New anti-dumping methodology of dumping determinations in the case of cost distortions

What is it about?

Anti-dumping is a fair trade mechanism of protecting domestic industries from certain underpriced imports. In December 2017, the European Union made a remarkable amendment to its anti-dumping legislation to shift from a long-standing practice of specific dumping calculations for a pre-defined list of non-market economies to a ‘country-neutral’ approach of targeting significant market distortions. The new methodology requires the European Commission to use only prices and costs not influenced by substantial government interventions and to take account of some social and environmental dimensions in the anti-dumping process. Although the new methodology formally differs from the previous one, it is largely the same in addressing severe price distortions and being capable of inflating anti-dumping duties for affected products. In this article, we discuss major changes introduced by the 2017 amendment. While we agree with the earlier scholarly conclusions that the 2017 amendment is likely to fail to meet the World Trade Organization’s legal standards, we nevertheless justify the embedded anti-distortion policy as a reasonable way of making trade fairer and suggest taking proactive actions at the global level to render the new dumping methodology internationally acceptable.

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Why is it important?

The EU's new cost adjustment methodology provides new ways of countering market distortions through higher anti-dumping duties

Perspectives