- As per WTO Agreements, anti-dumping / countervailing measures may be imposed for a period of five years, unless the investigating authority after review, determines that continuation of measures is appropriate, in view of likelihood of continuation or recurrence of dumping / subsidization and injury, in the absence of duties.
- Jurisdictions such as Canada, European Union and USA have had duties in force against certain products since before 1995. Therefore, the duties have continued to be in force for more than 25 years, and in some cases, even more than 35 years.
- India has continued duties for more than 15 years only in 16 cases, which is lower than that in other jurisdictions.
- Continuation of duty is appropriate as long as the unfair practice continues, or likelihood of its recurrence remains. For instance, even though China became a member of the WTO in 2001, it remains a non-market economy due to government control. In such a situation, even after imposition of duties for longer period, the likelihood of dumping or subsidization may subsist.
- The period for which duty has been in force is irrelevant to the determination.
A WTO member may impose trade remedial measures against imports from another member country, in case of unfair trade practices such as dumping or countervailable subsidies provided in the exporting country. The Anti-Dumping Agreement and the Agreement on Subsidies and Countervailing Measures state that a duty shall be imposed only for a period of five years, unless an investigating authority, after conducting a review, determines that expiry of duty is likely to lead to dumping / subsidization and consequent injury. Pursuant to such determination, the duty may be continued for a further period of five years. However, no upper limit has been prescribed regarding the period for which the duty shall remain in force.
Practice in various countries
A number of countries have imposed anti-dumping duty and countervailing duty for a long period of time in view of likelihood of continuation or recurrence of dumping / subsidization and injury to the domestic industry. For example, the USA imposed antidumping duty on imports of Welded Carbon Steel Standard Pipes and Tubes from India in May 1986, European Union imposed anti-dumping duty on imports of Silicon Metal from China in July 1990, Canada imposed anti-dumping duty on imports of certain Refined Sugar from Denmark in November 1995 and India imposed anti-dumping duty on imports of Measuring Tapes from China in October 2003. Such duties have remained in force till date.
Further, it is a common practice in a number of jurisdictions to impose anti-dumping duty and continue such duties for a long period till they hold that there is no likelihood of dumping and injury to the domestic industry. More than 60 products have been subject to anti-dumping duty for over 15 years in the USA, while more than 30 products have been subject to duties over such duration in the European Union. While in India more than 50 products have been subject to anti-dumping duty for more than 10 years, about only 16 products have been subject to anti-dumping duty over 15 years.
products have been subject to anti-dumping duty over 15 years. Thus, the law as well as the practice of member countries is clear that anti-dumping duty or countervailing duty may remain in force till there is likelihood of dumping / subsidization and injury in case of expiry of such duty. There is no upper bar on the time limit for which anti-dumping duty or countervailing duty can be levied on imports of a product.
Should the measures continue in perpetuity
The question that arises, therefore, is whether the measures can continue in perpetuity. Since anti-dumping duties are remedial measures, such measures should continue to remain in force till the time the exporters of the product are engaged in unfair trade practices of dumping leading to or likely to lead to injury to the domestic industry.
The necessity of imposing trade remedial measures for a longer period is also due to the Government practices. In a number of cases, where, countervailing duty has been levied by the importing member country, the Governments of the exporting countries have not ceased provision of countervailable subsidies to the producers in their countries.
Another instance is of China, which became a member of WTO on 11th December 2001. However, it is still being treated as a non-market economy country due to substantial government control of the economy. The prices of products in China are not decided as per the market principles which provides competitive advantage to the producers in China. Further, the utilities are controlled by the Government and offered at prices less than the international prices. In such a case, the producers in the importing market economy country will not be able to compete with producers in the non-market economy country, necessitating duties for a longer period. Therefore, in case of a situation where the unfair practice has not abated or likelihood of its recurrence and injury as a result of the same remains, the question of withdrawal or discontinuation of duty does not arise.
Different situation for safeguard measures
While anti-dumping duty or countervailing duty are remedial measures levied by the Government in case of unfair trade practices adopted by the producers in the exporting country; safeguard measures, on the other hand are protective measures which are aimed to protect the domestic industry from significant increase in imports due to unforeseen circumstances and to allow adjustment to such imports. Accordingly, the Agreement on Safeguards states that the safeguard measures should be applied only for a period necessary to prevent or remedy serious injury, and should not exceed a period of four years unless extended. Further, even after extension, the total duration of levy cannot exceed eight years. Thus, safeguard measures being protective in nature, the upper limit for the total duration for which the measures can be in force has been prescribed.
Therefore, the need for continuation of duties arises in case there is positive evidence showing likelihood of continuation or recurrence of dumping / subsidization and injury. While the performance of the domestic industry might have improved during the tenure of the duty, it does not mean that there is no need for continuation of the duty in force. Once the duty expires, the industry might once again suffer injury as a result of unfair trade practices. The same also cannot be considered to be an inefficiency on the part of the domestic industry, since the underlying consideration is whether the industry is faced with unfair competition.
It should also be considered that once duties expire, it takes at least two years until the industry can be protected again from the unfair imports by re-imposition of duties, considering the minimum period of investigation of one year, and an investigation spanning another year. Thus, continued imposition of duties may be imperative for a longer period, where unfair practices continue, that is, there is likelihood of dumping / subsidization and injury in case of cessation of the duty. The period for which the duty has been in force is entirely irrelevant to such determination.
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Originally published January 2024
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