ABSTRACT

The study investigates Anti-Dumping and Subsidies as Instruments for the Promotion of International Economic Transactions in Cameroon. The questions asked with regards to this study are; what constitute the concepts of dumping and subsidies in international economic law? What are the antidumping measures and subsidies that are designed to rectify the situation arising from dumping? What are the effects of antidumping and subsidies on the exporting and importing countries? What policy recommendations can be proposed for a level field in international economic transactions? The research is supported by the theory of absolute advantage; comparative cost and Global Strategic rival theory.We adopted the qualitative research methodology with the use of doctrinal method where information was collected via primary and secondary sources. The findings revealed that Dumping is in general a situation 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. Dumping enables consumers in the importing country to obtain access to goods at an affordable price. However, it can also destroy the level market of the importing country, which can result in layoffs and closure of business. We also found that, Universal international regulatory framework include: GATT (General Agreement on Tariffs and Trade) According to Article VI of GATT (General Agreement on Tariffs and Trade), every country can take actions to prevent domestic ‘injury’ from dumping action taken by other countries. The resultant policy implications from the findings were categorized based on the objectives of the study. From these implications, important policy recommendations which include; the need for review of rules relating to the determination of the rate applicable to exporters, the need for greater discipline in the flexibility available for cumulation of imports. Also, the need for review of the rules relating to the determination of the volume of dumped imports. Nevertheless, using the anti-dumping law enables countries to create ability to counter such actions targeted against them. External pressures such as import penetration and balance of payment deficits also exert considerable influence on the use of anti-dumping in these countries.

CHAPTER ONE

GENERAL INTRODUCTION

This chapter traces the background to the study, it states the problem, the research question (both main and specific questions) the objectives (both main and specific objectives). It further states the methodology adopted for this research, the justification for the research, the scope of the research and the significance of the study. It reviews the available and related literature, the theoretical framework, by examining the relevant theories in this area of study. It proceeds to defining terms within context and ends with a synopsis of the entire work.

• BACKGROUND OF THE STUDY

It is a truism that the world today has become a global and interdependent community so much that no particular nation can actually exist and survive as an island. This has been facilitated today by mass industrialization nations engage in. The industrialized nations produce much more goods than their national markets can comfortably consume and afford the industrialists the much needed revenue and profits they envisage. This makes nations now to look beyond their frontiers in order to identify additional markets for their goods abroad. This necessitates the exchange of goods and services within the context of international trade and international economic transactions, which of course leads to economic growth, brings in foreign revenue and boast the Gross Domestic Product (GDP) for the exporting country.

However, over the decades, international economic transactions or international trade has led to and facilitated an unfair economic concept of dumping. Dumping is a term used in the context of international trade. It is when a country or company exports a product at a price that is lower in the foreign importing market than the price in the exporter’s domestic market. This could be because countries unfairly subsidized products or companies have over produced and are now selling the products at reduced prices in other markets^[1] 

Dumping has a two-fold effect; first, as a positive effect, it enables consumers in the    importing country to obtain access to goods at an affordable price. However, negatively, it can also destroy the local market of the importing country, which can result in layoffs^[2] and the closure of businesses which would ignite another economic problem of unemployment in the importing country.

It is on the strength of the above negative effect that the concept of antidumping has been introduced to counter and salvage the effect of dumping on the importing country. Antidumping is a measure to rectify the situation arising out of the dumping of goods and its distortive effect.^[3]An antidumping duty is a protectionist tariff that a domestic government imposes on foreign imports that it believes are priced below fair market value.^[4] In the long-term, antidumping duties can reduce the international competition of domestic companies producing similar goods. Antidumping and countervailing duties are intended to offset the value of dumping and /or subsidization thereby leveling the playing field for domestic industries injured by such unfairly traded imports.

Where it is demonstrated that the dumped imports are causing injury to the importing country in this the meaning of the WTO Agreement on implementation of Article VI of the General Agreement on Tariffs and Trade 1994(Antidumping Agreement), pursuant to and by investigation under that Agreement, the importing country can impose antidumping measures to provide relief to domestic industries injured by imports.^[5] The country’s imposition of an antidumping duty is determined by the dumping margin-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. The country’s imposition of an antidumping duty is determined by the dumping margin-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.

When it is imposed to obtained a comparable domestic price because there are non or low volume sales in the ordinary course of trade in the domestic market, either prices to third countries or a “constructed” value is used in price comparison. A “constructed” value is the cost of production in the country of origin plus a reasonable amount for administrative, selling and general costs and for profits.

Similarly, when the export price is found to be unreliable, the price at which the product is first resold to independent buyers, or another price according to a reasonable basis determined by the authorities may be used in price comparison.

Because antidumping measures are an exception to the rule of most- favoured –nation treated, the utmost care must be taken in invoking them. However, unlike safeguard measures, which are also instruments for the protection of domestic industry, the implementation of antidumping measures does not require the government to provide offsetting concessions or consent to counter measures taken by the trading partners. This has increasingly led to the abuse of antidumping measures. For example, antidumping investigations are often commenced based on insufficient evidence, and antidumping duties may be retained long after the conditions for their levy have been eliminated. Some countries have applied antidumping measures in an arbitrary manner to restrict imports, rather than to achieve the limited, remedial objectives authorized in the Agreement.^[6] In light of this situation, one of the focal points of the Uruguay Round Negotiation^[7]was to establish discipline to reign in the abuse of antidumping restrictions. Although considerable progress was seen in this process, many countries still express much concern over this abuse.