The Indian government has within one year imposed anti-dumping duties on several Bangladeshi products. These include three types of jute products and Hydrogen Peroxide. Fishing net is also targeted; the Directorate General of Anti-Dumping Duty and Allied Duties (DGAD) under the Indian commerce ministry has completed its investigation in this regard.
The jute goods facing anti-dumping duties in India include: jute yarn/twine, hessian and sacking bags. The Indian authority has imposed anti-dumping duties ranging from $19 to $352 per tonne on these products of 255 Bangladeshi jute mills and exporters. Only two of the jute mills that exported goods to India, don't face any such duty.
The anti-dumping duty on jute goods, a major exportable item of Bangladesh, is a matter of serious concern.
Following the imposition of anti-dumping duties, country's exporters sought government intervention. The government assured them that it would take up the matter with the Indian authorities. In the last commerce-secretary level talks held in Dhaka last month, Bangladesh side raised the issue with its Indian counterpart. However, there was no move forward.
In fact, this is essentially a legal matter and there is hardly any room to take up such issues at a bilateral official forum. Once legal procedure gets started, nothing can be done until it is completed.
Meanwhile, a newspaper has reported that the government is thinking to take the matter to the dispute settlement body (DSB) of the World Trade Organisation (WTO). The jute ministry has been reported to have requested the commerce ministry to resort to WTO mechanism.
According to the WTO rules, if a company exports a product at a price lower than the price it normally charges in its home market, the company is said to be 'dumping' the product. In other words, it is a case of international price discrimination, where the price of a product, when sold in the importing country, is less than the price of that product in the market of the exporting country. WTO agreement on anti-dumping allows governments to act against dumping where there is genuine 'material' injury to the competing domestic industry. Anti-dumping duty is thus a duty much higher than a regular customs duty.
Indian is well equipped to deal with anti-dumping measures. It has dealt with many anti-dumping cases with many countries, especially China. In Bangladesh, the designated body to deal with the subject is Bangladesh Tariff Commission. While dealing with the subject, active cooperation of the private sector is critical to establish the merit of a case. Tariff Commission or the government alone can't fight anti-dumping measures.
Bangladesh had successfully dealt with Indian anti-dumping action against lead-acid battery more than a decade ago. It is still the only case in the WTO, where a smaller economy dragged a big and powerful economy to the DSB. The dispute, however, got resolved at the very early stage as India unilaterally scraped the anti-dumping duty it imposed on lead acid battery.
More than a decade later, the situation has changed a lot. Bangladesh economy is not as small as it was then. Its global competitiveness has increased. The annual volume of export is increasing. Global trade regime has also become more challenging and complex. So, it is not very surprising to face trade-restrictive measures - taken lawfully or otherwise. India's imposition of anti-dumping duties needs to be viewed from this perspective.
When India initiated the anti-dumping investigation on jute goods imported from Bangladesh in October 2015, Bangladeshi producers and exporters, most of them small, found it difficult to deal with the situation. That is why, only 26 producers and exporters submitted written response to the questionnaire sent by the Indian anti-dumping authority. Of them, 12 mills were taken as samples for onsite verification by the Indians. The onsite verification took place during August 2016. After completing all procedures, the DGAD recommended anti-dumping duties on jute goods. Later, the Indian finance ministry imposed the duties. A few exporters, however, moved for appeal. The verdict went against them.
Now, moving the DSB is a big decision. It will be a legal fight between two countries, not the companies. Thus there has to be exhaustive homework before finally deciding on the matter. Both the private sector and the government have to be convinced that there are strong merits of the case to defend our position.
As a Least Developed Country (LDC), Bangladesh is still eligible to avail support of the Advisory Centre on WTO Law in Geneva with only 10 per cent of the cost. This support is very much crucial to prepare the documents seeking redress in the WTO. At the first stage, Bangladesh has to invite India for consultation through the dispute settlement body. If two parties could agree to mutually resolve the dispute, then there will be no need to proceed further.
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