MULTINATIONAL MANAGEMENT

SECTION-B PROF.B.ILAHI ASSIGNMENT NO.1 (DUMPING AND ANTI DUMPING DUTIES)

GROUP MEMBERS: IQRA ZAFAR FARHAN HASEEB AMMAR NAQVI KHURRAM SHAHZAD HASSAN NAEEM L1F08BBAM2116 L1F08BBAM2004 L1F08BBAM0075 L1F08BBAM2002 L1S08BBAM0075

DATED: 15th MARCH 2012

WHAT IS DUMPING? A company is dumping if it is exporting a product to the EU at prices lower than the normal value of the product (the domestic prices of the product or the cost of production) on its own domestic market. The European Commission is responsible for investigating allegations of dumping by exporting producers in non-EU countries. It usually opens an investigation after receiving a complaint from the Community producers of the product concerned, but it can also do so on its own initiative. WHAT IS THE LESSER DUTY RULE'? A duty may be imposed to remove the effects of dumping on imports of a particular product. An assessment is also made of the level of duty needed to remove the injurious effects of dumping. Measures will be imposed at the level of dumping or injury whichever is the lower. WHAT ARE ANTI DUMPING DUTIES? If we talk about anti dumping it's quite opposite, it is the fine imposed on apprehensively lowprice imports just for the sake to increase prices in the importing countries than their home town and protect their local industry from unfair competition. Anti-dumping duties are assessed generally in an amount equal to the difference between the importing country's price of the goods and (at the time of their importation) the market value of similar goods in the exporting country or other countries. After receiving a complaint from the community producers of the product concerned, the commission publishes a notice in the EU's official journal opening an anti-dumping proceeding. The maximum time limit for an investigation under these proceedings is 15 months. The detailed findings are published in the official journal, for example, as a regulation imposing anti-dumping duties or terminating the proceeding without duties being imposed. WHAT ARE THE SECTION UNDER WHICH ANTI DUTY IS CHARGEABLE? When an article is exported from any country or territory When there are no sales (value) of like products in their domestic market of exporting countries When the central government, in respect of the dumped article under inquiry, is of the opinion that: 1- There is a history of dumping which caused injury or that the importer was, or should have been, aware that the exporter practices dumping and that such dumping would cause injury; and

2- The injury is caused by massive dumping of an article imported in a relatively short time which in the light of the timing and the volume of imported article dumped and other circumstances is likely to seriously undermine the remedial effect of the antidumping duty liable to be levied. Usually, for calculating dumping margins the importing member authority selects an investigation period which is normally one year for the detailed study of cost and pricing data which has to be provided by the exporter or producer. WHY DOES WTO NEED TO HAVE AN AGREEMENT ON DUMPING? By having an agreement on dumping WTO is able to make sure that its members agree on what is dumping, that is, it has created a harmonized system of what is accepted as dumping: Article VI of GATT authorizes the importing member to take measures to offset the injurious dumping. It helps to neutralize unfair trade practices by foreign exporters. It recognizes the potential for trade restrictive application. It therefore prescribes in some details the circumstances under only which the anti-dumping measures may be imposed. It therefore prevents members from abusing anti-dumping laws by discriminating against other members in order to protect its domestic market. WHAT ARE THE CIRCUMSTANCES UNDER WHICH ANTI DUMPING DUTIES ARE IMPOSED? Imports must be dumped: A product is considered as being dumped if its export price to the EU is less than its normal value. Injury: there must be material injury to the Community industry producing the like product Casual link: the dumped imports must be a cause of the injury. They need not be the only cause - other factors might also contribute. Community interest: the dumped imports must be a cause of the injury. They need not be the only cause - other factors might also contribute.

HOW DO YOU CALCULATE DUMPING MARGIN? If a products Domestic price= 100 The export price of the same product= 80 Dumping margin= 20/80 x100 = 25% 120 80 40/80X100=50%

SOME ANTI-DUMPING STATISTICS These statistics provide an overview of global anti-dumping activity for 2008 and for the period 1995 to 2008. Activity is measured only by the number of cases initiated. Not all cases result in the adoption of anti-dumping measures.