Anti-Dumping Duty

• 06 Jul 2021

Why in News

Recently, the government has decided not to impose Anti-Dumping Duty (ADD) on imports of certain copper products, from China, Thailand, Korea and three other countries.

Key Points

• About:
  
  • In April, Directorate General of Trade Remedies (DGTR) recommended imposing the duty on “copper and copper alloy flat-rolled products” from China, Korea, Malaysia, Nepal, Sri Lanka and Thailand, after conducting a probe.
  • However, the Ministry of Finance takes the final call to impose these duties and issues notification for the same.
• Anti Dumping Duty (Concept):
  
  • Dumping:
    
    • Dumping is said to occur when the goods are exported by a country to another country at a price lower than the price it normally charges in its own home market.
    • This is an unfair trade practice which can have a distortive effect on international trade.
  • Objective:
    
    • Imposition of Anti-dumping duty is a measure to rectify the situation arising out of the dumping of goods and its trade distortive effect.
      
      • In the long-term, anti-dumping duties can reduce the international competition of domestic companies producing similar goods.
    • It is a protectionist tariff that a domestic government imposes on foreign imports that it believes are priced below fair market value.
    • The use of anti-dumping measures as an instrument of fair competition is permitted by the World Trade Organisation.
  • Different from Countervailing Duties:
    
    • ADD is a customs duty on imports providing a protection against the dumping of goods at prices substantially lower than the normal value whereas Countervailing duty is a customs duty on goods that have received government subsidies in the originating or exporting country.
  • WTO's Provisions Related to Anti-Dumping Duty:
    
    • Validity: An anti-dumping duty is valid for a period of five years from the date of imposition unless revoked earlier.
    • Sunset Review: It can be extended for a further period of five years through a sunset or expiry review investigation.
      
      • A Sunset review/ expiry review is an evaluation of the need for the continued existence of a program or an agency. It allows for an assessment of the effectiveness and performance of the program or agency.
      • Such a review can be initiated suo moto or on the basis of a duly substantiated request received from or on behalf of the domestic industry.

Directorate General of Trade Remedies

• It is the apex national authority under the Ministry of Commerce and Industry for administering all trade remedial measures including anti-dumping, countervailing duties and safeguard measures.
• It provides trade defence support to the domestic industry and exporters in dealing with increasing instances of trade remedy investigations instituted against them by other countries.

Source: IE