ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Review of WTO Rules on Antidumping and Countervailing Measures

Under the WTO rules and the corresponding national laws, trade policy administrators view mere price discrimination to be "dumping", which is defined in terms of the difference between the "normal value" and the "export price". The WTO rules authorise antidumping action against injurious dumping affecting domestic industry. The WTO rules also provide for countervailing action against foreign subsidy on exports causing injury to domestic industry. This paper summarises the policy implications derived from an analysis of case studies relating to antidumping and countervailing duty cases against Indian exporters, after examining the scope for review of the relevant WTO rules under the ongoing Doha Round of multilateral negotiations.

I n common parlance, dumping is taken to mean export sales at a price low enough to harm the interests of the importing country. However, economists prefer a definition of dumping linked to sales below marginal cost. There is scant support in the economic literature for antidumping action, as both price discrimination and below-cost sales can be justified by perfectly normal marketing behaviour under differing demand conditions in domestic and foreign markets. On the other hand, under the WTO rules and the corresponding national laws, trade policy administrators view mere price discrimination to be dumping, which is defined in terms of the difference between the normal value and the export price. The WTO rules authorise antidumping action against injurious dumping affecting domestic industry. The WTO rules also provide for countervailing action against foreign subsidy on exports causing injury to domestic industry. This paper summarises the policy implications derived from an analysis of case studies relating to antidumping and countervailing duty cases against Indian exporters, after examining the scope for review of the relevant WTO rules under the ongoing Doha Round of multilateral negotiations.

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