One specific kind of non-tariff barrier is anti-dumping investigations. At the seminar, the commerce minister announced that India is considering complaining to the WTO about the EU's imposition of anti-dumping duties on unbleached cotton exports from India. Although the EU closed investigations against such exports, fresh investigations have been launched as a result of French pressure. There are several reasons for dissatisfaction with the Uruguay Round anti-dumping agreement. The first anti-dumping agreement was concluded at the Tokyo Round negotiations and, according to the WTO, the revised agreement is an improvement because it 'provides for greater clarity and more detailed rules in relation to the method of determining that a product is dumped, the criteria to be taken into account in a determination that dumped imports cause injury to a domestic industry, the procedures to be followed in initiating and conducting anti-dumping investigations, and the implementation and duration of anti-dumping measures'.
But the implementation of the agreement reveals that some of this optimism is unwarranted, and there are several reasons for this. First, dumping takes place when a product is exported at less than its 'normal value'. To calculate normal value, one sometimes uses the sale price in the domestic market. But in using such figures on domestic sales, sales at prices below unit fixed and variable costs are excluded. Apart from being arbitrary, this jacks up the margin of dumping. Second, the time period for which sales and cost figures are required is subjective and arbitrary. Third, in computing the margin of dumping, the importing countries need information on taxation. This is fine as long as taxation is commodity-specific. But when it isn't, the insistence on commodity-specific taxation figures and a further insistence on their verification, offers scope for harassment. Fourth, sales and cost figures are supposed to be for the 'exporter or producer' concerned. Yet, importing countries insist on figures for the entire industry. Fifth, dumping per se is not prohibited; it is prohibited only if it leads to injury to domestic producers. In establishing this, one needs to define what a 'like domestic product' is, and this gives rise to further subjectivity. This is important because anti-dumping investigations are not pursued if the exporter accounts for a minimal market share in the importing country's market. Sixth, the new agreement is extremely stringent in establishing a causal link between dumping and injury to domestic producers. But in practice, these principles are not followed. But having noted all this, the crucial point is that redressal mechanisms to address these issues are available. India should lodge a complaint with the WTO. What is the commerce ministry waiting for?
