Determining individual cost elements: General and administrative expenses

Foreign companies can reduce the risk of a cost investigation by preparing their responses carefully.

Once a cost allegation has been filed, the foreign company and its lawyers usually have some time to respond. Sometimes the Commerce Department acts on the allegation almost immediately, without waiting for any comments from the various parties.

Preparation of an effective cost response is a very difficult exercise. The company accountants usually do not know anything about the requirements of the anti-dumping law.

As discussed in previous chapters, when calculating anti-dumping margins the Commerce Department seeks to compare prices of identical (or similar) products, but wants to use only those prices in the foreign market that are above cost. The question then becomes which of these two objectives is more important.

This part discussed how the Commerce Department determines which products sold in the home (or third) market should be compared to products sold to the United States.

Changes to the United States law in 1995 also modified the manner in which the Commerce Department converts foreign currencies to United States dollars to calculate anti-dumping margins.

For foreign exporters, one of the most favourable changes to United States law resulting from the Uruguay Round is the requirement that the anti-dumping calculations in original investigations be based on comparison of weighted average home market prices to weighted average United States prices.