Antidumping body still has much to do<\/p>\n
By Erry Bundjamin<\/p>\n
JAKARTA (JP): The issue of dumping goods has received a great
\ndeal of attention in Indonesia recently. As such, it is
\nnecessary, in order to avoid confusion, to familiarize people
\nwith the minimum essential procedural and technical requirements
\nthe Indonesian Anti-Dumping Committee (KADI) must comply with in
\ninvestigating the dumping of imports.<\/p>\n
Investigating alleged dumping according to the Anti-Dumping
\nAgreement of the World Trade Organization (WTO) is not an easy
\ntask. KADI must act impartially and in a manner determined both
\nby the agreement and Indonesian antidumping legislation.<\/p>\n
The WTO agreement and Indonesian legislation do not
\nnecessarily conform to one another, but if the provisions in the
\nlegislation are less favorable than those in the agreement, they
\nwould probably be challenged by the exporting countries under the
\nWTO dispute settlement mechanism.<\/p>\n
Article 5.2 of the WTO agreement stipulates that an
\ninvestigation can only be initiated if the investigating
\nauthorities have prima facie evidence of dumping prices, injury
\nand causality.<\/p>\n
Article 5.4 provides that a petition must be lodged on behalf
\nof the domestic industry harmed by the dumping. Also, the total
\noutput of the domestic industry supporting the petition must be
\nmore than 50 percent of the total production of the like product
\nmade by that portion of the domestic industry expressing either
\nsupport or opposition to the petition.<\/p>\n
But no investigation shall be initiated when producers
\nsupporting the petition account for less than 25 percent of total
\nproduction of the like product made by the domestic industry.<\/p>\n
The national legislation says very clearly the output of
\nproducers who are also importers of the product in question will
\nnot be taken into account in the calculations.<\/p>\n
These substantive procedural requirements must be met before
\nan investigation starts. In the United States, in antidumping
\ncases on cement, for instance, the government proposed remedying
\nsubstantive procedural issues after initiation, but this was
\nrejected on the grounds that substantive procedural issues were
\nonly relevant before the investigation began.<\/p>\n
The panel of the General Agreement on Trade and Tariffs
\n(GATT), therefore, recommended the U.S. government terminate the
\nantidumping duties.<\/p>\n
Clear details of the product under investigation and the scope
\nto be covered in the investigation must be given in the petition,
\nto enable a fair determination of both dumping and injury. The
\nterm \"like product\" itself is not well defined in either the WTO
\nagreement or in the national legislation.<\/p>\n
In the WTO Anti-Dumping Agreement the term basically refers to
\na comparison between one product and another to examine whether
\nthey are identical and\/or closely resemble one another.<\/p>\n
In practice, however, the assessment is based on physical
\ncharacteristics and uses, interchangeability, customer and
\nproducer perceptions of the product, manufacturing facilities and
\nproduction processes.<\/p>\n
In several GATT\/WTO panel rulings, the term \"like product\" has
\nbeen narrowly interpreted. Failure to define like products
\ncorrectly in an investigation would certainly lead to the
\nexporting country challenging any decision made by the
\ninvestigating authorities.<\/p>\n
In the absence of evidence such as dumping prices, injury and
\ncausality -- factors which should be meticulously assessed
\nthroughout the investigation -- no antidumping duties can be
\nimposed.<\/p>\n
In many cases a dumping margin can easily be found. In the
\ncurrent prolonged economic crisis, injury may not be difficult to
\nfind. However, injury must be attributable to imports. Thus,
\ninvestigators must examine \"any known\" factors causing the
\ninjury. Injury would not be attributable to imports in a
\nsituation where, for example, the domestic producers were found
\nto be inefficient, unintegrated, mismanaged and so forth.<\/p>\n
In Europe, a cost and benefits analysis has been embodied in
\nits antidumping regulation: even if the above three factors have
\nbeen proved in the investigation, antidumping duties will not be
\nimposed if the European Commission finds that their imposition
\nwould not be in the community's interests.<\/p>\n
This happened in the unbleached cotton fabric case involving
\nthe Indonesian textile industry. Given the characteristics of
\nIndonesian industries, it is highly advisable that the Anti-
\nDumping Committee also give due consideration to a cost and
\nbenefit analysis in their investigations.<\/p>\n
KADI cannot avoid dealing with sophisticated legal, political
\nand economic factors. KADI certainly realizes that although the
\nmain objective of an investigation probably is to protect local
\nproducers, it is nevertheless imperative that it be impartial,
\nobjective and precise in the investigation to comply with the WTO
\nagreement and national legislation. This would avoid any
\nchallenges from users or exporting countries.<\/p>\n
Meanwhile, industries should be able to compete by improving
\ntheir efficiency. Wasting time on frivolous cases with no firm
\nlegal basis detracts industries from the very objective of
\nantidumping actions and can be counterproductive in the long run.<\/p>\n
Except in one case, no decision in an Indonesian antidumping
\ninvestigation has ever been challenged, which can be credited to
\nKADI. But with the increasing use of antidumping petitions much
\nremains to be done.<\/p>\n
The writer is a lawyer at the Jakarta-based Bundjamin and
\nPartners law firm. He specializes in international trade and has
\ndefended clients in antidumping proceedings.<\/p>",
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