| Most economists argue that AD is anti-competitive, perpetuates "unfair trade laws" and imposes substantial burdens on the consumers and the most efficient exporters while protecting the least efficient import competing firms. |
| AD practices also impose a number of costs on the domestic economy by adversely affecting the importing country's price structure and creating difficulty for industries to obtain the supplies they need. |
| According to a study conducted in 1993, the welfare loss to the US from its AD/ CVD (countervailing duty) measures was between $2 billion and $4 billion every year. Despite these conclusions, however, there has been a spectacular growth of AD investigations in recent years. |
| The use of AD is no longer confined to a limited number of industrialised countries. Developing countries are increasingly becoming users of this tool, too. Several scholars propose to abolish it altogether while others advocate to replace it by safeguard measures or competition policy. |
| The decision of the Ministerial Conference of the World Trade Organisation (WTO) at Doha, however, emphasises the preservation of the basic concepts and principles of the Anti-dumping Agreement (ADA). |
| The only hope that the advocates of reforming this law can find is in including a public interest clause in the Agreement. The current ADA imposes no substantive obligation on the authorities to take the broader public interest into account. |
| Article 6.2 of the Agreement provides that throughout an anti-dumping investigation, all "interested parties" shall have full opportunity to defend their interests. |
| Nonetheless, the Agreement does not contain any provision that requires that the input provided by them be given any weight in actually making determinations or assessing duties. |
| The objective of a public interest clause is to ensure that investigating authorities take into account the interests of not just the affected domestic industry, but also of the consumers (and down-stream industrial users). |
| A properly devised and effectively implemented public interest test can, thus, reconcile a country's antidumping policy with its larger national interests. Adding a public interest clause would also impose due restraint in the application of antidumping measures. |
| Expanding the power of multiple stakeholders to affect the outcome of anti-dumping investigation proceedings may exert some discipline over the application of this law. |
| The public interest clause is not a completely new concept because it exists in some national AD legislations. It should not, therefore, be difficult to address various elements of a public interest test and translate the concept into concrete AD rules. |
| First of all, the class of persons defined by the ADA as "interested parties" should be expanded to include representatives of consumer organisations and industrial users. |
| Under current rules, the investigating authorities allow them to provide information only in those cases where the product under investigation is "commonly sold at the retail level". Furthermore, the criteria for public interest need to be articulated clearly. |
| For this, a non-exhaustive list of factors need to be included, which will guide the authorities whether and how to conduct a public interest inquiry. |
| It should include damage to downstream users; problems of access to inputs; price rise; impact on choice or availability of products to consumers; impact on short-term and long-term competition in the marketplace; effects on employment; effects on public health and so on. |
| The procedures for measuring the impact on industrial users/ consumers will be parallel to those already there for the injury investigations. In other words, the term "public interest" should receive the same treatment as does the term "injury". |
| Before imposing duties, national authorities must ensure that the negative impact of the proposed duty on the community as a whole should not be disproportionate to the objectives of giving protection to the domestic industry against unfair trade practices of the exporters. |
| Some scholars argue that the inclusion of a public interest clause in the legislation will add to the administrative complexity and increase the cost of investigation to the parties and the government. But this will also impose some discipline over the use of this tool. |
| Further, there are arguments that suggest that a strengthened public interest clause does not necessarily mean that consumers' organisations will participate in the anti-dumping cases. However, once the scope of consumers' participation is expanded, this will not be a problem. |
| In Canada, where the term "interested parties" includes all affected parties, there is large-scale participation by industrial users and consumer organisations in public inquiries. It is sometimes argued that the public interest test is not effective even in the countries (such as the European Community and Canada) that follow this test. |
| The public interest provision in Canada was enacted in 1984. Between 1984 and 1999, 294 AD cases were initiated in Canada. Of these, 202 resulted in final measures. Over the same period, however, only seven public interest inquiries were initiated, of which two resulted in duty reduction. The EC experience is not convincing either. |
| Public interest investigation has affected the Commission's decision in only one case till date. Recent developments are, however, encouraging. During 2000-2004, four public inquiries were conducted in Canada. Two of them resulted in duty reduction. |
| To sum up, incorporating a public interest test in the ADA is administratively workable and may prove to be effective in balancing the interests of the domestic producers and the interests of consumers. Even if discretionary in nature, it will provide for a wider and more complete analysis of the situation in the domestic market. |
| (The writer is a consultant with the Indian Council for Research on International Economic Relations) |
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