ANTI-DUMPING Ñ POSITIVE WINDS OF CHANGE
Iqra Institute of Fashion Design
June 18 - 24, 2007
There appears to be substantial debate on the subject of dumping these days, especially given the latest development where the National Tariff Commission (NTC) of Pakistan has imposed an anti-dumping duty on Polyester Staple Fibre (PSF) manufacturers from Korea, Thailand and Indonesia. Whereas this step by the NTC is being hailed by certain quarters that appreciate the level of professionalism demonstrated by the Government body, there are others who are condemning it for being an unfair practice with the sole purpose of protecting the domestic industry.
In order to form a pertinent opinion, one must grasp the meaning and implications of the concept of dumping, and gain a deeper understanding of the process and parameters pertaining to the subject. Dumping is said to occur when goods are exported at a price lower than its normal value. Normal value is the comparable price at which the goods under complaint are sold, in the ordinary course of trade, in the domestic market of the exporting country. It can also be the estimated cost of production in the country of origin with a reasonable allowance for profit margins. Often, dumping is mistaken and simplified to mean cheap or low priced imports, however in the legal sense dumping implies low priced imports only in the relative sense (relative to the normal value), and not in absolute terms.
The parameters by which injury to the domestic industry is to be assessed in the anti dumping proceedings are such economic indicators having a bearing upon the state of industry as the magnitude of dumping, and the decline in sales, selling price, profits, market share, production, utilisation of capacity etc. It is imperative to prove that the dumping has caused injury to the domestic industry. No anti dumping duty shall be recommended without a finding of this causal relationship.
Anti dumping is an instrument for ensuring fair trade and is not a measure of protection per se for the domestic industry. It only seeks to provide a level playing field to the domestic industry. The National Tariff Commission of Pakistan has carried out a year long investigation as per the Anti-Dumping Ordinance, 2000. The Ordinance was promulgated in complete conformance to the guidelines of the WTO. The NTC is supposed to operate independently and follow the law in letter and spirit and not be influenced by other Government Ministries and or stake holders.
Their investigation in the case of PSF also entailed visits to the manufacturers against whom the complaint had been filed. These manufacturers were given adequate opportunity to defend themselves which they were obviously unable to do successfully. A resultant duty was imposed on a supplier wise basis, the quantum of which was equivalent to the dumping margins. However, product can still be imported from these suppliers, though the anti-dumping duty will ensure that these suppliers will be unable to take unfair advantage.
Instead of criticizing the NTC, the businessmen of Pakistan should take comfort from the fact that an institution such as this exists which operates in a fair and transparent manner and is their shield against rogue regional/global manufacturers who don't believe in playing fair. In fact the textile chain which is being battered by fabric, garments and sewing threads etc. being dumped into Pakistan by neighbouring countries at uneconomical prices should take heed and file anti-dumping applications against the parties guilty of such acts. They will find a highly professional team at the NTC that will follow the correct and legal process to ascertain the facts, carry out a detailed investigation and determine the guilt or innocence of the parties accused of dumping. The textile chain will be well advised to go down this path and ensure that they have an even playing field and are not subjected to unfair competition.