In a recent move, the Finance Ministry of India has taken a firm stance against unfair trade practices. The ministry has decided to impose an anti-dumping duty on all imports of purified terephthalic acid (PTA) coming from South Korea and Thailand.
Understanding the Concept of Dumping and Anti-dumping Measures
In the realm of international trade, dumping is a term that refers to a scenario wherein a country exports goods to another country at a price which is lower than what it charges in its own domestic market. This unfair trade practice can cause distortion effects on international trade.
As a response to this, countries adopt anti-dumping measures to rectify these distortive effects and restore fair trade practices. These measures are not meant for protecting the domestic industry per se, but rather an instrument to ensure fair trade. The World Trade Organization (WTO) also permits the use of these anti-dumping measures.
Significance of Purified Terephthalic Acid (PTA)
PTA is a primary raw material utilized in manufacturing polyester chips. These chips find applications in various sectors like textiles, packaging, consumer goods, furnishings, resins, and coatings. Therefore, the imposition of an anti-dumping duty on PTA is a significant move.
Sunset Review and its Role
A Sunset review, also known as the expiry review, is an assessment of the need for continuation of a program or agency. This review enables the evaluation of the effectiveness and performance of a program or agency.
An anti-dumping duty remains valid for five years from its date of imposition, and can be extended for another five years via a sunset or expiry review investigation. This review is in accordance with Article 11.3 of WTO’s Anti-dumping Agreement.
| Anti-Dumping Measure | Validity Period | Possible Extension |
|---|---|---|
| Anti-dumping Duty | 5 years | Can be extended for another 5 years via a sunset, expiry review investigation |
The Institutional Arrangement in India for Anti-Dumping Measures
In India, the Directorate General of Anti-dumping and Allied Duties (DGAD) is responsible for administering anti-dumping, countervailing measures, and anti-subsidies. Functioning under the Department of Commerce in the Ministry of Commerce and Industry, the DGAD is led by the “Designated Authority”.
However, the Designated Authority’s role is confined to conducting investigations on anti-dumping & countervailing duty and making recommendations to the government for the imposition of such duties. The final imposition comes from the Ministry of Finance through a notification. While the recommendation of the anti-dumping duty is the responsibility of the Department of Commerce, the final levy of the duty lies with the Ministry of Finance.