Anti-dumping measures are the only legal and kosher tools available to countries like Pakistan to prevent irreparable injury to their industries and ensuring level playing field for their conduct of commerce, as required under the WTO agreement. This is the considered opinion of experts on anti-dumping laws as enshrined in WTO agreement.
The current global economic turmoil will naturally lead to regional manufacturers looking for avenues to dispose of their surplus goods and, they, in many cases, may resort to unfair trade practices.
The WTO has, therefore, issued comprehensive guidelines pertaining to management of "dumping", and the laws of any WTO member country, such as Pakistan, have to be in full compliance to these guidelines. This is done to ensure that any government to provide unwarranted protection for its domestic industry from any normal or "fair" competition does not abuse this instrument. Thus, the anti-dumping laws are very detailed, and any investigation pertaining to the same tends to be rather a protracted and comprehensive process.
Experts on WTO agreement are convinced that investigation of any anti-dumping application is, therefore, quite a transparent process, spanning a period of more than a year, and entails a plethora of activities whereby all stakeholders are given multiple opportunities to present their arguments.
In fact, in some cases (as is the case of Pakistan) the body conducting the investigation actually visits the foreign manufacturers in their respective countries and gives them full opportunity to plead their case. The WTO agreement on anti-dumping requires all members to inform the committee on anti-dumping practices about all preliminary and final anti-dumping actions, promptly and in detail. They are also required to report on all investigations, twice a year.
There has been speculation on a variety of factors linked to the legislation and benefits of imposing anti-dumping laws in Pakistan. At the core of the issue is a decision by the National Tariff Commission (NTC) to impose anti-dumping legislation against products and organisations, that are deemed to bring in low quality and under-priced items from abroad, as unfair competition for local manufacturers.
Experts say that while this decision has been hailed by certain quarters, in terms of 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 certain domestic industries at the expense of others. Some have even alleged that anti-dumping laws, as formulated by the NTC, do not take into account public interest and, therefore, damage domestic textile industry.
They consider this criticism of NTC as unjustified, on the ground that the ordinance clearly aims to offset injurious dumping in the larger public interest. The NTC has based its decision on proof of material injury to the domestic industry, as revealed during its investigations with all interested parties (including exporters and importers of the dumped products).
A number of parameters are assessed to gauge injury to the domestic industry, such as the magnitude of dumping, declines in sales, profits, market share, production, etc. As a government body, the NTC could not have imposed anti-dumping duty without asserting that there is any actual injury to local industry. NTCs anti-dumping investigation was a detailed, transparent, rule-driven and all-encouraging legal and fair process carried out in the national interest of the affected industry.
According to experts on anti-dumping, it is a matter of national pride that the NTC has achieved an impressive track record of conducting fair and transparent proceedings in strict conformity with the law. Its decisions are based on actual facts rather than allegations, providing stakeholders with the assurance that decisions are made autonomously and fairly. The domestic industry, most affected by dumping, is completely dependent on the proper and autonomous functioning of NTC for the enforcement of their rights. It is, therefore, in public interest that the autonomy of NTC be protected.
Anti-dumping duty is recognised globally as an instrument for ensuring fair trade, and is not a tool for protectionism. In fact, it serves as an equalisation mechanism ensuring level playing field for the concerned industry. It would, therefore, be in the national interest if NTC were allowed to continue functioning, they said.
Dumping is the act of selling a product in a foreign market at a lower price as compared to the home market of the exporting country. This is referred to as selling at less than "fair value," and is an act condemned under the WTO agreement, if it causes material injury to a domestic industry in the importing country.
Dumping is often mistaken to mean cheap or low priced imports. However, in the legal sense, dumping implies low priced imports only relative to the normal value in the home of the exporting country. Anti-dumping duties are an equalisation mechanism to bridge the gap between dumped prices and normal value. Such goods are not banned from entry into Pakistan, or make them more expensive than prevailing regional prices. This duty does however serve to equalise prices, as sold within exporting countries and the region, providing a level playing field to all. Such measures ensure that there are no restrictions on import, and allow equal opportunity.
Anti-dumping measures are instruments for fair trade rather than aimed at protecting local industry. Anti-dumping laws should not be confused with normal import tariff or custom duties as the intent and impact of the two is quite distinct, they said.
Normal custom duties intend to: safeguard domestic employment, protect infant industries, ensure national security and reciprocity, generate revenue for the government, discourage use of certain products, manage trade balance, national strategic sensitivities, and ensure level playing field.
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