DUMPING is selling goods at less than the normal price in the international market. Any individual producer or a nation may do it. It is usually done to drive away competitors from the market and secure a monopoly, or to hinder foreign competition.

Dumping disturbs those markets that receive dumped goods, and sometimes it may drive the producers out of business.

In Pakistan, the National Tariff Commission (NTC) is empowered to counter dumping and other unfair means adopted in import and sale of foreign goods. But the NTC has to be fully satisfied by the material evidence provided by a complainant seeking a positive outcome. . Proving the dumping: The following are essential conditions for proving dumping: (a)the complaint should contain enough evidence about any injury to the domestic industry (here injury means, injury to domestic industry based on the examination of the volume of dumped imports and its effect on the domestic prices); (b) causal link between the dumping and the injury which refers to a finding that material injury is suffered by the domestic industry as a result of the dumped product; (c) domestic producers expressly supporting the anti-dumping application must account for not less than 25 per cent of the total production of the similar article by the domestic industry.

The application is deemed to have been made by or on behalf of the domestic industry, if it is supported by those domestic producers whose collective output constitute more than 50 per cent of the total production of the like article produced by that portion of the domestic industry expressing either support for or opposition as the case may be, to the application.

This is to further clarify that a domestic industry, which seeks relief, should give sufficient evidence with respect to the above parameters. Unless the above parameters are satisfied, it will not be possible for the Authority to initiate an anti-dumping investigation.

Information: The application should be in written form and contain the following information: (a))the identity of the applicant; (b) description of dumped products; (c) information on prices at which the product in question is sold; (d) information on the evolution of the volume of the dumped imports.

Stages: (a) The application is scrutinized to ensure that it is fully documented and provides sufficient evidence for initiating an investigation. If the evidence is not adequate, a letter is issued. Unless the deficiencies are rectified, the application will not be taken up for any action.

(b) The designated Authority determines that the application has been made by or on behalf of the domestic industry, and the accuracy of the evidence. The initiation notice will be issued normally within five days from the date of receipt of a properly documented application.

(c) The Authority provides access to the non-confidential evidence presented to it by various interested parties in the form of a public file, which is available for inspection to all interested parties on request after receipt of the responses.

(d) The designated Authority will proceed expeditiously with the conduct of the investigation and shall, in appropriate cases, make a preliminary finding containing the detailed information on the main reasons behind the determination. The preliminary finding will normally be made within 60-70 days from the date of initiation.

(e) A provisional duty not exceeding the margin of dumping may be imposed by the central government on the basis of the preliminary finding recorded by the Authority. It can be imposed only after the expiry of 60 days from the date of initiation of investigation and will remain in force only for a period not exceeding six months, extendable to nine months under certain circumstances.

(f)Interested parties participating in the investigations can request the Authority for an opportunity to present the relevant information orally. However, such oral information shall be taken into consideration only when it is subsequently reproduced in writing.

(g) Based on these submissions and evidence gathered during the investigation and verification thereof, the Authority will determine the basis of its final findings. However, the designated Authority will inform all interested parties of the essential facts, which from the basis for its decision before the final finding is made.

(f) Interested parties submit their response regarding disclosures and the final position of the Authority taken therein. The Authority examines these final submissions of the parties and comes out with findings.

Normal time allowed by the statute for conclusion of investigation and submission of final findings is one year from the date of initiation of the investigation and in no case more than 18 months.

Cases: Six cases have been submitted to the National Tariff Commission against dumping of different products by different countries. Among those four have been decided whereas two cases are in preliminary stages respectively.

Sorbitol: In this case, Habib Arkady (Pvt.) Ltd. lodged an application against two producers/exporters — M/s Roquette Freres from France and M/s P.T Sorini Corporation from Indonesia on January 30, 2003. National Tariff Commission initiated an investigation on March 6, 2003 concerning the alleged dumping of Sorbitol (a chemical compound) produced in the Republic of Indonesia and Republic of France. The Commission had made a preliminary determination in this case and a provisional anti-dumping duty was levied for four months with effect from July 19, 2003.

PVC RESIN: In this case, the NTR received an application on June 11,2004 from Engro Asahi Chemicals & Polimers (PVT) Ltd against LG International Corporation, the Republic of Korea and Iran Petrochemical Company for alleged dumping of PVC Resin (suspension grade). The Commission initiated an investigation on June 25, 2004. The Commission was satisfied that the product has been imported at dumped prices, which caused material injury to domestic industry. In order to prevent this material injury, the Commission decided to impose a provisional anti-dumping duty.

If domestic industry needs relief against dumping, provisional measures are taken. The concerned authorities may impose provisional duties. Anti-dumping legislation was first passed in 1940 by Canada. In the United States various tariff acts have been passed to deal with different types of dumping. In particular the 1921 Emergency Tariff Act imposed special duties on goods imported for sale at less than their fair value or cost of production. It was amended by Custom Simplification Act of 1954. The General Agreement on Tariff and Trade (GATT) prohibits dumping and provides for increase in import duties to combat unfair trade the practices.