Anti Dumping Duty on Purified Terephthalic Acid (PTA)

• 30 Jul 2019

The Finance Ministry of India has imposed definitive anti-dumping duty on all imports of purified terephthalic acid (PTA) from South Korea and Thailand.

Meaning and Purpose of Anti Dumping Measures

• Dumping is said to occur when the goods are exported by a country to another country at a price lower than the price it normally charges in its own home market.
• This is an unfair trade practice which can have a distortive effect on international trade.
• Anti-dumping is a measure to rectify the situation arising out of the dumping of goods and its trade distortive effect.
• The purpose of anti-dumping duty is to rectify the trade distortive effect of dumping and re-establish fair trade.
• The use of anti-dumping measure as an instrument of fair competition is permitted by the WTO.
• In fact, anti-dumping is an instrument for ensuring fair trade and is not a measure of protection per se for the domestic industry. It provides relief to the domestic industry against the injury caused by dumping.

• PTA is the primary raw material in the manufacture of polyester chips, which in turn are used in a number of applications in textile, packaging, furnishings, consumer goods, resins and coatings.
• The latest action comes in less than a month after the Designated Authority in the Commerce Ministry came up with its final findings on the sunset review.

Sunset Review

• A Sunset review/ expiry review is an evaluation of the need for the continued existence of a program or an agency. It allows for an assessment of the effectiveness and performance of the program or agency.
• An anti-dumping duty is valid for a period of five years from the date of imposition unless revoked earlier.
• It can be extended for a further period of five years through a sunset or expiry review investigation conducted in accordance with Article 11.3 of the World Trade Organisation (WTO) Anti-dumping Agreement.
• Such a review can be initiated suo moto or on the basis of a duly substantiated request received from or on behalf of the domestic industry.

Institutional Arrangement in India for Anti Dumping Measures

• Anti dumping and anti subsidies & countervailing measures in India are administered by the Directorate General of Anti dumping and Allied Duties (DGAD) functioning in the Department of Commerce in the Ministry of Commerce and Industry and the same is headed by the "Designated Authority".
• The Designated Authority’s function, however, is only to conduct the anti-dumping & countervailing duty investigation and make recommendation to the Government for the imposition of anti-dumping or anti-subsidy measures.
• Such duty is finally imposed by a Notification of the Ministry of Finance. Thus, while the Department of Commerce recommends the anti-dumping duty, it is the Ministry of Finance, which levies such duty.

Source: BL