Tariff Laws Review Day 10 – Trade Remedy Measures: Anti-Dumping & Subsidy

36 question-and-answer flashcards summarizing key concepts, legal bases, definitions, tests, and procedures for anti-dumping and countervailing measures discussed in Day 10 of the 2022 Tariff Laws Review.

What is the main purpose of an anti-dumping measure?

To protect domestic industries against unfair trade practice caused by dumping that results in material injury or threat thereof.

How is dumping defined under the lecture?

The export of a product at a price less than its normal value, amounting to price discrimination between two national markets.

Which CMTA section governs anti-dumping in the Philippines?

Section 711 of the CMTA (formerly Section 301 of the TCCP as amended by RA 8752).

Give two international agreements that provide the framework for Philippine anti-dumping rules.

GATT Article VI and the WTO Agreement on the Implementation of Article VI of GATT 1994.

What is a "like product" for anti-dumping purposes?

A product identical in all respects to the product under consideration, or in its absence, another product with characteristics closely resembling those of the product under investigation.

List three factors used to determine a like product.

Physical characteristics, manufacturing methods/technology, functions and use (other accepted factors include industry specification, pricing & distribution, and tariff classification).

Define "dumping margin."

The amount by which the normal value exceeds the export price of the product.

Give the formula for the dumping margin expressed as a percentage.

DM % = (Normal Value − Export Price) ÷ Export Price × 100 %

What constitutes the normal value (NV) of a product?

The foreign producer’s domestic selling price or comparable price of the like product in the ordinary course of trade in the exporting country.

State three acceptable forms of an export price (EP).

1) Price paid or selling price to an importer, 2) Ex-factory price at the point of sale for export, 3) FOB price at the point of shipment.

When may a constructed or deductive export price be used?

When the actual export price is unreliable; it is built from the domestic selling price minus post-export costs such as duties, taxes, expenses, and profit.

What is "material injury" in anti-dumping investigations?

Current injury, threat of injury, or material retardation in the establishment of a domestic industry caused by dumped imports.

Identify the two broad elements of the injury test.

1) Volume and price effects of dumped imports, 2) Consequent impact on domestic producers of the like product.

Explain price undercutting.

The dumped product is consistently sold at a price below the domestic selling price of the like product.

Explain price depression.

Domestic producers are forced to lower their selling prices to compete with dumped imports.

Explain price suppression.

Dumped imports prevent domestic producers from raising prices to cover production costs.

Give three examples of the consequent impact of dumped imports on domestic producers.

Actual or potential decline in sales, profit, market share, productivity, ROI, capacity utilization, or negative effects on cash flow, employment, and ability to raise capital.

List two key factors indicating a threat of material injury.

1) Significant expected increase of dumped imports, 2) Import prices so low that further importation is likely.

What evidence suggests material retardation of the establishment of a domestic industry?

Convincing proof of forthcoming establishment such as plant construction, machinery installation, manpower placement, or raw-material orders.

Define "causality" in an anti-dumping investigation.

The overall assessment that the injury to the domestic industry is directly caused by dumped imports.

Describe a provisional anti-dumping measure.

A cash deposit or bond equal to the provisionally estimated dumping margin, imposed after a preliminary affirmative determination and not sooner than 60 days from investigation start, lasting 4–6 months.

What is a price undertaking in anti-dumping cases?

An agreement by exporters to raise export prices up to their normal value to remove injury; proceedings may be suspended and the undertaking normally lasts up to 5 years.

State two features of a definitive (final) anti-dumping duty.

It may equal the full dumping margin or less if adequate, is permissive, and normally expires 5 years after imposition unless reviewed.

How is "domestic industry" defined for trade remedies?

Producers of the like product as a whole, or those whose collective output represents a major proportion of total domestic production.

Which CMTA section covers subsidies and countervailing measures?

Section 713 of the CMTA (formerly Section 302 of the TCCP as amended by RA 8751).

Give a concise definition of a subsidy.

Specific assistance, such as financial contribution or income/price support, provided by a government that confers a benefit on producers of an exported product.

What makes a subsidy "countervailable" or actionable?

It is specific, i.e., limited to certain enterprises, industries, or regions, and is neither a non-actionable "green" subsidy nor a prohibited "red" subsidy.

Provide two examples of non-actionable (green) subsidies.

1) Government assistance for research activities, 2) Aid to disadvantaged regions or to adapt facilities to new environmental requirements.

What are prohibited (red) subsidies under the WTO rules?

Subsidies contingent on export performance or on use of domestic over imported goods, e.g., export rebates, below-cost export credits, or tax exemptions on exports.

Who may file an anti-dumping or countervailing petition in the Philippines?

Any natural or juridical person representing a domestic industry, or the Secretary of DTI/DA under special circumstances.

What is the de minimis dumping margin that warrants termination of an investigation?

Less than 2 % of the export price for the respondent exporter.

State the negligible volume test for dumped imports.

Imports from a country account for less than 3 % of total imports of the like product, unless those below 3 % collectively exceed 7 %.

What is a sunset (expiry) review?

A review initiated around the 5th year to determine whether ending duties would likely lead to continuation or recurrence of dumping/subsidy and injury.

How soon after imposition may an interim review of anti-dumping or countervailing duties be requested?

At least one year after the duty was imposed.

What is a newcomer (new shipper) review?

An accelerated review to determine an individual dumping margin or subsidy rate for exporters who did not ship during the period of investigation and are unrelated to existing exporters.

Where can an aggrieved party appeal a final ruling on anti-dumping or countervailing duties?

The Court of Tax Appeals, within 30 days of receiving the final ruling.