Anti-dumping duty agreement is a legal framework meant to prevent international trade from becoming unfair. The agreement helps to protect local industries and ensures that foreign manufacturers do not use unfair trade practices to compete against local manufacturers. In this article, we will discuss the anti-dumping duty agreement, its objectives, and how it works.
What is the Anti-dumping duty agreement?
Anti-dumping duty agreement is an international agreement that governs the use of anti-dumping measures by member countries. The agreement was established by the World Trade Organization (WTO) in 1995 and is aimed at preventing the unfair competition by foreign manufacturers. Dumping refers to the practice of selling goods in another country at a price that is lower than the normal value of similar goods in the domestic market. Anti-dumping duty is a tariff that is imposed on such imported goods to level the playing field and protect domestic industries.
Objectives of the Anti-dumping duty agreement
The anti-dumping duty agreement has several objectives, including:
1. To prevent foreign manufacturers from flooding the domestic market with goods at prices lower than the normal value.
2. To protect domestic industries from the unfair competition posed by dumped goods.
3. To ensure that anti-dumping measures are not misused or abused to restrict trade.
How does the Anti-dumping duty agreement work?
When a domestic industry feels that it is being unfairly competed against by dumped goods, it can file a complaint with its government. The government then initiates an investigation into the matter to determine whether the goods are being dumped and if it is causing material injury to the domestic industry.
If the investigation reveals that dumping is taking place and it is causing material injury to the domestic industry, the government can impose an anti-dumping duty on the imported goods. The duty is set at a level that will offset the difference between the export price and the normal value.
Conclusion
The Anti-dumping duty agreement is an essential legal framework that ensures fair competition in international trade. The agreement helps to protect domestic industries from the unfair competition posed by dumped goods. It also ensures that anti-dumping measures are not misused or abused to restrict trade. By imposing anti-dumping duty on imported goods, the agreement helps to level the playing field and protect local industries. As such, it is crucial for countries to adhere to the provisions of the anti-dumping duty agreement to ensure that international trade is fair and balanced.