What Is Dumping?

• Dumping is essentially the sale of a product to a foreign country for less

than it is sold in the country of production

• Dumping is a form of international price discrimination

– The ability to dump products gives foreign producers an unfair

advantage over domestic producers in the importing country

• The importing country can impose an antidumping duty to offset the unfair
advantage if the responsible government authority finds

– that dumping has occurred, and

– that the dumped imports have injured or threaten to injure a

domestic industry

Definition of “Dumping”

• Dumping is the introduction of the products of one country into the

commerce of another country at less than their normal value –

• Dumping occurs “if the export price of the product exported from one
country to another is less than the comparable price, in the ordinary course
of trade, for the like product when destined for consumption in the
exporting country” – Antidumping Agreement Art. 2.2

– Dumping applies only to goods, not services

Cost of Production

• If there were no sales in the country of production, or if sales were below

the producer’s cost of production, normal value is equal to cost of
production plus general, selling, and administrative (“GS&A) expenses plus
profit

– If possible, GS&A expenses and profit should be based on the

producers’ actual experience
 • To use cost of production, the sales must have been

– In substantial quantities

– Over an extended period of time

– At prices that did not allow the recovery of costs within a reasonable
period of time

Calculation of Dumping Margins

• Comparing export price and normal value yields the dumping margin

• The dumping margin is equal to normal value minus export price, divided
by the export price

• If the export price of a ton of copper is $5000, and the normal value is
$6000, the dumping margin is 20% ($1000/$5000)

Dumping Calculations

• Dumping margins can be calculated by

– comparing a weighted average normal value with a weighted average

of prices of all comparable export transactions, or

– comparing normal value and export prices on a

transaction-to-transaction basis

• In calculating dumping margins, all comparisons must be used

– The calculation cannot ignore transactions with a negative dumping

margin (“zeroing”)

Targeted Dumping

• A normal value established on a weighted average basis may be compared

to prices of individual export transactions if the authorities
 – find a pattern of export prices which differ significantly among
different purchasers, regions or time periods, and

– if the authorities explain why such differences cannot be taken into

account appropriately by the use of a weighted average-to-weighted
average or transaction-to-transaction comparison

• This exception allows countries to identify and offset instances of targeted

dumping

Antidumping Duty

• If it finds dumping and injury, the importing country can impose an

antidumping duty equal to the dumping margin

– The authority must publish its final determination, with its reasons
and conclusions

– A separate duty must be calculated for each supplier

• The importing country can impose a duty less than the margin of dumping if
it will remedy the injury caused

– Not all countries (such as the United States) allow this “lesser duty”

• The antidumping duty cannot exceed the dumping margin

• No antidumping duty can be imposed if the dumping margin is less than 2

percent (“de minimis”)