The Importance of Strictly Enforcing Antidumping Laws

Article excerpt

Particularly in light of Russia's recent problems, the focus in the United States is usually upon such high-profile issues as arms control and political machinations in Moscow.

Within Russia, however, more attention is paid to economic issues. In particular, antidumping laws - a little known international trade issue - have become a top priority of Russian trade negotiators. As obscure as it may sound, the issue deserves the attention of US policymakers, as well, because antidumping laws have a profound effect on the handling of new trade cases involving Russian steel.

Antidumping laws impose duties on imported products that are sold at less than the price in their home market, or less than their cost of production. Determining the appropriate standard for judging dumping in trade with Non-Market Economies (NMEs) raises difficult concepts. As US trade officials determined in the mid 1970s, the short answer to these questions is that normal concepts of "price" and "cost" cannot be applied to Russia and similar economies. The approach settled upon was to select market economies at a similar level of development to use as surrogate markets to determine a reasonable estimate of the cost of production in NME economies.

Initially, the NME antidumping procedures were employed in only a few isolated cases, such as one involving Polish-made golf carts. But with the emergence of China and Russia as trading powers, NME procedures were made law and came into frequent use.

Partly as a result of their increased use, NME antidumping laws have often come under harsh criticism. Critics argue that the laws ignore the economic reforms implemented in Russia, China, and other former communist countries, as well as being simple protectionism. …