1

Trade remedies as barriers: Implication for SAARC countries

Abhijit Das

Senior Trade Officer

UNCTAD India Programme

Organised by Teri, 3 May, 2006

UNCTAD

2

Who are the users of trade remedies in SAARC ?

• India is the user of trade remedies in SAARC• It imposed anti-dumping duty on 3 products from SAARC countries

Product Country Date of initiation Imposition of final duty

Acrylic yarn Nepal 3 January 2001 2 July 2002

Lead acid batteries

Bangladesh 12 January 2001 7 December 2001

Zinc Oxide Nepal 19 March 2001 18 March 2002

3

Impact of anti-dumping duty acrylic yarn imports from Nepal

Total Acrylic yarn imports from Nepal

Year 2000-2001 2001-2002 2002-2003 2003-2004 2004-2005

Import from Nepal in US$ Million

24.62 29.26 18.46 24.17 28.43

Total Import of commodity

145.24 191.24 226.94 220.92 287.51

%Share of Nepal

16.95 15.3 8.13 10.94 9.88

4

Impact of anti-dumping duty Lead acid batteries imports from

BangladeshYear 2000-2001 2001-2002 2002-2003 2003-2004 2004-2005

Import from B’desh in US$ Million

0.25 0.52 0.12 0.15 0.16

Total Import

of commo

dity

34.22 35.36 39.46 44.63 68.43

%Share of B’desh

0.73 1.48 0.30 0.35 0.2

5

Impact of anti-dumping duty on Zinc Oxide imports from Nepal

Year 2000-2001 2001-2002 2002-2003 2003-2004 2004-2005

Import from Nepal in US$ Million

2.34 2.36 0.80 0.24  

Total Import of commodity

6.23 3.95 2.13 1.54 1.74

%Share of Nepal

37.50 59.64 37.72 15.29  

6

Anti-Dumping measures as trade barriers

• Trade chilling effect of initiation of anti-dumping investigation

• Significant reduction in absolute value of imports and import share

• Message is clear- initiation of anti-dumping investigation and imposition of duties can be significant barriers to trade

7

Anti-Dumping: LDCs provision in SAFTA

• Give special regard to the situation of the Least Developed Contracting States when considering the application of anti-dumping and/or countervailing measures

• Provide an opportunity to Least Developed Contracting States for consultations

• Shall, to the extent practical, favourably consider accepting price undertakings

8

SAFTA LDCs provision: Is it beneficial

• LDCs provision is an improvement on Art. 15 of the ADA

• Possibility of country-to-country consultations• Although non-mandatory in nature, favourable

consideration of price undertakings would be a positive step

• Whether SAARC LDCs are able to benefit from these provisions will depend on their level of preparation

9

Consultations: What preparations required

• Basic data on imports of the product under investigation – IBIS may be a useful source

• Did the petition contain adequate information justifying initiation of the investigation – on dumping, injury and causality

• Has the analysis of the 15 injury factors been done in accordance with the requirements of ADA?

• Documentation of why the investigation is flawed

10

Are non-LDCs without any remedy?

• As an interested party, govt. of the exporting country has a full opportunity for the defence of its interests throughout an anti-dumping investigation.

• Preparation similar to that suggested for LDCs applicable.

• Investigating authorities are mandatorily required to take due account of any difficulties experienced by interested parties in supplying information requested- need to effectively use this provision

11

SAFTA Safeguard provisions

• SAFTA safeguards can be imposed only on products subject to a concession under SAFTA

• SAFTA does not preclude SAARC countries from resorting to global safeguards under WTO.

• Requirement of investigation for imposition of SAFTA safeguards – investigation procedure to be consistent with requirements under Art XIX and Agreement on Safeguards

12

SAFTA Safeguards : How are these different from global safeguards

• SAFTA safeguards limited to products covered by concessions under SAFTA

• Maximum duration of application of SAFTA safeguards is 3 years as against 8/10 years under Agreement on Safeguards

• SAFTA has 5%/ 15% LDC exception as against 3%/ 9% developing country exception for global safeguards

13

SAFTA Safeguards: Ambiguities

• Can global safeguards and SAFTA safeguards be applied simultaneously on the same product

• What should be the period for determining the 5%/ 15% import share for LDC exception

• Can SAFTA safeguard measures be in a form other than temporary suspension of tariff concessions

14

Conclusions

• Although anti-dumping duties have acted as trade barriers in SAARC, effective utilisation of ADA/ SAFTA provisions could help redress some of the underlying problems.

• While SAFTA safeguard provisions may be LDC friendly, need for addressing ambiguities.

15

THANK YOU