impose anti-dumping duties. The most important factor in the anti-dumping investigation process is to provide clear analysis that dumped imports have indeed caused or threaten to cause serious injury to the domestic industry. Unfortunately, the ADA does not provide members with clear provisions on how to reach this conclusion. In addition, and according to Article 11.1 of the ADA, the imposition of “anti-dumping duty shall remain in force only as long as and to the extent necessary to counter dumping which is causing injury.” The ADA provisions also do not provide clear and objective analysis guidelines to determine whether a member should eliminate anti-dumping duties. The weaknesses of this Agreement, which exist in significant and crucial provisions, such as those relating to injury and causality determinations, or the review of the anti-dumping duties with respect to their level and duration, encourage WTO members to abuse these rules by overprotecting their domestic industries. The extensive use of this tool destroys the main purpose of this Agreement, to stop or hinder injury that is caused by dumped imports. These weaknesses, which undermine the objectivity of the anti-dumping investigations, distort international trade by imposing various anti-dumping duties on numerous foreign products, which are not necessarily causing or threatening to cause material injury.