Action against dumping can only be taken after an investigation has been held

Dear Editor,

A news item in the KN of November 12 headlined:

‘Importers need permit for pinewood from January 1,’ attracted my attention as former Minister of Foreign Trade.

According to Minister Trotman “We find there is some degree of dumping of this foreign lumber coming in. It is crowding out local loggers.”

Notwithstanding his apparent lack of acquaintance with trade language, the vagaries of international trade (WTO) rules as well as Chapter Five – Trade Policy of the Revised Treaty of Chaguaramas, Trotman was referring to the alleged “dumping” of Canadian white pine on the local market.

When Mr. Trotman states that his government will be imposing ‘restrictions’ on Canadian White Pine by way of import licences and that ‘the restriction is not a ban’ he is obviously out of his league.

Legally, the product is banned from entering the local market unless an import licence  is obtained from government. An import licence is in effect a technical barrier to trade.

It would serve Mr. Trotman well to refer to Article 2 of the WTO’s Agreement on Technical Barriers to Trade, the general principles for mandatory technical regulations and  the disciplines for introducing new regulations etc.

Incidentally, since we do not know whether the Canadian White Pine is being imported from within the region or extra-regionally, it is nevertheless important that Article 91, Part two of Chapter Five of CARICOM’s trade policy which treats expansively with Qualitative Restrictions albeit among CARICOM member states and the role of COTED be taken into consideration.

With respect to the claim of ‘dumping’ so loosely referred to by Mr. Trotman, WTO rules state very clearly that action against dumping can only be taken after an investigation has been held  following the prescribed procedure.

Moreover, for action to be taken against dumping Guyana in keeping with WTO rules  will have to determine that; (i) dumping exists, (ii) there is material injury or threat of material injury to its domestic industry (collectively called injury) and (iii) a causal link exists between the dumping and the injury.

Mr Trotman must know that a product is said to be dumped if its export price is less than its normal value. The amount by which the export price is lower than the normal value is called the ‘dumping margin.’

Therefore there are three elements involved in the determination of dumping:

(i) the determination of the export price, (ii) the determination of the normal value, and (iii) the comparison of the export price and the normal price.

In the final analysis, it appears that the Government of Guyana will be instituting quantitative restrictions on importation of a product which is not and cannot be  produced nor manufactured in Guyana and consequently, is not competing with locally produced white pine.

This brings into question the issue of competition.

In other words, the question is: is the imported Canadian White Pine competing with locally produced and manufactured Guyanese White Pine?

In the circumstances, CARICOM’s Competition Commission will have to be brought into the dispute but only if it is a dispute between CARICOM member states.

If however, it escalates to a dispute with two member states of the WTO that is an entirely different matter.

Yours faithfully,

Clement J. Rohee

Around the Web