Anti-dumpingandsubsidies.docVIP

PAGE  PAGE 10 Anti-Dumping and Subsidies Questions Antidumping / Subsidies in General a. Is the rationale (prevention of “predatory pricing”) behind the antidumping law plausible? Should the antidumping law be replaced by the anti-competition law? Why should price differentiation be penalized? b. Who would win or lose as a result of the commencement and proceeding of antidumping investigations as well as the final imposition of antidumping duties? c. Would the standard of review enshrined in Article 17.6 of the WTO Antidumping Agreement be similar with the one that is found in the Chevron doctrine in the US? d. Would the government “cost” play a decisive role in determining a subsidy together with the “benefit” that recipients enjoy?  Anti-dumping 1. Overview  HYPERLINK /english/thewto_e/whatis_e/tif_e/agrm7_e.htm /english/thewto_e/whatis_e/tif_e/agrm7_e.htm If a company exports a product at a price lower than the price it normally charges on its own home market, it is said to be dumping the product. Is this unfair competition? Opinions differ, but many governments take action against dumping in order to defend their domestic industries. The WTO agreement does not pass judgement. Its focus is on how governments can or cannot react to dumping - it disciplines anti-dumping actions, and it is often called the Anti-Dumping Agreement. (This focus only on the reaction to dumping contrasts with the approach of the Subsidies and Countervailing Measures Agreement.) The legal definitions are more precise, but broadly speaking the WTO agreement allows governments to act against dumping where there is genuine (material) injury to the competing domestic industry. In order to do that the government has to be able to show that dumping is taking place, calculate the extent of dumping (how much lower the export price is compared to the exporters home market price), and show that the dumping is causing injury. GATT (Article 6) allows countries to take action agains