Julien Chaisse, Debashis Chakraborty and KD Raju

Prior to the wave of globalisation, when tariffs and other trade barriers were high, domestic industries were “naturally” protected from global competition. Although there was a surge in international business in the early 20th century, local industries did not have to worry about global competition. However, since then, the situation has progressively changed through successive rounds of trade liberalisation under the General Agreement on Tariffs and Trade (GATT). The Uruguay Round in particular resulted in significant trade liberalisation by disciplining and reducing several tariff and non-tariff barriers.

Anti-dumping, one of the core GATT/World Trade Organization (WTO) provisions, has recently emerged as a significant trade barrier1 , owing to its growing misuse by both developed and developing countries. The philosophy underlying anti-dumping laws is structurally uncertain essentially, what all anti-dumping laws do is “protect” consumers from low prices. In the WTO context anti-dumping law serves as a kind of safety valve for protectionist pressure. The purpose of the WTO Agreement on Anti-Dumping (henceforth ADA) is thus to ensure that the provision is used only as a contingency measure judged upon merit, and not as a veiled protectionist mechanism.

The main reason why protectionism persists is because of the special interests of specific industries such as steel, petrochemicals, textiles and many similar industries. Viner predicted in 1926 that “the protectionist and the free traders will ordinarily regard cheapness of imports in different ways. To the free trader, cheapness of imports is an advantage, is something to be sought and fostered. To the protectionist, cheapness of imports, at least for commodities whose domestic production he wishes to encourage, is a disadvantage, is an evil which it is the main purpose of the ordinary tariff to destroy or to offset. But where the cheapness is temporary and abnormal, the protectionist and the free trader can logically and in full consistency with their general policies take the same attitude”.2 Jacob Viner is considered as an orthodox classical theoretician on dumping who supported the use of anti-dumping as a tool to protect the local welfare. He never looked into the effects of dumping on international welfare. His ultimate justification for anti-dumping was that dumping prices are “presumptive evidence of abnormal and temporary cheapness.”3 Jacob Viner’s classic work was done against a background of war and tensions. Now the whole international trading scenario has changed, but the protectionism survives.

The rationale for anti-dumping seems to have been misplaced in the first working decade of of the international trading system.4 The present investigative procedures are proven to favour domestic protectionist bias, declaring the whole regime as a non-tariff barrier (NTB).
The ADA has provided numerous loopholes and leeway for manipulation at the substantial and procedural levels. Since the establishment of the WTO in 1995, the number of anti-dumping investigations initiated has increased substantially. 5 The spread of the anti-dumping menace and the consequent vexations is a much-debated issue in the trade policy literature, 6 which highlights the need to reform the WTO agreement.7 As noted above, there are several loopholes in the provision, through which a country can practice protectionist measures.8 To highlight the extent of the growing misuse of this provision as suggested by the trade policy literature, on a number of occasions the initial imposition of anti-dumping duties (ADD), both by developed and developing countries, has been proved WTO-incompatible at a later stage.
During the nineteen-eighties the developed countries were the major users of this provision, although the Latin American countries were not far behind.9 However, in recent years, developing countries from the other regions (e.g. Asia) have increasingly taken recourse to this provision as a protectionist measure, thereby causing a rise in the number of intradeveloping country anti-dumping disputes. Rather than being a weapon for the exclusive use of rich countries, it is now available for use against them.10 This phenomenon has raised the urgent need to tackle the “globalisation” of anti-dumping measures.

The current paper is an attempt to identify the broad areas of violation of the ADA in world trade and is organised as follows. First, we briefly discuss the global scenario. This is followed by the results of our analysis, the overall violations and the scenario involving the major violator, the US.12 Next we discuss the legal and policy implications of the results for developing countries and follow this with a brief case study on India. Finally, on the basis of the findings, some policy conclusions are drawn.