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Anti-dumping on TOFA: Hopping a country too far?

Trade Reports

Anti-dumping on TOFA: Hopping a country too far?

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The circumvention of anti-dumping duties has given rise to significant discussion on the topic in the World Trade Organisation. At present the WTO Anti-Dumping Agreement does not contain any anti-circumvention provisions and it is up to each country to regulate the use thereof. South Africa’s Anti-Dumping Regulations provide for several different forms of anti-circumvention, including country hopping, i.e. where an importer switches supply from a producer in one country to a related producer in a third country as a result of the imposition of preliminary or definitive anti-dumping duties or the initiation of an investigation against the exporter in the first country. This is not recognised as circumvention by any other country.

As regards country hopping South Africa’s Regulations provide that the domestic industry does not have to update the injury information submitted in the anti-circumvention application, provided the application is lodged within one year after publication of the final determination in the original investigation, despite this information typically being at least two to three years old at that stage. It also provides that dumping may be determined on the basis of the normal value established in the original country, despite the fact that such information is significantly outdated and cannot be compared to an export price for the same period and despite the provision being in contravention of the definition of normal value in both the Anti-Dumping Agreement and the International Trade Administration Act. On the other hand, it is clear that if it has already been shown that injurious dumping is taking place and the source of the imports simply switch to a related party in a third country, dumping from the new source will perpetuate the injury. It is therefore necessary to act against dumped imports as quickly as possible to remedy the continuing injury.

Should the fact that it has already been shown that the domestic industry is suffering material injury as a result of the dumping be reason enough to violate the Anti-Dumping Agreement to ensure swift protection for the domestic industry where such injury is continuing or recurring as a result of the anti-dumping duties being circumvented through country hopping? Can the switch to a new, albeit related, supplier in a third country be regarded as circumvention of the anti-dumping duty or should it be regarded as a new investigation?

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