INTRODUCTION

Dumping can be explicated as exporting goods at lower prices than that of the domestic
market prices. In the process of dumping the exporter dumps its product in the domestic
industry and sells such product at a cheaper price than that of the similar products1.
dumping is a business practice with an unfair act because products with the same quality
should be sold with the equal price wherever they are selling, however, it would be unusual
if the prices are quoted same everywhere. In this world, most of the countries are tightly
committed to the principle of free and fair trade between nations, which is the very
foundation of the multilateral trade order established by World Trade Organization. While
a remarkable step has been initiated by most of the countries especially developing country
like India towards setting up a free trade mechanism a long with the elimination of
Quantitative Barriers on imports as practice of fair trade needs to be made certain. Owing
to the need, countervailing of anti- subsidy, anti-dumping and related preventive measures
have been initiated in the past.

All these measures fall under the category of trade remedies, which the indigenous
organization could benefit from provided the basic criteria is fulfilled under law. The
Indian government has requiredinstitutional and legal regime for governing these steps.
However, different functional aspects including legalthat were included in these schemes
had to be understood in the right view point.Unanticipated safeguard steps fall under
categories of antidumping, countervailing and safeguard measures.1

This can be evidenced by the advantage theory proposed by the famous economist David
Ricardo. This is a famous economic theory primarily focused on the possible and important
gains from trade for individuals, firms, or nations with different factors process. With
respect to this theory in an economic model, an industry or a country usually has a
comparative benefit over another industry or country while producing a particular good
and in case a country is capable of producing that particular good at relatively a lower
price, that is at a relative lower marginal price before trading, it is a good opportunity.
When the theory of

1
Aradhna Aggarwal, “Anti-Dumping Law and Practice: An Indian Perspective”, Indian Council for
Research on International Economic Relations, New Delhi April ,2002, P.23.
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comparative benefit is considered, it is obtained that under a trade free from barriers; the
country shall produce more goods and consume little of the same kind, which has a
comparative advantage for the country2.

The comparative advantage theory was advanced by David Ricardo in the year 1817. The
primary objective as why this theory was formulated in order to explain how the countries
are engaged in international trade, even though that country is good and efficient in
producing the same or similar kind of product at domestic level at cheaper rate than that of
which imported from another country.

According to David Ricardo that if two countries capable of producing the same products
and when they engage in free trade, then both of the countries will increase its overall
usage and utilization of the product by exporting the goods for which it has a comparative
benefit over the product while importing the different product3. The classical theory of
comparative benefit was evolved by David Ricardo and it is regarded as one of the most
influential theory in the stream of international trade and economics, Ricardo's theory
shows that comparative advantage rather than absolute advantage is main cause for much
of international trade.

The concept of free trade has originated mainly from the period of industrialization.
Industrialization is the phase of social and economic reorientation that transformed a
human being from an agrarian society into an industrial one. It is a part of an extensive
modernization process, where economic development and social change are related to
technological creativity, in particular with the development and production of large-
scale metallurgy and energy processes. The purpose of manufacturing is to
intensify the organization of an economy. A change in terms of philosophy is observed
where people develop a different attitude towards their perception about nature, and a
process of universal sociological rationalization is brought about by Industrialization. A
vital concept of Laissez-faire has been discovered during the evolving phase of
industrialization. Laissez-faire has unfolded to be part of an economic environment in
which the transactions by private firms or organizations are free from tariffs, subsidies,
invasive restrictions imposed by the government, with effective rules and regulations to

2
AvinashDixit& Victor Norman, “Theory of International Trade: A Dual, General Equilibrium
Approach”, Cambridge University Press, 1980, p. 2.
3
William J &Baumoland, “Alan S. Binder, 'Economics: Principles and Policy Cengage Learning”, Cengage
Learning 2011, p.50.

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guard property rights4. The term laissez-faire is a French word and means ‘let them do’.

Laissez-faire as a system of thought rests on the following:

1. The basic unit of society is the individual.

2. Corporations are creatures of the State

3. Harmonious and self-regulating is the physical order of nature.

4. The individual has a natural right to freedom.

Thus, in one way we can say that industrialization has become first step initiated by the
countries to promote industry-based living thereby promoting the economy of the country.
But the initial actions of industrialization have only conferred to the developing countries
which has led to the exploitation of underdeveloped and developing countries by the
developed countries. In a broader way the concept of anti-dumping as a protective measure
has got its importance by the New International Economic Order proposed by United
Nations.

The New International Economic Order (NIEO) contained series of propositions that were
presented by some developing countries during the 1970s via the United Nations
Conference on Trade and Development to stimulate their interests by refining their terms of
trade, escalating promotion assistance, reduction in tariff rates, and other means. It implied
to be a emendation of the international economic system in the approbation of Third World
countries, after taking the place of Bretton Woods system, and the countries that created it,
especially the U.S. had been at an advantageous position.

The main principles of NIEO were:

1. The right to control and regulate the operations of multinational

corporations to the developing countries must be provided that operate in their territory.

2. There must be freedom to nationalize or seize foreign property on the

prerequisites that are in their favor.

3. There must be freedom to establish associations of primary commodities

4
Gaspard Toufick-A, “political Economy of Lebanon; The limits of Laissez faire”, Boston Brill
Publishers,2004. P.145.

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manufacturers that are close to OPEC. This right must be acknowledged by other states and
must abstain from making military, economic, or political decisions.

4. International trade should be based on the need to ensure stable, equitable, and
remunerative prices for raw material, generalized non-reciprocal and non- discriminatory
tariff preferences, as well as transfer of technology to developing countries; and should
provide economic and technical assistance without any strings attached.

This new International Economic order thus helped the countries especially the third
world that is the then developing and underdeveloped countries to increase the productivity
and to establish a stable economic position. Efficiency is a vital factor as it determines the
production performance of firms and nations. Escalating national productivity can increase
the standards of living as increased income develops people's power to consume goods and
services, recreate, progress in education and housing and endow to environmental and
social programs. To be more profitable, productivity growth plays a vital role in business.5

Currently the International Development Community (World Bank, Organization for

Economic Co-Operation and Development (OECD), many United Nations departments,
and some other organizations endorses development policies like Co-Operation amongst
third world communities. A few members of the Economic communities don't believe in
recognizing that contemporary industrialization policies are sufficient to be of any
advantage in the long term to the global south which implies to the Third World
countries. The main myth is that only inefficient local industries would be created that
would be incompetent in the free-trade commanding political order.

FACTORS FOR DUMPING

Dumping is an unfair trade practice by using discriminatory pricing. As general norm the
price of products with same quality has to be of same wherever they are sold, but it can be
of different due to some factors as well. There are various factors which causes the
differences in the pricing of a product in the market of a country. They are

5. import tariff,

6. local taxes,

7. market size,

5
Sheela Rai, “Anti-Dumping Measures Under GATT/WTO”, Eastern Book India Company,2004, P.129.

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8. demand structure,

9. supply condition etc.

Dumping is a process where exporting country sells their product at very lower and cheaper
rate than that of the same or similar products which are manufactured by the domestic
industries of those countries to which the product is being exported. This situation is called
as dumping the product to the market of another country.

The quantum of injury caused by dumping can be analyzed by considering two main
factors such as volume effect and price effect of the products which are being dumped
imports. While considering the quantum of dumping it is also needed to analyses the
magnitude of how much injury is been caused by the dumping to the such domestic
industry by analyzing various factors such as magnitude of dumping, decline in sales of the
domestic products, selling prices of the domestic and imported products, profits, market
share, production, utilization of capacity etc.

As a general view we can say that dumping of product occurs when a country exports their
product to a country and sells their product at rate less than the normal value of the product
which are being produced by the domestic industries of that country. Dumping does not as
such include imports that are being bought at low prices. The rates at which like articles are
supplied in the indigenous market of the exporter are considered as the Normal Value of
those articles.
THE NORMAL VALUE

Normal value is the benchmark price at which a product is being sold in the home market
during the ordinary course of trade. The normal value is being determined by the domestic
governing authorities by looking into the domestic dales of that product in question. If the
normal value of a product is hard to determine by means of domestic sales two alternative
methods can also be used to determine the normal value, they are:

1. By comparing the representative export price to another appropriate third

country.

That is if the normal value of the any product can be determined also by comparing the
value of such imported product with the value of those similar products which has been
imported to another third country.

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For example, if a specific type of leather is being imported from America to India and such
type of leather is not being manufactured in India but such are made in Sri Lanka then its
normal value can be ascertained by comparing the price of such Leather in Sri Lanka and
those imported from America

2. Production cost of the product where that product is being manufactured along
with certain some other minor factors such as selling and general costs etc.

THE EXPORT PRICE

The export price of goods that are being imported into any country is the price which is
paid or is payable for the products by the first buyer. If the goods are not resold as
mentioned above or not resold in the same condition as it had been earlier imported, their
export price may have to be ascertained on an affordable basis 8.For example if a country
exports a certain product to another country then the basic price without any additional
taxes or encumbrances payable to that product by the first person who buys that product
from the importer country is considered as the export price of that product. It can be
illustrated by a table given below:
1.1 Calculation of export price

Domestic Sale Export Sale

Factory price Rs.100 Rs.100

Domestic freight Rs.50 Rs.50

Export documentation Rs.25

Ocean freight and insurance Rs.100

Import duty Rs.10

Wholesaler markup Rs.20

Importer/distributor markup Rs.40

Retail markup Rs.50 Rs.60

Final consumer price Rs.220 Rs.385

Here the first independent buyer in the importing country has to pay various extra charges
for the product such as export documentation, Ocean freight and insurance, Import duty,

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Importer/distributor markup etc.

The Export rate of the products that are purported to be dumped into India basically
implies the rate at which it was actually exported to India. In general, Insurance, Cost, and
Freight value are subtracted from the adjustments on account of insurance, ocean freight,
and commission, etc. is applied to arrive at the value at the ex-factory level.

THE DUMPING MARGIN

Dumping margin is interpreted to be the difference between the normal value and the
export price of the product of a country where the product has been imported. When export
value is lesser than the normal price, it can prima facie be said that there is dumping.

For Example: If the Normal value of a woolen garment produced by one of the domestic
industries of India is Rs.100 per piece whereas the Export price of the same woolen
garment is Rs.80 per piece it is a clear case of dumping. It can be noted that the normal
price is higher than export value. Hence, it can be concluded that the dumping margin in
the above case is Rs 30 per piece i.e. 20% of the export price.

This case summarizes that dumping is based on the function of two variables - Normal
Value and Export Price. If one intends to know if there is dumping margin or not, both the
variables need to be considered and compared at the ex-factory level.

NON-INJURIOUS PRICE AND INJURY MARGIN6

Non-injurious Price is spelt out as the fair selling price (notional) of a good imported into a
country in comparison to the price of the same product of a domestic manufacturer.

Non-Injurious Price has the ability to reasonably recover the cost of production and profits
after negating the severe impacts of those factors of production which could have adversely
affected the industry and for which the imports that were dumped could not be held
accountable.

Leaving aside the calculation of dumping margin, the Designated Authority additionally
computes the Injury Margin for the Industry. The Injury Margin is therefore the difference
between the Non-Injurious Price and the Landed Value of the dumped imports due to the
Indigenous Industry.
6
Non-Injurious Price (NIP) is that level of price, which the industry is, expected to have charged under
normal circumstances in the Indian market during the Period defined.

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According to the World Trade Organization (WTO) rules, an organization is said to have
indulged in the activities of dumping if it supplies its goods to a foreign country at a price
which is below the normal value. It is not important whether a foreign organization sells at
a higher or lower rate than the indigenous ones; for as much as the rates charged in the
home country is lower than in its own country, the organization can be charged for
dumping. Dumping transpires when the Normal Value is higher than the export price of
goods imported into a country of like articles which are sold in the home market of the
exporter. Imports at cheap prices never show dumping. The domestic industry must be able
to prove that dumped imports have caused or threatened to cause material injury to the
indigenous industry. That is the domestic company should prove that any such imported
product can be sold at a price which is very much lower as compared to the price of same
type of products manufactured by the domestic industries. If so it can be considered as
dumping. And any such action may cause harmful effects on the domestic industries.
Material retardation to start the operation of an industry is also considered as an injury. The
threat or material injury cannot be based on mere statement or allegation. The required
evidence must be produced to aid the issue of material injury.

DUMPING DUTY – CONCEPT OF ORIGIN

Anti-dumping duty can be interpreted as an advocator of tariff which a domestic
government levies on foreign imports and it believes is priced lesser than the fair market
value. Anti-dumping duties are levied by the Department of Commerce and they often
are found to exceed 100% in the United States. The concept of anti- dumping duty finds its
base in the trade habitude of 1930s when most of the countries indulged in the activities of
dumping theproductsatleast prices into foreign countries for the purposes of earning foreign
exchange. Devious currency practices such as the devaluation of currency, has been very
prominent in such countries for the purpose of cost reduction of the produce manufactured
and global trading by domestic industries.

The legal implications against dumping at the global level increased by the time nineteenth
century came to an end and it was used by different countries as a policy substitute for
periodic revision of import tariffs to safeguard their indigenous industries from the harmful
effects of dumping. In 1904, Canada was one such country to first launch such measures
against firms in America who at concessional prices were involved in steel dumping. Many
Commonwealth countries took cognizance and charged dumping duties for the coming ten

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years on policies of predatory pricing of countries exporting goods. The threat posed by the
very perception of predatory pricing ensued in formulation of the first anti-dumping
American legislation under the Revenue Act of 1916. Eventually, Australia, New Zealand
Great Britain, and the United States implemented advanced statutes regarding dumping in
the year 1921. In parallel lines with Canada’s original legislation, the above-mentioned
nations’ legislations served as a base for the introduction of Article VI11 of The General
Agreement on Tariff and Trade (GATT), 1947.

The General Agreement on Tariff and Trade (GATT) 1947 was a benchmark that
formulated rules administering International Trade andconstitute the free trade regime
between countries. During the GATT was formed, the advantages and disadvantages of
dumping were analyzed which stated that dumping in its form was not a bad practice, it can
however encourage the firm to function smoothly. Dumping was discovered to be a place
of origin of supplementary revenue to the industries and also would help the consumers by
availing the goods at an affordable price. Hence, dumping was not banned under the GATT
but, when it was found that dumping was causing any harm or injury to the indigenous
industry by the country that was importing, then, as an action, the GATT indicated its
signatory Countries to revoke anti-dumping measures to negate the effect of dumping.

The first member nation was U.S.A which to attend to the issue of unfair trade practices
with respect to dumping and subsidized exports before the scrutinizers of international
trade. A general support against countervailing measures and antidumping, was created
though there were differences related to the retaliatory measures rather than duties imposed
on anti-dumping activities. The developing countries were in support of a broader
definition and intended to include service, price, exchange and social dumping, while the
developed countries were in support of a confining definition to abstain the opening up of
retaliatory measures. Resolving the issue of retaliatory measures, the process of levying
quantitative restrictions was phased out and imposition of antidumping duties were
accepted as the right measure to be taken to neutralize dumping margins. Therefore, the
first rules and conditions against curbing the activities of dumping under which most
countries felt secured in adopting defensive measures, were included in Article VI of the
GATT7.

7
Inge Nora Neufeld, “Anti-Dumping and Countervailing Procedures Use or Abuse? Implications for
Developing Countries”, United Nations Conference on Trade and Development Policy Issues in International
Trade and Commodities study Series No. 9, 2001.

9
The rules and regulations made to curb dumping were furthermore taken up for intense
discussions during the Kennedy Round of Negotiations (1946-1967). In Geneva,
Switzerland, the sixth session of the Kennedy Round of General Agreement on Tariffs and
Trade (GATT) negotiations was held between 1964 and 1967. It was the last GATT round
to have reduction of tariff rates as its prime objective. It was however, the first round of
GATT to have dealt with the non-tariff issue, such as dumping. It initiated a linear style of
talks and negotiations. In contrast, many countries offered cuts of a certain percentage to be
given on tariffs of all countries that were participating. The Tokyo Round of negotiations
(1973-1979) brought revolutions with respect to the injury criteria. The Tokyo Round had
102 countries participating in it and was held from 1973 to 1979. It continued to make its
efforts to effectively reduce tariff rates. The reduction in tariffs existed for over a period of
eight years and an element of harmonization which said higher the tariff, the larger the cut,
was involved proportionally. Eventually numerous codes were amended in the Uruguay
Round of Negotiations which resulted in multilateral commitments that were accepted by
all WTO members.

The provisions of anti-dumping acclaimed visibility and universal acceptance only after the
establishment of World Trade Organization (WTO) in 1995. Prior to WTO, there existed
zero restrictions on tariffs and subsequently, the effect of dumping was nullified by
imposing high tariff rates. Under the reign of WTO, the trade that took place between the
members of WTO was relaxing the tariff rates leaving zero scope for the member nations
to ignore the bad effects of unfair trade practices by increasing tariff rates and this caused
more application of anti-dumping measures.

Earlier to the 1980s, regular users like the United States, Canada, Australia, the European
Union, and New Zealand were considerably active in ensuing the antidumping actions.
After the Uruguay Round the code against dumping was promulgated in the form of an
Agreement on Implementation of Article VI of GATT, 1994, commonly called the Anti-
Dumping Agreement, causing the adoption of antidumping laws by more number of
countries and creating an upsurge in the number of antidumping investigations in the last
two decades.

CONSEQUENCES OF DUMPING
Poor countries and citizens of these countries are usually benefitted from dumping, with
low cost of manufacturing and overheads facilitating selling of goods done at lower prices

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in the market to an extent. An encouragement of this type of dumping must be done. The
only non-acceptable and dangerous form of dumping is predatory dumping, which happens
when a foreign firm, sells goods at lower rates or below the manufacturing cost in the
indigenous market of the importing country with the aid of subsidies obtained from its
Government, in order to gain monopoly by eliminating producers of the domestic country.
It can affect the indigenous industry causing reduction in its market share and sales
volume, sales price, resulting in downfall in job creation, profitability, inability to run the
business and thus leading to monopolistic situations. A case where the dumping firm
decides the price to attain monopoly can prove dangerous to the entire society because it
will hurt both consumers and indigenous producers. Such a business practice by a huge
number of free trade opponents is considered undesirable.

In some cases, the export price may even be lower than the actual cost of production. Free
market supporters support that this practice will prove to be an advantage as it will allow
buyers to enjoy the products at reasonable prices. On the other hand, it is considered by the
critics that dumping practices only support the negative consequences of free trade. For
example, major losses could be suffered by certain local industries in countries where the
dumping of products is done. That if a mobile phone is imported from China to India and
if that mobile phone is cheaper than that of such mobile phones which are being produced
in India then such importation will result in dumping. Because if two same identical
products are played into a market then people will always prefer cheaper product. That is, it
then such imports will cause high economic loss on the domestic industries. This is reason
behind free market critics advocating the establishment of protectionist policies against
predatory pricing practices and dumping.

SOLUTIONS BROUGHT UNDER INTERNATIONAL LAW

In 1904, anti-dumping measures were first launched by Canada. 8 Along with the original
legislation of Canada, i.e., the Customs Tariff Act, 1897, other legislations also helped to
be the base for Article VI of The General Agreement on Tariff and Trade (GATT), 1947.
Therefore, the first multinational conditions and regulations against dumping under which
countries felt safe in taking defensive steps, were included in Article VI of GATT9.

8
Dr.Ved Prakash, “Anti-Dumping Countervailing and Safeguard Measures in Multilateral Trade Regime”,
Book well Publications, 2007, P. 79.
9
Inge Nora Neufeld, “Anti-Dumping and Countervailing Procedures Use or Abuse? Implications for
Developing Countries”, United Nations Conference on Trade and Development Policy Issues in International
Trade and Commodities study Series No. 9, New York And Geneva2001.

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Under the WTO Agreement of 1994, dumping is termed unacceptable (but not banned) if it
is likely to cause or threatening to cause material injury to an indigenous industry of the
importing country.19However, where dumping causes the above mentioned injury, the
designated authority of that Country shall initiate required action for enquiries and lead to
imposition of anti-dumping duties.Though dumping per se which is not prohibited, only
condemned causes any injury, the General Agreement on Tariffs and Trade (GATT)
provides for a mechanism for the governments to react under Anti-Dumping measures. As
a result, importing countries are free and authorized to implement measures to phase out
injurious dumping if they desire, but only subject to the rules and regulations prescribed
under the Agreements pertaining to Anti-Dumping on how a reaction can or cannot be
given to dumping by the Government. Remedial action taken to curb dumping in general
involves imposing an additional import duty on the goods exported from the country to
bring its rates nearer to the normal value and removing the injury to the indigenous
industry in the country importing the goods.

ANTI DUMPING AND LEVY OF CUSTOMS DUTY

The Customs Authority imposes and collects the Anti-dumping duty; but it is still
entirely different from the Customs duties not only in its concept and matter, but also
in its purpose and function. The main differences between the two are listed below: -

 Anti-dumping and similar measures are conceptually linked to the notion of

fair trade. Their object is to safeguard the situation arising out of practice of
unfair trade while the customs duties considered a means of raising revenue
and for overall development of the economy.

 Customs duties fall under the trade and fiscal policies of the Government
whereas anti-dumping and anti-subsidy measures are existent as remedial
measures for controlling trade practices.

 The object of introduction of anti-dumping and allied concepts is to curb the

injurious effect of international price discrimination whereas customs duties
have implications on the government revenue and for the overall development
of the economy.

 Anti-dumping duties do not possess the nature of a tax measure as much as

the Authority over it is empowered to suspend these duties in case of an

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 exporter who offers a price undertaking. Therefore, measures of this nature are
not always in the form of duties/tax.
 Anti- subsidy and anti- dumping duties are imposed against exporters /
countries those are as much as they are exporter specific and country specific
as against the customs duties which are universally applicable to imports not
requiring the details of countries’ and exporter’s origin.

Hence, it is explicit to note that there exist basic conceptual differences between the
customs duty and the anti-dumping duty. It is also evident that the anti-dumping duty
is levied over and above the normal customs duty.

STATEMENT OF RESEARCH PROBLEMS

The research problems that I will be analysing in this research work are:

 There are various anti-dumping rules in various developing countries and so

how far these rules have its effectiveness on their domestic industries of those
developing countries.

 what is the importance of anti-dumping rules with respect to developing

countries and their role in protecting the domestic industries of such
developing countries.

 what are the rules made by UN, WTO and international law in dealing with
anti-dumping.

 what is the issue regarding the applicability of international law in their

domestic scenario while tackling the problems regarding anti-dumping.

 what are the various steps taken by United Nations and such other national
and regional organization for the protection of interest of parties to an
international trade. Sixthly how far the laws regarding international trade made
by international organization and institutions such as UN, WTO are applicable
in the developing countries and least developed countries. Seventhly what are
the possible misuses of the anti-dumping laws by the domestic countries for
various benefits Anti-dumping duties and import tariffs.

OBJECTIVES

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 The key objectives structure this study:

1. To analyse the binding legal power of the international laws on anti-

dumping for the International exports and imports.

2. To determine the role of WTO and such other international and

regional organizations in controlling and maintains a liberal trade policy.

3. To analyze whether the countries are misusing any of the provisions

of anti- dumping law.
4. To analyze how far these anti-dumping rules been effective on
international trade.

5. To know how much anti-dumping has effect for domestic industry.

6. To check is anti-dumping a measure of protection for domestic industry?

RESEARCH QUESTIONS
1. What is the role of WTO and other trade organization in protection
against unfair trade practices and promoting international trade?

2. What is the role of anti-dumping dispute settlement mechanism

in a free trade system?

3. What is the significance of trade remedy measure, such as anti-

dumping countervailing and safeguard measure in India?

CONCLUSION

Industrialization in India and across the world has become an important step initiated by
countries to promote industry-based living thereby promoting the economy of the country.
But the companies that operate businesses in the world face a wide multitude hurdles in
conducting business across the borders and the trade hitch ranges from the anti-dumping
duties to specific provisions that are applicable to the sector in the entrepreneurs do business.
Often, these barriers contravene WTO or other international trade law obligations and
commitments. Trade rules of such kind preclude discrimination on the basis of nationality in
the case of matters like public tenders and foreign investment; they outlaw customs barriers

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on the imposed consumer goods for inconsistent reasons of public welfare and well being.
Tax discrimination is forbidden, and using trade sanctions and other protectionist measures
are totally restricted.

However, when trade laws are stern, many businesses divert their business to resort to the
activity of dumping. Dumping is the process where goods are exported and sold at a price
lesser than the normal price. Fundamentally, business resort to adopt dumping as the
businesses desire to enlarge its market share by subsidizing the export business. It has been
found through the study that dumping effects competition. However, to curb dumping, the
WTO has formulated anti-dumping legislation. All WTO members are required to be in
conformity with the anti-dumping agreement. The WTO agreement ensures that antidumping
actions will proliferate. On the one hand, it calls for a significant reduction in tariffs and
proscribes or limits other import protections, thereby exposing industries throughout the
world to international competition as never before. On the other hand, it requires signatories
to ratify legislation consistent with the Antidumping Agreement, becoming consequential to
a rampant increase in the number of countries that involve themselves in the activity of
dumping. Dumping for most countries has become the most potent tool for import protection.
An increase in the antidumping actions is palpable. As more countries target one another,
there will be a consequent drag on international trade, particularly in sensitive sectors such as
steel, chemicals, textiles and electronics.

The increase in antidumping actions undoubtedly will give rise to calls for reform from
multinational corporations that are the frequent targets of antidumping actions, as well as
end user industries dependent upon international suppliers, economists and consumer groups.
These critics, and their government supporters, will call for further disciplines on initiation of
antidumping actions, and the roll-back of the current trend in litigation, forcing the issue
onto the agenda of future rounds of multinational trade negotiations, possibly in connection
with competition policy. The defenders of the anti-dumping laws will vehemently thwart any
anticipated weakening of the Antidumping Agreement. The antidumping laws have served as
a safety valve, arguably assisting in trade liberalization in the sense that they allow Members
a political fall-back, enabling them to agree to further tariff reductions. The domestic
industries traditionally supporting strong antidumping laws throughout the world tend to be
politically powerful and economically significant, thus assuring a constituency for strong
antidumping protections in future multinational negotiations.

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Since the countries are coerced to reduce tariffs and renounce other trade barriers in order to
comply with the WTO rules, it will eventually lead to increase in absolute pivoting on the
WTO Antidumping agreement. The WTO has established a new and improved binding
dispute resolution procedure, under which a complaining Member may request that a WTO
panel render a ruling on whether the laws, practices or decisions of another Member are
consistent with WTO obligations and principles. The WTO Antidumping Agreement sets
forth special rules for resolving disputes involving antidumping cases. The growing number
of activities of antidumping has resulted in establishment of the WTO Dispute Settlement
Body ("DSB") in order to speed up the decision making process and resolve disputes. The
DSB rules play a significant role because they offer countries meaningful recourse to an
objective international tribunal when they believe their exporters were unfairly subjected to
dumping measures. Developing countries are especially encouraged by the binding nature of
the DSB process, because powerful industrialized countries can no longer block decisions
favorable to exporters from developing countries.

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