The Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade of 1994 of the WTO (Anti-Dumping Agreement), incorporated into Argentine legislation by Law 24.425, authorizes the governments of member countries to adopt anti-dumping measures against certain unfair practices in international trade. Thus, in our country, regulatory decree No. 1393/08 and complementary regulations establish a specific procedure for the development of investigations, granting interested parties ample opportunity to participate in them and present evidence in defense of their interests. This, together with the best available information in each administrative file, will serve as a basis for issuing determinations at each stage of the procedure.
For the application of this type of measures - which seek to reestablish fair competition conditions between imports from specific countries (imported product) and goods produced in Argentina (similar national product) - it is a necessary condition that the competent authorities determine within the framework of the investigations, three assumptions:
1.- The existence of dumping.
2.- Damage to the national production branch.
3.- A causal relationship between both extremes.
However, beyond the technical aspects, one must not lose sight of the discretionary power exercised by the Enforcement Authority to establish measures imposing antidumping duties, even when the requirements set out above have been met. This is because the authorities will weigh these decisions in light of the public interest and/or other circumstances related to foreign trade, assessing issues of merit, opportunity and convenience.
Indeed, if a measure such as those under consideration is imposed for a particular product, it could lead to changes in the conditions of the domestic market and affect other actors in the value chain, users of the product in question and/or end consumers.
If definitive anti-dumping duties are applicable, with a term of validity of up to five years from their imposition - with the possibility of extension within the framework of the review of the measure -, the figure of the "Price Commitments"as a suitable means - if the factual and legal conditions are met - and as an alternative, to end an investigation.
The offer of a price commitment by an exporter is voluntary.
The Enforcement Authority of the importing country may reject it if the terms of the offer are not realistic or pragmatic. Notwithstanding the above, the Authority may also suggest price undertakings to exporters within the framework of an investigation, without such offer being mandatory for acceptance. In short, no presumption is generated against an exporter who does not offer or does not accept the invitation to offer them.
Among the conditions required by the Antidumping Agreement for the offer of an undertaking, art. 8.2, is that a preliminary positive determination of the existence of dumping, injury and causal relationship has been made.
In this case, it is of utmost importance to bring up the Article 23 of Decree No. 1393/08 which allows the investigation to continue until the final stage, without applying measures if there are no elements that “allowed to issue a positive opinion…Therefore, when the preliminary determination falls within the framework of an investigation and is framed within this article, the possibility of offering price commitments is prohibited.
In considering the viability of price undertakings, the Agreement itself highlights the convenience of applying the “lesser duty” rule to the dumping margin, if that level is sufficient to eliminate the damage caused to the domestic industry.
Now, what is that level?
The level sufficient to eliminate the damage is a FOB value lower than the Normal Value, which, when nationalized to the commercial level, at which it competes with the similar national product, equals it to an undamaged price of the industry.
This brings us to another question,At what level of competition is the committed price nationalized??
This is the level at which the imported product displaces its national counterpart, as observed in the development of the investigation. This may be the nationalized value up to the importer's warehouse, or the sale price at the wholesale or retail level, as the case may be.
Thus, the undamaged price of the industry is the one at which it is estimated, with the available information, that the similar national product would be marketed in the absence of the unfair competition investigated.
Finally, it should be noted that if a final negative determination is made on the existence of dumping, injury or causal link, the previously offered undertaking will be automatically extinguished.
If price undertakings are accepted, anti-dumping duties would not be applied to imports of the product covered by the undertaking, as long as the undertaking remains in force. For this reason, the regulations themselves authorize the authority of the importing member to request periodic information to assess its permanence over time. Undertakings may be revoked if the authorities of the importing country determine that there has been some non-compliance. In such a case, in principle, anti-dumping duties would be applied again.
As a corollary to the above, the central idea is reinforced that price commitments are an alternative, suitable and flexible means of ending an antidumping investigation. They promote fair and loyal trade between countries, are based on voluntary cooperation, and allow for a favorable development of national and foreign productive capacities.
Lawyer from the University of Buenos Aires (UBA). Specialization in State Law - Treasury Attorney of the Nation. Manager of Commercial Standards and Instructions of the National Commission of Foreign Trade (CNCE), a decentralized body within the Ministry of Economy. Professor of the Bachelor's Degree in International Trade, the Diploma in Customs Law and the Postgraduate Specialization in Global Business at CAECE University.
