GATT procedures unlikely to succeed in lifting antidumping

GATT procedures unlikely to succeed in lifting antidumping
actions

JAKARTA (JP): The GATT (General Agreement on Tariffs and
Trade) dispute settlement process is unlikely to provide
discipline against the increasing number of antidumping
restrictions against imports, a noted economist says.

Michael Finger, a leading economist on trade policy from the
World Bank, told a meeting at the Center for Strategic and
International Studies (CSIS) here on Monday said that
antidumping, which he defined as a preferred means of restricting
imports through certain protectionist measures, has shown a sharp
increase within the last five years.

Dumping laws were originally created to prevent a foreign
company from selling their product below cost, "dumping" their
product on a market, in an effort to shut down local,
competitors.

"Only one case was challenged as illegal within the first 40
years of the GATT but within the period of 1985 to 1992, more
than 1,000 antidumping cases have occurred," he said when he
presented the findings of his studies on antidumping contained in
his book entitled Antidumping: How It Works and Who Gets Hurt.

"Through the early 1960's, GATT member countries undertook
fewer than a dozen antidumping actions per year. However, by the
latter half of the 1970's, the U.S. alone averaged 35 cases per
year and now the frequency across all GATT member countries is
more than 200 per year," Finger said.

He said the country with the highest number of antidumping
initiations between 1985 and 1992 were the U.S., Australia,
Mexico, the European Community (EC) and Canada.

Misuse

Based on his studies, Finger concluded that several conditions
have resulted in the increased, and apparent, misuse of
antidumping measures.

This includes the fact that national regulations allow
antidumping action that the investigation process itself tends to
curb imports.

"Apart from that, almost half of antidumping actions are
superseded by negotiated export restrictions before they come to
a formal, legal ending," he said.

Finger explained that if a GATT member country accuses another
member country of violating legal GATT regulations, the "victim"
may present the evidence and request for consultation from GATT.

"Either one may bring the dispute to a three-member panel of
GATT, which can conclude whether or not the action is a violation
of the GATT rules," he said.

He added that recommendations from the panel can then be
reported to the GATT membership, which will decide whether or not
to object to the case.

"The panel's reports have so far never reached the level of a
GATT decision, thus none of the antidumping actions have
successfully been lifted," he said.

However, since 1989, 15 national antidumping actions have
become the subject of GATT dispute settlement procedures. "The
appointed panels have completed the findings and recommendations
of five of these," Finger explained.

According to him, antidumping investigations included inquiry
on the existence of dumping actions, injuries -- in which
domestic products were displaced by unreasonably priced imports
-- and a reasonable causal link between the facts and the
dumping.

"The measures also include the comparison between home market
and export prices and between export prices and estimate of
costs. To measure injury, the indicators include domestic output,
employment, profits and capacity utilization," Finger explained.

Counterparts

Mari Pangestu, a noted economist from CSIS, told reporters
that the key to avoid antidumping measures in developing
countries was to seek as many counterparts as possible.

"Mr. Finger seems very pessimistic that GATT can settle these
disputes. And with the signing of the Uruguay Round, the number
of antidumping measures are likely to increase," she said.

She said it was unrealistic to think that developing countries
could ever win against large economies like the U.S. and the EC.

"The U.S., for example, can initiate an antidumping action
only by providing evidence that domestic producers suffer from
imports," she said.

Thus, she said, since the procedures to file against and to
defend oneself from antidumping were very expensive and time-
consuming, the countries accused of dumping should instead seek
public support overseas.

"If we find the right public support -- who in this case are
consumers or users of our product -- who can claim that they will
suffer if they do not receive our product, the implementation of
an antidumping measure can be prevented," she said. (10)