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香港assignment
如今,国际和地区经济的一体化是全球化的背景下的一个主导趋势。近年来，按照越南共产党的一贯政策, ,越南刺激了其一体化进程，并且发展了与其他国家的双边和多边经济关系。到目前为止,越南与约70个国家和地区建立了关系,与国际金融机构关系正常化，如世界银行 (WB)、国际货币基金组织(IMF),亚洲开发银行(ADB),等等,成为了东南亚国家联盟(东盟)的成员,参与亚洲-欧洲会议(ASEM);加入亚太经济合作组织(APEC);尤其是在2007年11月1日,越南正式成为世贸组织第150个成员国。
世贸组织是世界上最大的贸易机构，占世界贸易的97%以上。越南加入WTO意味着将需要修改其政策和法律，来遵守世贸组织的规定和协议,有必要逐步降低关税和非关税壁垒。因此,对倾销问题的处理将会增多并需要仔细地考虑。作为世贸组织的成员,越南将融入全球的“游乐场”,其他成员会使用反倾销措施作为贸易保护主义的工具来保护其国内产业。
Regional and international economic integration and globalization
Nowadays, regional and international economic integration is a dominant trend in the context of globalization. Pursuant to the Vietnamese Communist Party’s consistent policy, in recent years, Vietnam has stimulated its integration process and developed the bilateral and multilateral economic relations with other countries. Up to now, the country has established relations with about 70 nations and territories; normalized relations with the international financial institutions such as World Bank (WB), International Monetary Fund (IMF), Asian Development Bank (ADB), etc.; become a member of Association of Southeast Asian Nations (ASEAN); participated in Asia – Europe Meeting (ASEM); joined Asia – Pacific Economic Cooperation (APEC); and especially on November 1, 2007, Vietnam has officially become WTO’s 150th member.
WTO is the biggest trade body in the world accounting for over 97% of world trade. Joining WTO means that Vietnam will have to amend its policies and laws in order to comply with WTO regulations and agreements of which it is necessary to progressively reduce tariff and non-tariff barriers. Thus, the problem dealing with dumping will be raised and need to be considered carefully. As a member of WTO, Vietnam will integrate into global “playground” where other members have been using antidumping measures as protectionist tools to protect their domestic industries. In that case, it is essential for Vietnam to start to impose antidumping measures on dumped imports into Vietnam in order to protect domestic industries and national market, and to create a level playing field for either domestic or foreign manufacturers.
In recent years, there have been more and more antidumping cases in both developed and developing countries. Vietnam is a developing country that has exported many goods to other countries. According to the statistics of WTO, between 1995 and 2008, Vietnam has been faced 23 antidumping cases. For example, the US has initiated antidumping investigations against Vietnamese catfish and shrimp, EU has initiated antidumping investigations against Vietnamese gas lighter, bicycles, etc. In comparison, Vietnam has not initiated any antidumping investigation although some specialists said that many goods originating from China, South Korea, Thailand and the US could have been dumped into Vietnam.
On April 29, 2004, the Standing Committee of Vietnam's National Assembly has passed Ordinance No. 20/2004/PL-UBTVQH, concerning the Dumping of Imported Goods into Vietnam (the Antidumping Ordinance). This is the main legal text on antidumping of Vietnam. The Antidumping Ordinance has laid a legal foundation for the application of antidumping measures. However, it is not a simple matter to enforce antidumping law. It is found that many goods with extremely low price are imported into Vietnam but the authorities still can not initiate an antidumping investigation because of the lack of evidence. Besides, antidumping investigation is a complicated process. The expenses for an investigation are huge. Thus, many factors need to be considered before Vietnamese firms can take legal action against dumped imports. If Vietnam does not consider carefully each factor, it can lead to wrong conclusions. Then relations between Vietnam and other countries could be affected badly. Vietnam may even face with a lawsuit in the Dispute Settlement Body (i.e. the body of WTO makes decisions on trade disputes) that has negative impacts on Vietnam’s prestige in the world market.
OBJECTIVES AND RELEVANCE OF THE RESEARCH
The study compares Vietnam antidumping law with WTO antidumping law that contributes to specify some main points of dumping and antidumping law; and then find out the problems arising from the application of Vietnam antidumping law, thereof come up with some recommendations to improve the antidumping law and to increase its enforcement as well.
Studying WTO antidumping law and Vietnam antidumping law in depth and in detail plays an important part in the protection of national benefits and active international economic integration.
First, studying WTO antidumping law and Vietnam antidumping law will help the Vietnam authorities have good sense of direction and amendment to improve the antidumping law in conformity with WTO antidumping law when Vietnam has become a member of this organization. As stated in paragraph 253 of the Report of the Working Party on the Accession of Vietnam, “The representative of Viet Nam confirmed that his Government would ensure that any legislation in place at the time of accession providing for the application of measures taken for (…) antidumping (…) purposes would be in conformity with the provisions of the WTO Agreements (…) on Antidumping (…).”
Second, studying WTO antidumping law and Vietnam antidumping law will help the Vietnam authorities develop the antidumping law, thereby increase antidumping law enforcement to protect domestic industries and national market effectively and to create a healthy competitive environment for both domestic and foreign manufacturers. Simultaneously, it can also help Vietnam reduce the possibility of being taken to the Dispute Settlement Body when imposing antidumping measures.
Third, studying WTO antidumping law and Vietnam antidumping law intensively permits the Vietnamese enterprises and Government to actively file and pursue antidumping lawsuits.
CHAPTER II: REVIEW OF THE LITERATURE
2.1. DEFINITION OF DUMPING
In Vietnam, the general meaning of dumping is an act “of selling goods at prices lower than the market prices in order to compete, control the market” [1] . The Vietnamese online dictionary dated 18 March 2004 of the Vietnam lexicography centre has defined dumping as “selling massive goods at prices lower than the market prices, even at losses, in order to increase competitiveness and control the market”. Likewise, the definition of dumping here only has the comparison between the prices of selling goods and the market prices in the same market.
However, in international trade, the concept of dumping has a long history. Dumping is defined variously and central to all these definitions is the concept of price discrimination in different markets. The classic work of Jacob Viner named “Dumping: A Problem in International Trade” (Chicago, 1923) was the starting point for economists and dumping trade issue. In his book, Viner noted the statement by Alexander Halmilton, US Secretary of the Treasury in 1791, warning about foreign country practices of underselling competitors in other countries. Other instances of allegations of dumping by British manufacturers into the new American market were reported, and public discussion on this problem as well as various legislative attempts to deal with it were reported during most of the nineteenth century. Viner also reported that during the early twentieth century dumping was most widespread by firms in Germany and first defined dumping as “price discrimination between national markets” [2] . In international trade, dumping is said to “… occur when a company sells goods abroad at prices lower than the prices charged for the same or similar goods in that company’s domestic market” [3] . According to the legal definition in Article VI, General Agreement on Tariffs and Trade (GATT) 1994 and Article 2.1, Antidumping Agreement (ADA), a product is considered as being dumped when its export price is less than its normal value, that is less than the sale of a like product in the domestic market in the ordinary course of trade. The definition is widely applied by countries around the world. In the US, dumping was changed from less than the normal value into Less Than Fair Value (LTFV). Fair value is defined as the price in the home market of the exporter [4] . A product is said to be dumped if its export price is less than fair value and that caused material injury to the US domestic industry. In EU, regarding the Council Regulation (European Community) No 384/96 of 22 December 1995 on protection against dumped imports from non-EU countries, a product is to be considered as being dumped if “its export price to the Community is less than a comparable price for the like product, in the ordinary course of trade, as established for the exporting country” [5] .#p#分页标题#e#
Nowadays, Vietnam has joined the WTO and the definition of dumping has been changed in order to comply with WTO regulations, particularly with Article VI, GATT 1994 and Article 2.1, ADA. According to Article 3, Ordinance on Dumping of imported goods into Vietnam dated 29 April 2004, “Goods originating from a country or territory shall be deemed to be dumped when they are imported into Vietnam if such goods are sold at a price lower than the normal price”.
2.2. DUMPING CLASSIFICATION
There are many ways to classify dumping. Regarding the definitions of dumping above, it appears that dumping can be divided into two types: domestic dumping and international dumping. Domestic dumping takes place in national market, whereas international dumping is price discrimination in different markets.
Jacob Viner (1923) identified three types of dumping according to motive and to continuity: sporadic dumping, short-run or intermittent dumping and long-term or continuous dumping. In the case of sporadic dumping, the motivation is to dispose of goods for a short-run to get rid of surplus shock and is unintentional. Short-run or intermittent dumping is not continuous and is motivated by entering a new market, retaining the market share or driving away the competitors from the market. Long-term or continuous dumping is motivated by the intention to reach or maintain full production in large scale economies [6] .
At the time of the negotiations leading to the Havana Charter for an International Trade Organization, participants identified four categories of dumping:
- Price Dumping: is based on the concept that the exporter sells goods abroad at a lower price than in the domestic market, and that this may have an injurious effect on industry in the importing country producing similar goods [7] . The price dumping is close to the legal definition of Article VI, General Agreement on Tariffs and Trade (GATT) 1994: “products of one country are introduced into another country at less than the normal value of the products”.
- Service Dumping: results from the use of subsidized or discriminatory pricing arrangements in the provision of shipping services [8] . The resulting freight at less than cost is thought to give the exporter an advantage that may be reflected in the landed price of the product. The product itself may have been landed at normal value, but the freight reduction could still lead to a charge of dumping. This concept of service dumping is limited in shipping services and is not reflected in the current antidumping rules.
- Exchange Dumping: based on manipulation of the exchange rate to give exporters an advantage in the importing market: i.e. to achieve a competitive edge [9] . Unlike service dumping, exchange dumping does not affect directly pricing mechanism in the importing country, but it does change the exchange rate of the currencies in the exporting and importing country that can also lead to a charge of dumping. However, no rules were established to deal with this practice.
- Social Dumping: assumed to occur when goods produced by prison or sweated labor are exported at very low prices [10] . It was found that the term “social dumping” has been used for products allegedly produced and exported under conditions that do not reflect standards, other than technical ones, prevailing in the developed economies. Using prison or sweated labor means the exporters can cut wage and do not need to invest much in the working conditions. That will help them lower their costs to set a more competitive price. Today, no rules were drafted for this type of alleged dumping, and it is not an accepted trade policy concept. Therefore, some developed countries such as the US, France, etc. are applying human rights principles in dealing with goods produced by prison or sweated labor.
In recent years, the international trade activities have grown rapidly and become more and more complicated. Some activities apparently do not reflect dumping, but have the same impacts as dumping on the importing countries. They are called sub-categories of dumping. For the trade policy community today, beside the categories of dumping above, the main sub-categories of dumping are:
- Hidden Dumping: defined in an addendum to GATT Article VI as “the sale by an importer at a price below that corresponding to the price invoiced by an exporter with whom the importer is associated, and also below the price in the exporting country”. It means that a firm exports goods at ostensibly market prices to a related firm, but in reality at a lower cost. The second firm then sells the goods in the importing country at about that price, but in the transaction has all the time been below market price. Hence, the goods in the importing country seemingly are not sold at dumped price though they are traded at lower price. This sub-category of dumping is achieved through transfer pricing.
- Indirect Dumping: usually occurs when a product is imported via a third country where it would not be considered as having been dumped [11] . An allegation of indirect dumping would claim that the article causing injury was first exported from country A to country B where it would not be considered as having been dumped, then from country B to country C. Therefore, it is hard to determine dumping as well as apply antidumping measures. The exporter considered as the one selling dumped goods is not the exporter in country A but the exporter in country B because the exporting country is different from the originating country.
- Secondary Dumping: is the export of a product which incorporates components that have been landed at dumped price [12] . For example, the frame of a bicycle may have been imported by a firm in the exporting country at less than market price. Because of this, the firm enjoys a price advantage. The injury impact of secondary dumping is difficult to substantiate.
2.3. PURPOSE OF DUMPING
With respect to the core idea (price discrimination between national markets – export sales at prices lower than home market sales), the international trading community for more than a century has treated dumping as an unfair international trade practice. This is because of the main purposes of dumping.
According to Viner (1923), the purpose of dumping is closely related to the act of “predatory behavior” or “predation”. He argued that authority may be needed to protect domestic consumers against predatory dumping. In predatory dumping, a foreign firm intends to sell a product at low price, even at a loss in order to drive away the domestic competitors then establishes a monopoly and subsequently increases the price and profits. As a result, domestic consumers’ benefit will be lost.
However, economists, including Jacob Viner in his classic work also tend to be skeptical of the predation argument. They doubt that the chances for success of the predation are very good. It is maintained that it is inconceivable for a firm to suffer losses over a long period of time and that as for predatory dumping a firm must establish a global monopoly, which too is difficult to conceive will happen in most industries (Hoekman & Leidy, 1989). Jackson (1997) showed that if a number of firms are producing for a market, they would need to collude to raise prices later. They would also need to keep out potential new producers, and if prices go up this can be very difficult to do. Therefore, dumping mostly occurs because foreign firms want to increase their competitiveness in order to break into that market or to gain more market shares.
Besides the intentional or deliberate dumping above, sometimes foreign manufacturers dumped simply in order to get rid of excess production. Because of unexpected circumstances like economic crisis, excess supply, long-time inventory, etc. the manufacturers must bargain away to recover their capital.
Competition is the way firms behave in the market place and how they respond to the actions of other suppliers and consumers [13] . Competition between firms based on price and quality is healthy competition. In healthy competition, there would be no impediments to the operation of the price or market system. Instead of studying to improve the existing technology, enterprise management, etc. to raise quality and set a more competitive price, the foreign firm has used dumping as a competitive instrument. That is unhealthy competition. They intentionally sell a product at lower price, even at a loss [14] in order to drive away the domestic competitors. Moreover, the core idea of dumping is “price discrimination between national markets”. Whether the manufacturers dumped in order to “predate”, to increase their competitiveness or simply to recover their capital, dumping has interfered with or distorted free market economic principles that dedicate to fair price and competition in multilateral trading system. There seems to be a notion that sales at different prices to different persons are somehow unfair (Jackson, 1997). Pursuant to WTO regulations and many national laws, antidumping duties can be imposed regardless of the reasons why the exporters dumped.
2.4. IMPACT OF DUMPING
The definition of dumping shows that the greatest impact of dumping is material injury to the producers of the like product in particular and to the importing country in general.#p#分页标题#e#
Dumping directly affects the domestic producers in importing country. When dumping occurs, the producers of the like product may have to reduce their prices equivalent to the dumped prices so as to compete with the foreign manufacturers. Since the domestic producers must decrease their prices equal to the dumped prices, the producers of the like product will suffer a loss. The reason is these new prices can be lower than their costs. On the contrary, if the domestic producers do not lower their prices, they are not able to compete with the foreign firms. Then, they will go to deadlock and go into bankruptcy.
The domestic producers suffer a loss or go into bankruptcy having negative influences on the importing country. In case of dumping, the producers of the like products lose their market and profit. Consequently, it will be a threat to the importing country because the comparative advantage of each country is changeable and the competition in the world market is more and more fierce. In addition, when an industry is threatened and more producers go bankrupt, the unemployment rate will increase and other related industries will also be affected.
The flow of cheap imports may have bad effects on firms that produce like domestically products. Yet, it also has positive impacts on the economy. For instance, domestic consumers will enjoy the lower price of the imports. They can pay less but still have the same quality product. Moreover, providing that the dumped goods are the inputs of another industry, this industry can take advantage of the lower price of the input to encourage its growth. Lower prices can also be the driving force to the domestic industry. The domestic industry will have to improve its current technology, enterprise management, etc. to compete with foreign firms. Therefore, not all the acts of dumping are condemned and imposed antidumping duty. According to the WTO regulations, antidumping measures can only be applied when dumping “causes or threatens material injury to an established industry in the territory of a contracting party or materially retards the establishment of a domestic industry” [15] .
Source: Ch?ng bán phá giá - m?t trái c?a t? do hoá th??ng m?i.
It is supposed that before imports are sold in the importing country, the market equilibrium occurs at the point E, where the price is P1; there, the quantity demanded equals quantity supplied, equals Q1. When the imports are sold at lower price P2, the quantity demanded increases from Q1 to Q2, whereas the quantity supplied (i.e. the quantity that the domestic producers produce) decreases from Q1 to Q2’. The domestic producers can only supply the quantity P2’ at the price P2. So the importing quantity is (Q2 - Q2’). Figure 1 showed that consumer surplus or buyers’ surplus increases and equals to the surface of the trapezium ABFE. Meanwhile, the domestic producers’ surplus decreases and equals to the surface of the trapezium ABCE. The whole society will benefit from the surface of the triangle CFE. Because of this, all the domestic producers of the like product condemn dumping as “unfair trade” and ask their government to apply antidumping measures.
2.5. ANTIDUMPING DUTY
Pursuant to Provision 1 Article 2 of Antidumping Ordinance dated 29 April 2004, “antidumping duty means an additional import duty applicable to goods which are dumped and imported into Vietnam causing, or threatening to cause, significant loss to a domestic manufacturing industry”. In international trade, when the imports are deemed to be dumped, they can be imposed antidumping measures such as antidumping duties, security – by cash deposit or bond, price undertakings. In fact, antidumping duty is the most popular measure. Antidumping duty provides protection beyond the protection afforded by the customs duty. The country's imposition of an antidumping duty is determined by the dumping margin, i.e. the difference between the export price and the domestic selling price in the exporting country. By adding dumping margin to export price, the dumped price can be rendered a "fair" trade price.
Antidumping duties in particular and antidumping measures in general are exceptions of most – favoured – nation (MFN), a principle of GATT [16] . Under the MFN, countries can not normally discriminate between their trading partners. It means that every time a country grants another country a special favour such as a lower customs duty rate for one of their products, it has to do so for the same products from all other WTO members – whether rich or poor, weak or strong. Nevertheless, under Article VI in GATT, the importing country may unilaterally increase its tariff on a product that is exported at a price that is under the “normal value” of the product (the product is then considered to be dumped) if the export of the dumped product causes substantial injury to the domestic industry in the importing country without demands for compensation, renegotiation or consultations with the country affected. Article 2.b of GATT stated:
2. Nothing in this Article shall prevent any contracting party from imposing at any time on the importation of any product:
b) any anti-dumping or countervailing duty applied consistently with the provisions of Article VI;
When the authority levies antidumping duty on the dumped product, the product will be imposed a much higher duty rate than the similar product imported from other countries. That provides relief for the injured domestic producers. Prusa (1999) found that antidumping duties are now on average 10 to 20 times higher than the most favoured nation (MFN) level, with some of them exceeding the average MFN level more than 100 times. According to the Congressional Budget Office based on the GATT/WTO data, the countries with the highest average rates are Mexico (103.7 percent), Venezuela (greater than 100 percent), Colombia (62.1 percent), the United States (56.8 percent), and Peru (48.7 percent). These antidumping duty rates are high enough to be significant impediments to trade.
Traditionally, anti-dumping measures have mainly been used by rich developed countries. The “traditional users” include the US, EU, Australia and Canada [17] . However, it is the developing countries that have been responsible for most of the increase in the use of anti-dumping measures since 1995. New major users are India, Argentina, Brazil, Mexico and South Africa, i.e. countries from the categories of “high human development” and “medium human development” [18] . Yet, companies in developing countries are subject to higher antidumping duties than companies in developed countries. A study of US practice shows that the average antidumping duties during the period 1989-1998 against developed countries (excluding Japan) were around 34 percent, while the comparable antidumping duties for low-income developing countries were 66 percent [19] . The reason is that the various methods permitted by the ADA to calculate the normal value of a product. Studies show that the largest margin of dumping is obtained when constructed normal values are used that are based on companies’ production costs. This is partly due to the fact that the agreement allows that the normal value is determined as the production cost plus reasonable profit, and that the “reasonable profit” is assessed to be that in developed countries. This permission has special consequences on developing countries, particularly because developing countries are not regarded as a market economy. The US also typically imposes higher antidumping duties on goods imported from non market economies than on those from market economies. The mean and median initial duty rates it imposed on goods from non market economies between July 1, 1979, and December 31, 1995, were 76 percent and 119 percent higher, respectively, than the rates for goods from market economies (CBO, 1998).
Vietnam is an example. Since Vietnam is not regarded as a market economy in the antidumping context, the production costs of a Vietnamese company are not representative for the calculation of normal value. In situations of this type, the ADA permits the developed countries like the US to calculate the normal value based on the price of the same type of product in a third country. In the case of Vietnamese catfish, the US Department of Commerce used Bangladesh as the third country. This action is clearly problematic because the cost of raw materials and publicly regulated charges in Bangladesh are different from those in Vietnam. Then, Vietnamese catfish, finally, was determined as dumping and has been imposed antidumping duty equivalent to the dumping margins of 37 to 64 percent [20] .
2.6. ANTIDUMPING LAW AND PROTECTION
Since dumping is considered as unfair, antidumping law has been enacted in order to prevent dumping. The antidumping law originated first in Canada in 1904. A novel measure in the form of antidumping duty was invented which was designed to satisfy manufacturers who desired higher customs duties and farmers whose interests lay in lower duties. Canada was followed by New Zealand (1905), Australia (1906), South Africa (1914) and the US (1916). Today, more than 40 countries have enacted antidumping legislation [21] . It appears that antidumping law is the law that regulates antidumping measures; procedures and contents of an investigation in order to apply such measures, the applicability of such measures to goods which are dumped, and procedures related to dispute settlement. The basic purpose of antidumping law is to maintain fair pricing of imports from abroad, thereby level the playing field between foreign and domestic manufacturers. More specifically, antidumping law pursues two main goals: to protect domestic industry and to maintain healthy competition and fair trade.#p#分页标题#e#
The first purpose of antidumping law is to protect domestic industry from unhealthy competition of foreign products. As mentioned above, dumping can seriously injure the manufacturers of the like product in the importing country. The domestic producers may suffer loss or even go bankrupt, which has harmful effects on the importing country: unemployment rate will increase and other related industries will also be influenced. Hence, it is necessary to impose a law to control dumping to protect domestic producers and importing country as well.
Maintenance of healthy competition and fair trade is another purpose of antidumping law. Fair trade is one of the principles which are the foundations of the trading system. Any actions or practices violate this principle should be condemned and prevented. Dumping is considered as unhealthy competition that has interfered with and distorted the principle. So, it has to be inhibited. Antidumping law has been enacted partly due to the response of importing countries to offset the effects of the unfair actions and perhaps go further to eliminate such actions in the future to level the playing field between domestic and foreign firms. In the modern world, trading activities have developed quickly and become more and more complex. Therefore, the principle of fair trade should be emphasized than ever before.
Although the basic purpose of antidumping law is to maintain fair trade between nations, antidumping law has become a well-known protectionist tool. Recently, many multilateral agreements have been created. That is to say, both tariff (taxes on traded goods) and non-tariff barriers are progressively reduced. In this way, countries use antidumping laws as a substitute for these forms of protection. One study shows that as many as 90 percent of all antidumping measures cannot be justified by stating that competition is being protected (Willig, 1998). The economic literature is largely unanimous that the actual use of antidumping measures has little connection with maintaining competition but is rather used as a means of protectionism (Finger and Zlate, 2003). As a consequence, antidumping law, a substitute for other forms of protection, has constituted a great impediment to trade.
After all, the problem for the policy-makers is how to enforce antidumping law properly. Antidumping law can offset material injury caused by dumping to the domestic industry, thereby level the playing field between foreign and domestic manufacturers. On the contrary, if the domestic industry is excessively protected from international competition, it will become a hindrance to the development of this industry and the importing country as well. Competition is a driving force of growth in free trade. International competition will stimulate creativity, increase labor productivity and lower price. Inadequate protection can lead to production stagnation. The producers become passive and heavily dependent on the government. Thus, consumers must buy low-quality and even obsolete products. Studies from the US show that welfare costs resulting from antidumping measures are higher than the advantages that protection possibly gives (Kelly and Morkre, 2002).
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