Anti-dumping action
Anti-dumping action
The manner in which Indonesian footwear companies are coping
with the anti-dumping action initiated by the European Union (EU)
shows the ignorance of many businessmen regarding the Geneva-
based World Trade Organization's rules. Such ignorance could cost
Indonesia a great deal in the form of lost export markets caused
by anti-dumping measures by importing countries.
Anton J. Supit, the vice chairman of the Indonesian Footwear
Association, recounted on Friday how several companies refused to
meet an anti-dumping investigation from the EU on the misbelief
that evading investigations would protect them from dumping
charges. Many footwear companies refused to receive the
investigation team because their accounting reports did not
conform with generally-accepted principles.
The business community should fully realize that as they
become increasingly significant players in the international
market their business practices will come under tougher scrutiny
by competitors. Indonesia's competitors, especially those in
major importing countries, will resort to anti-dumping measures
to protect their markets. But this does not mean that importing
countries can impose any measures they like because they must
follow the rules and procedures set by the WTO. But Indonesian
businessmen could become easy victims of dumping accusations if
they do not fully comprehend the rules and act accordingly to
prevent anti-dumping charges.
Ignorance and inability to understand and implement the rules
could make Indonesia lose on two fronts: Businessmen could lose
markets overseas due to anti-dumping duties; they could also have
their domestic market shares eroded by foreign products dumped in
Indonesia. Over the last six years alone, 37 Indonesian export
goods have been subject to anti-dumping charges filed by 10
importing countries. However, subsequent investigations have not
found enough evidence to introduce anti-dumping measures on 13 of
the commodities. But 16 others were later subject to counter-
veiling duties, while the charges on the eight other goods are
still under investigation.
The most effective and efficient way to cope with anti-dumping
problems is to take preventive measures because once anti-dumping
charges are filed, even though they may later prove to be false,
they cost the charged companies a lot because they must reply to
questionnaires, meet investigation teams or even hire lawyers in
later proceedings. Hiring lawyers, regardless of their
international reputation, is much more expensive than maintaining
practices to prevent anti-dumping charges.
The best preventive measure calls for businessmen to
understand and implement Article VI of the 1994 General Agreement
on Tariffs and Trade (GATT) on anti-dumping and countervailing
duties to eliminate any opportunity for importing countries to
lodge anti-dumping charges. One of the most important measures is
for companies to keep well-documented accounts of costs, invoices
and other related records because anti-dumping measures can be
taken only if the export price is below its normal value in the
domestic market and only if the exports cause injury to a
domestic industry in the importing country.
The GATT article is so elaborate on the rulings and procedures
for initiating anti-dumping charges, investigations and actions
that it would be very difficult for countries to abuse anti-
dumping actions for disguised protectionism against import
competition. The WTO's clear-cut procedures also set conditions
for ensuring that all interested parties, including consumers,
are given an opportunity to present evidence to defend their
respective positions.
It is, we think, high time for trade associations and the
industry and trade ministry to make concerted efforts to help
companies understand the WTO rulings and procedures on anti-
dumping and implement them in their business practices. It is
also their duty to keep the Indonesian ambassador to the WTO
apprised of Indonesian market shares in various countries because
it is dramatic market gains that usually prompt importing
countries to initiate anti-dumping cases.