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International Trends in antidumping. Antidumping initiations, 1995-2004(note: only first 6 months of 2004). Why is anti-dumping an increasing problem for Vietnam?. Vietnam becoming significant and fast-growing player in some world markets (seafood; footwear; garments; cash crops)Failure of DOHA round and trend to bilateral trade agreements
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1. Anti-Dumping: A Growing Problem(last advice for business and government!) Presentation by
Dr. Adam McCarty
for Ministry of Trade
anti-dumping workshop. The purpose of this presentation is a last chance by this project to emphasise the urgency of preparing for A-D cases. It is for Vietnamese officials and, more importantly, business associations and large enterprises in at risk industries. The purpose of this presentation is a last chance by this project to emphasise the urgency of preparing for A-D cases. It is for Vietnamese officials and, more importantly, business associations and large enterprises in at risk industries.
2. International Trends in antidumping The global trend over the past ten years has been fairly stable. Actually, slight global increase in recent years.The global trend over the past ten years has been fairly stable. Actually, slight global increase in recent years.
3. Increase HAS happened for Vietnam now total is about 14 cases. Biggest: catfish; shrimps; footwear.Increase HAS happened for Vietnam now total is about 14 cases. Biggest: catfish; shrimps; footwear.
4. Why is anti-dumping an increasing problem for Vietnam? Vietnam becoming significant and fast-growing player in some world markets (seafood; footwear; garments; cash crops)
Failure of DOHA round and trend to bilateral trade agreements
Spillover effects (positive and negative) from trade disputes involving China.
5. Anti-Dumping
What do do? = worry, learn, prepare.
Understand:
That free trade is not so free;
That NTBs are part of normal trade relations;
That anti-dumping is NOT the job of Government;
That you need to prepare for trade disputes.
6. So do you dump? But we do not export below
cost of production
This does NOT mean you will escape being accused of dumping!
The irrational logic of anti-dumping (and other NTBs) needs to be understood.
7. What NOT to do: Not try; because we never win
Not prepare before it happens; because it wont happen to us
Not take actions when you know it is happening: The questionnaire has not arrived
Not understand the financial costs and benefits of running a defence
Not complain about it being unfair: It is.
8. It is unfair, but what makes no economic sense makes political sense:
Despite this fair trade face, the antidumping proceeding always has been and is increasingly a protectionist device, as various Congresses have amended the underlying statute to make the proceeding and remedy more effective. (K.W.Dam 2001: 148)
9. Anti-dumping is narrow politically-motivated protectionism that causes winners and losers.
Industries: some win, some lose
Consumers: always lose
BOTH countries can lose!
10. The winners and losers
11. Catfish winners and losers
12. Catfish: What did the USA win? Increased sales of Louisiana catfish farmers [+]
Increased tax revenues [+]
But other industries suffered (fish food exports, importers) [-]
And consumers pay more for the same: same effect as a tax on consumers (most as subsidy to USA production) [-] Overall the USA loses!!Overall the USA loses!!
13. If the US as a whole can lose Why do it? = narrow industry protection: politics
The argument other countries do it is NOT an economic argument Other countries did and still do central planning.Other countries did and still do central planning.
14. So policy for who? What should be the policy objective for Government?
Protect and promote industry?
Minimise taxation of consumers?
15. Answer: Both: National Welfare Maximisation
Protecting a declining industry from international competition delays structural change for high immediate costs (normally to your consumers).
16. The Ministry of Trade therefore must remain OBJECTIVE in evaluating applications for industry groups to:
determine the prima-face case for material injury;
To include the real costs to Vietnamese consumers in the evaluation;
decide if it is a declining industry
17. How?
MoT needs to develop a careful methodology for evaluating industry applications that uses a cost-benefit approach from a national welfare perspective.
18. Vietnam: The trend A rising number of antidumping cases against Vietnam.
The need for specialised Government officials and private sector legal and economic expertise to cope with the challenge.
19. Vietnam: Defending = plan ahead We can forecast industries at risk of AD actions and plan defences (but deep lack of pro-active businesses and business associations)
Develop integrated pre-researched defence strategies (questionnaires, NM economy)
Keep pressure on removal of non-market status.
20.
Thank you.
Adam McCarty
Chief Economist
Mekong Economics Ltd.
adam@hn.vnn.vn