As a first step, it is appropriate to provide some clarification on the issue of dumping, because sometimes the complaints in this regard lack any real basis and are made by national companies that only seek to maintain a privileged position in the market.
Let us begin by considering that dumping occurs when goods are introduced into customs territory at a price lower than their value in the country of origin.
However it does It is necessary to analyze the elements that make up the concept to arrive at the determination of causality that the same rule expresses. (General Agreement on Tariffs Customs officers – Law 24.425 and regulatory decrees) namely:
a) Export Price: This is made up of the price of the product paid or payable as a result of a sale and related to the introduction of said product into our customs territory. These prices must be compared at the same commercial level, taking into consideration the tax treatment, the exchange rate regime, the differences in quality, packaging and also what is related to guarantees and technical assistance.
b) Normal Value of the Product: with the above we arrive at the value, but only if it is merchandise with the same characteristics as the imported one, otherwise we would be comparing apples with oranges. And also, we must consider a third element given by normal commercial operations.
c) Normal Commercial Operations: these operations have some characteristics related to sales, since if sales are made whose prices are affected by corporate relations between the selling and buying company, said price cannot be taken into consideration because it is a transfer price, different from other independent buyers. And if the sales were made at a price below production costs, whether variable or fixed, the causal relationship of the expected damage could not be considered as an essential requirement for determining dumping.
The value reconstruction method must also be taken into account, for which the price must be taken on the basis of production costs, marketing and administration expenses, with a normal profit for the activity.
The mere concept of dumping is not sufficient for the application of measures against the importation of a certain product, since a direct causal relationship between the imported product and national production is required.
Under the Anti-Dumping Agreement and the Agreement on Subsidies and Countervailing Measures, not all damage is sufficient; there must necessarily be a direct causal relationship and not a mere suspicion or conjecture, sometimes unfounded.
For this reason, it is necessary to arrive at a determination of the damage. But it turns out that None of the factors indicating damage taken in isolation, nor several of them together, are sufficient to determine damage without a reasonable doubt. It is essential that there be a direct causal relationship between the reported practice and the direct damage to the national industry; otherwise, this foreign trade tool would only be a means to convert a free domestic market into a captive one.
The classic approach to dumping shows that there must be a maneuver carried out by a company with monopoly power; that is, that its activity has the direct intention of destroying a market in order to take over it. In addition, in order to determine the damage, some other elements must be taken into account, such as: 1) internal prices; 2) real and potential decrease in sales; 3) stocks; 4) production volume; 5) employment; 6) wages, 7) negative effects on cash flow; 8) use of installed capacity; 9) profits; 10) return on investments; 11) investment; 12) capacity to raise capital; 13) growth; 14) productivity; 15) market share; 16) dumping margin; (As Guillermo Feldman points out in Foreign Trade Management – Chapter 11 – The role of trade defense instruments – Ed Edicon).
In accordance with the above, There must be a determining causal link between the objected imports and the damage reported, in order to be able to analyze whether the national production branch of similar merchandise presents any other factor causing the damage, other than the one alleged as an unfair practice.
On the other hand, and not being a minor issue, it is important to combine all this with the timeframes in the processes in administrative offices, since their indefinite situation over time causes harm to those under investigation and to the complainants, since both parties expect to obtain a prompt response.
Most doctrine has already considered that international treaties referring to reasonable time limits in legal proceedings are applicable to those that are substantiated both in judicial and administrative proceedings.
It is to be hoped then that these processes will not remain in an indefinite pending state, because constitutional rights and guarantees are at stake.
By: Guillermo J. Sueldo. Lawyer specializing in International Trade.
Aduana News is the first Argentine customs newspaper to launch its digital version. With 20 years of experience, its publications and initiatives aim to provide the most relevant knowledge on customs issues in order to contribute to safe trade in the region.
