the convergence of national anti-dumping legislation among asean countries

THE CONVERGENCE OF NATIONAL ANTI-DUMPING LEGISLATIONAMONG ASEAN COUNTRIES

CHAPTER I

INTRODUCTION

A. Background of the Study

Since the 1990s, the Philippines has been opening up its economy more and more

to international trade, as seen in the joining of various bilateral, regional trade agree-

ments, not to mention the World Trade Organization (WTO) and in the increase in the

value of imports and exports to and from the Philippines which have increased four-fold

since 1992. However, international trade is not without risks, thus some countries may

choose to set up some non-tariff barriers to remedy unequal trading. Indeed it is noted

that several developing countries recently erected anti-dumping and other contingent

protection regimes, the Philippines and several of its Asian neighbors being included in a

group known as the "new users of anti-dumping" (Nakagawa, 2007; Das, 2005).

Another effect of increased economic integration is the "convergence" of policies

across countries. The theory of policy convergence works on the assumption that policy

regimes are rarely contiguous across countries. Policy convergence can be seen as an end

in itself as it facilitates trade between countries by providing similar rules and standards

across countries which reduce transaction costs and save time. Policy convergence is not

just seen as an end, it can also be seen as a process wherein there is "the tendency of

policies to grow more alike, in the form of increasing similarity in structures, processes,

and performances" (Drezner, 2001). So, policy convergence may be the result of the

conscious policy of governments acting in coordination with other governments to solve

common problems or; it may also occur as a result of an effort to cope with competitive

pressures emerging from international economic integration, in this case convergence

takes the form of a race to the bottom (Holzinger, Knill and Sommerer, 2008).

Convergence theory has received its share of criticism. Much of the criticism on

The Convergence of National Anti-Dumping Legislation Among ASEAN Countries 1

policy convergence studies are that they suffer from a deficit of empirical findings which

is partly a result of a heterogeneous and inconsistent theoretical literature (Knill, 2005).

Furthermore, much of the recent literature uses cross-country regressions in order to test

for the causes of convergence which the present author believes diminishes the usefulness

policy convergence studies since one does not actually see how the convergence pres-

sures involved are accounted for in the policy processes of countries.

This study seeks to test policy convergence theory by applying it in the anti-

dumping regimes of ASEAN countries. The author is interested in finding out to what

extent convergence has occurred and the mechanisms of such convergence in the area of

anti-dumping policy.

The anti-dumping regimes are normally codified into the anti-dumping laws of a

country and this provides a legal framework for its use by countries. This is in addition

to the anti-dumping and safeguards mechanism framework built into the GATT/WTO

framework, this means that countries still have the freedom to develop laws autonomous

to the WTO which justifies this study (Roque, 2006).

A country's anti-dumping regime is also expected to come under international

pressures that lead to convergence. For example, multinational companies may benefit

from a harmonization of anti-dumping laws and may thus lobby for some procedural

changes in a country's anti-dumping regime. The WTO also benefits from trying to

harmonize the anti-dumping regimes across countries. Yet again the fear of economic

retaliation from a major trading partner may cause a country to modify or develop an

anti-dumping regime that is stricter in its determination of dumping and injury as well as

in the implementation of its anti-dumping duties.

This study looks at the evolution of anti-dumping law in the Philippines and its

major ASEAN trading partners, specifically, Indonesia, Malaysia, Thailand and Indone-

sia. The author chose these countries because they have all passed anti-dumping laws

between 1992 and 2000. Because of the short time span the countries had to develop

anti-dumping policies, the author suspects that convergence may have occurred with


regards to these anti-dumping laws. The author would like to find out if convergence has

indeed occurred and to what were the causal mechanisms that led to this convergence.

B. Statement of the Problem

This study tries to answer the following questions in order to apply policy conver-

gence theory in the case of anti-dumping.

General Question: What are the causal factors behind the convergence of anti-dumping

law among ASEAN member states?

Specific Questions:

1. What is the current state of convergence in the anti-dumping regimes laws of

ASEAN member states?

2. What are the international pressures that governments and policy-makers faced

that may have led to policy convergence in anti-dumping policy?

C. Definition of Terms

Policy Convergence – development of similar or even identical policies across countries

over time both in terms of the process and substance of the policy (Knill, 2005). Opera-

tionally, policy convergence refers to an increase in similarity in the methods and strate-

gies employed by governments to promote specific industries.

International Harmonization – this mechanism leads to convergence when the countries

involved comply with legal obligations under binding international agreements. Often

the agreements require their signatories to adopt similar policies as part of their obliga-

tions (Holzinger and Knill, 2005).

Imposition – Conceptually, this is seen when informal pressures are exerted on organiza-

tions by other organizations. Dependent organizations are likely to adopt patterns of

behavior sanctioned by organizations that control critical resources as these resources can


be used as an incentive or a penalty (Holzinger and Knill, 2005). Operationally, this can

involve pressures being exerted upon an organization within a state by another organiza-

tion from outside the state which the organization is forced to submit to by virtue of the

resources that the pressuring organization holds (i.e. an international financial institution

pressuring governments into adopting certain "conditionalities" in exchange for loans).

Regulatory Competition – Regulatory competition causes convergence when countries

facing competitive pressure due to economic integration mutually adjust their policies

(Holzinger and Knill, 2005).

Transnational Communication – Transnational Communication refers to the tendency of

frequently interacting national bureaucracies to develop similar structures and concepts

over time. "Policy convergence results from organizations striving to increase their

social legitimacy by embracing forms and practices that are valued within the broader

institutional environment (Holzinger, Knill and Sommerer, 2008)."

Independent Problem Solving – Convergence may arise from "similar but independent

policy responses of political actors to parallel problem pressures (Holzinger and Knill,

2005)." The convergence that occurs in this case can be seen as merely a coincidence.

Anti-dumping – The 1994 GATT Agreement on Anti-Dumping defines dumping as the

practice whereby the products of one country are introduced into the commerce of

another country at less than the normal value of the product. Anti-dumping is the instru-

ment that allows an importing country to impose import restrictions when an exporting

country sells products at a lower price than domestic producers (Finger & Nogues, 2007).

D. Objectives

In connection to the research questions posed in the statement of the problem, the

author specifically is interested in the following objectives.

1. To describe the current state of convergence in the anti-dumping regimes of the

Philippines, Indonesia, Thailand, Malaysia and Vietnam.


2. To determine the international causal mechanisms that led to the convergence in

Anti-dumping law.

E. Significance of the Study

This research is also be helpful in the field of convergence studies as Daniel

Drezner (2001) and Christoph Knill (2005) admitted that policy convergence studies is

hampered by a lack of empirical and descriptive data hence many hypotheses remain

unsolved. This thesis hopes to be a contribution to the theory that increased economic

integration leads to increased similarity in terms of policies.

Specifically in the field of policy convergence, this research attempts explain the

behavior of states in the making of policies which are governed by international rules or

compliance with international agreements. In this case it is national anti-dumping laws

versus the WTO anti-dumping agreement and how states try to formulate their laws

according to international guidelines.

Lastly, this research is also a welcome addition to literature on anti-dumping

especially in the legal analysis of anti-dumping law. Junji Nakagawa (2007) notes that

legal analysis in this area has been limited and most of the literature in this area do not

use a common framework for comparing anti-dumping laws across countries. This lack

of a comparative framework is hopefully adequately addressed in this study.

F. Scope and Limitations

This study is limited to describing the state of convergence in anti-dumping

policies between the Philippines and its neighbors Thailand, Vietnam, Malaysia and

Indonesia. This study will then look at the policy process that led to policy convergence/

divergence in the Philippines without describing the same process in other countries.

According to Holzinger and Knill (2005), studies on policy convergence normally

distinguish between policy outputs (the policies that governments adopt) and policy result

(implementation and whether the policy has been effective or not). This study will only


look at policy output in terms of the characteristics of anti-dumping laws across coun-

tries. Furthermore, this study will not look into the normative implications of this con-

vergence, i.e. whether convergence is good or bad for the economy, or whether all

countries benefit from convergence and the like.

CHAPTER II


REVIEW OF RELATED LITERATURE

A. Introduction

This section is divided into two parts; the first discusses literature on policy

convergence. In this part, special attention will be paid to how each study determined

that convergence was taking place and the explanatory factors for such convergence, this

part also features literature that deal with the processes and actors that lead to policy

convergence. The second part looks at comparative studies of anti-dumping and safe-

guard in order in order to show how these regimes may be examined in the present study.

B. Policy Convergence

Empirical Studies on Convergence

Daniel Drezner (2001) attributes policy convergence to economic integration and

free trade. Economic integration and the increase in free trade are attributed to globaliza-

tion which he defined as "technological, economic, and political innovation that have

drastically reduced the barriers to economic, political, and cultural exchange." From this

definition, one can see that globalization also strengthens the market forces borne by

international trade, thus increasing pressures on states to adjust their policies or "con-

verge". Drezner tried to apply his framework in the case of labor standards and environ-

mental protection.

Using a review of previous studies on labor standards and economic effects, he

found that in OECD countries, there has been convergence towards strict labor standards,

while in developing countries there was only a "slow drift" towards the enforcement of

core labor standards. Core standards being rights against child labor, slavery, non-dis-

crimination and to unionize, notwithstanding additional rights such as health, safety,

employment benefits, minimum wage, etc. Drezner claims that this is due to an elite

consensus more than anything else.

In environmental protection, Drezner identified that the literature covers a wide


array of policy areas from the protection of endangered species to global warming, most

of them saying that levels of environmental protection have increased over time. Drezner

looked at statistical evidence linking economic performance with environmental protec-

tion. The evidence shows that varying levels of environmental protection do not deter

investment in a statistically significant way. A more compelling reason for the "explo-

sion" in environmental regulation is supplied by world society theory, in which Drezner

noted that as the number of environmental associations, treaties and organizations grow

and as scientific discourse becomes more rationalized, environmental regulation becomes

stricter. In the end, convergence in environmental regulation mirrors that of labor

standards, with OECD standards becoming stricter and developing countries progress

being erratic.

In the end, Drezner concludes that globalization as a phenomenon is not determin-

istic—there is no way to predict the location of policy convergence.

Holzinger, Knill and Sommerer (2008) tried to statistically test three causal

mechanisms of convergence that were outlined in Knill (2005). This article tries to find

the answer to the question of whether one can actually observe convergence of policies at

all and under which conditions domestic policies are expected to converge (or diverge).

The authors specifically examined the convergence of environmental policy in EU from

1970 to 2000.

The authors of this study start with the assumption that diffusion of policies can

be expected to result in an increase of policy homogeneity among states, what is not clear

however, is the extent of convergence. Furthermore, the authors try to determine whether

an increase in economic and political linkages between nation-states lead to increasingly

similar policy measures across countries.

The authors put forth three international factors that may cause cross-national

policy convergence (in addition to domestic factors). These are: (1) International harmo-

nization; (2) Transnational communication and; (3) Regulatory competition. The re-

searcher has adopted in the present study to explain convergence in anti-dumping.


Using the adoption rates of environmental policies for countries and using regres-

sion analysis, the authors found out that there has been substantial policy convergence in

the countries observed. In testing for the causes of convergence, international harmoniza-

tion and transnational communication seem to affect policy convergence while regulatory

competition does not seem to have an effect.

Nicoletti, Scarpeta and Lane (2003) found evidence against policy convergence

and the race to the bottom hypothesis in the liberalization and privatization in OECD

have caused their regulatory policies in product market regulation. The authors also

found out that the divergence in regulatory policies lines up with the divergent growth

performance of countries that make up the OECD, specifically that European countries

tended to perform poorly relative to the United States. The authors explained this diver-

gence through the fact that OECD countries all started from different levels of productiv-

ity and the countries were also at different levels of technological progress.

The authors arrived at this conclusion through correlational statistics. The authors

made use of a large data set that included 12 OECD countries and that contains informa-

tion on how product market regulations for detailed manufacturing and service industries

have evolved from 1980 to 2000. The authors were concerned as to how sweeping

product market reforms like: (1) privatization; (2) liberalization of potentially competitive

markets; and (3) pro-competitive regulation of natural monopoly markets affected growth

in those sectors. To gauge the extent of these reforms, they used a set of cross-country

quantitative indicators of regulatory reform to reflect regulation in particular areas that

the authors constructed. Growth was measured according to multi-factor productivity

(MFP). As a whole, the indicators that these authors have constructed have shown that

restrictiveness has decreased steadily for the past twenty years. In order to correlate the

MFP growth per sector to the decrease in market regulations, the authors had to use a

series of regressions. Through this, the authors found out that there is a great variation in

the growth rates of the different OECD countries. Nicoletti et al attributed this to the

significant differences in the pace of reform across countries that, in the first place,

already had very different policy approaches at the beginning of the period. At the same


time, market integration, EC competition policies, and the EMU apparently did not

provide sufficient constraints and/or incentives to European governments for harmoniz-

ing the regulations in their domestic markets, which remained largely under the realm of

domestic policies, often unfriendly to competition.

International Harmonization

International harmonization in relation to this thesis is a kind of process leading to

policy convergence which involves the coordination of national policies among states.

The studies discussed so far deal with international harmonization in terms of cross-coun-

try regression analyses. Beth Simmons (2001) on the other hand, tried to examine the

political economy international harmonization in the case of capital market regulations

using a more qualitative methodology.

She started the article by establishing the fact that international capital flows have

increased steadily over the years and that this has caused problems for national financial

regulators and that efforts to enact capital market reforms unilaterally have become

difficult due to the increasingly complex nature of international finance (in the case of the

derivatives market alone, there are so many kinds of instruments that international

finance can get confusing). Simmons mentioned that efforts to coordinate international

capital markets have cropped up starting in the mid 80s and these have varied in their

degree of politicization and institutionalization.

Simmons was interested in determining the causes of this variation focusing on

the mechanisms that encourage policy convergence. To that end, she developed a simple

framework which focuses on the strategic interactions between a dominant "regulatory

innovator" and the rest of the world. (The innovation is considered exogenous to the

framework.) According to her framework, it is then necessary to determine: (1) Whether

other countries have an incentive to emulate the reforms and; (2) whether the negative

externalities experienced by the dominant center are easily targeted or diverted. With

regard to the second condition, the presence of externalities in the dominant country is

essential because it helps determine whether the regulators of the dominant country have


an incentive to pressure other countries to conform, the use of political pressure in this

regard is necessary if harmonization is to occur. Furthermore in the case that externali -

ties are easily targeted or diverted, Simmons expects the dominant country to invest

heavily on international institutions allowing the institution to wield actual power when

otherwise it would be merely weak or symbolic.

In application, Simmons' framework (through international institutions) ade-

quately explains why a large number of national banking regulators have been willing to

adopt the capital adequacy standards in the Basel Accord. The framework also explains

why anti-money laundering reporting rules have been slow and highly politicized. In this

case, the United States has had high negative externalities because money laundering is

costly for them, yet smaller countries do not want to emulate the US because increasing

regulations in this area make them less competitive compared to countries like Switzer-

land where banking secrecy is held in high regard. In the case of accounting standards

for public offerings, there was high incentive to emulate and low negative externality for

the US (which was the innovator), harmonization occurred largely fueled by market

forces with international institutions providing legitimacy.

In conclusion, the framework used here is attractive because it can be used for

other issue areas as in the present study. It may be interesting to find out if dominant

countries have had a role to play in the development of policy through the innovations

that they have enacted and whether they have actively tried to disseminate these innova-

tions. In this study, one can already see that developing countries already have an

incentive to emulate other countries in adopting anti-dumping laws thanks to the eco-

nomic liberalization brought about by the multilateral trading system of the WTO. The

United States (undoubtedly the most powerful proponent of the WTO but may also

include other traditional users such as the EU and Argentina) finds that it is not easy to

divert negative externalities brought about by anti-dumping investigations (such as

retaliations) which leads them to promote conformance to WTO anti-dumping rules.

Domestic Political Conditions Leading to Policy Convergence


Victoria Murillo (2002) contributed to the empirical body of knowledge in her

study that explored the role of domestic politics in the convergence of privatization

policies in Latin America.

In Latin America, it was the debt crisis that triggered the spread of new eco-

nomic ideas, privatization in particular. Traditional policies were seen to have "failed"

and this facilitated the emergence of a new policy consensus. One interesting observation

that Murillo made is that politicians took advantage of the privatization process to

distribute resources in such a way that allowed them to constitute and reinforce political

coalitions. In addition, the politician's prior beliefs influenced how they processed the

information regarding the state of the world and shaped their institutional preferences.

The combined effect of political coalition and beliefs is what Murillo calls "political

bias".

As applied in this study, convergence the similarity in the choice of regulatory

institutions in the period of privatization. This study examined the political/social

environment at the time in which the policies were implemented and used this to try to

explain the outcome. In order to demonstrate how this happened, the author examined

the case of public utility privatization in Argentina, Chile and Mexico.

In Chile, electricity and telecommunications were privatized. The Pinochet

administration was already receptive to neoliberal economic principles and government

had a low preference for state intervention so the government did not create independent

industry-specific regulatory agencies. Under the program of "popular capitalism", the

government created special pricing schemes in the utilities which benefited the govern-

ment's core constituencies and helped create a new class of property owners.

In Mexico, the government only privatized telecommunications. The government

placed restrictions to foreign management and put specific investment targets for new

providers. Mexico already had a high level of preference for state intervention which

explains the creation of an independent regulatory agency (the Cofetel). President

Salinas also tried to exploit the situation by building political coalitions. He used privati-


zation to reward allies and to raise funds for his political party.

In Argentina, there was a moderate level of economic nationalism which explains

why electricity and telecommunications privatization did not include limitations to

foreign capital and management while placing investment targets. The Peronist party

preferred high levels of state intervention and thus created an autonomous regulatory

agency for privatized firms. Menem used the situation to build coalitions by allying with

domestic business groups and labor unions. He even used privatization to reduce out-

standing financial obligations by swapping debt for privatized assets.

To sum up, Murillo's work is useful because it explains that the domestic situation

of a country can be useful in explaining the legal and institutional outcomes of new

policies. For example, the form of regulatory institution and legal framework adopted

can be explained by prevailing ideas at the time. This leads one to the case of conver-

gence in legal institutions. Furthermore, the domestic situation can explain conformance

or non-conformance of anti-dumping laws to the Anti-Dumping Agreement since law-

makers within the country were willing to risk the possibility of dispute settlements in

order for them to please their constituencies with anti-dumping laws that were easier for

them to use or had a higher probability of a positive determination. Of course, it can

work the other way, meaning that the domestic environment may be more indifferent or

even supportive of economic liberalization which means that legislators are more likely

to comply with international agreements and even go beyond the minimum requirements

of the agreement.

Pistor and Wellons (1998) wrote a book describing the development of the legal

framework and legal institutions in Asia and their role in economic development. This

study looks at the role of legal framework in the economic development of Asian coun-

tries. The authors of this book wanted to answer the questions: Does law matter for

economic development? Is Asia different? To address these questions, the authors

presented these hypotheses.

1. Convergence hypothesis. Defined as when laws and legal institutions


converge with economic development. This is said to occur across

economies as "domestic economic development interacts with the growing

internationalization of markets to produce law and legal institutions that, if

not identical on paper, perform largely similar functions" (21).

2. Divergence hypothesis. In this case, each economy follows its own idio-

syncratic development of legal institutions which may or may not be con-

ducive to economic development.

3. Differentiation hypothesis. Different parts of an economy's legal system

behave differently in response to economic development—some parts may

converge, others may diverge.

This study made use of a historical descriptive methodology. The authors de-

scribed the development of business governance, financial policies and dispute settlement

in the countries of: China, Taiwan, India, Japan, Korea and Malaysia.

The authors examined the development of these laws according to their allocative

dimension and procedural dimension. In Pistor and Wellons study, the allocative dimen-

sion refers to the degree in which the state controls resources while the procedural

dimension refers to the legal processes by which states exercise control over resources.

The evidence discovered by the authors seemed to support the convergence

hypothesis. They see that economic development (i.e. economic performance) has

converged and with it legal convergence. The authors also found out that convergence is

stronger along the allocative dimension of the law than on the procedural dimension

which indicated that states basically retained the same institutional framework while

changing in policy goals. Trade protection, especially anti-dumping, while not discussed

in Pistor and Wellons, is procedural in nature, i.e. it reduces the determination of the

allocation of protection to firms into a legal process.1 1 Practice may contradict this since some of the literature say that the state still retains much of the power to determine whether or not to apply a dumping duty. Having an anti-dumping law only makes a final determination seem to just be following a procedure when in reality negotiations between the anti-dumping authority and interested parties are occurring (see Aggarwal, 2007).


Role of Non-State Actors in Policy Convergence

According to the framework of this present study, one of the important sources of

policy convergence is the academe, i.e. universities, think tanks, international organiza-

tions. Sylvia Ostry's (1991) edited volume deals with precisely that.

Her volume was about the role of research and the academe in the liberalization

efforts of countries in East Asia. The book looks at the experience of Thailand, Malaysia,

Korea, China, Philippines, Indonesia, Australia and New Zealand in economic policy

research. It attempts to connect research with economic liberalization and to determine

the qualities for successful policy research.

Some generalizations can be made from the set of countries examined. One is

Universities are important actors in the research and hence policy process. Universities

are also the source of consultants by other research organizations within a country. The

book also examines the changing role of bureaucracies as a country develops. Basically

as an economy increases in complexity, research agencies increase in number and com-

plexity. At first, it is enough for a government bureaucracy to act as a "one-stop shop"

for policy research. But as the passing of policies begins to require broad political

cohesion behind them, research efforts are extended to universities and think tanks. The

private sector will also participate at this point by funding think tanks and other research

facilities in order to protect their own interests. Policy issues also become more complex

(from relatively simple bottleneck debates such as ISI vs export orientation to complex,

sector specific ones).

Basically, what is significant in this study is that it confirms that epistemic

communities (i.e. universities, think tanks etc.) are important sources of policy and that

their contributions to economic policies must be studied.

In another study, Waarden and Drahos (2002) conclude that in their that

convergence has been the result of the gradual and largely implicit pressure and

possibilities for mutual modeling arising from the development of a multi-level split


legal system (what the authors call case law), which, however, has been channeled

between the levels through the lines of communication and exchange created by the

development of a multi-level epistemic community of legally trained officials; i.e. a

combined effect of institutionalism and the epistemic community approach.

Before deciding as to whether lesson drawing was indeed the reason for the

convergence, the authors had to determine whether convergence took place. They

compared the competition policies of Netherlands, Austria and Germany in two

periods, 1950 and 2000. They compared policy across seven dimensions which were:

(1) Goals and basic principles; (2) Application: what organizational arrangements are

in place for the application of the law?; (3) Scope: how broad is the scope of the law?;

(4) The treatment of horizontal restraints of trade, i.e. the classic 'hard' cartels; (5) The

treatment of vertical agreements; (6) The regulation of abuse of a dominant market

position and; (7) Merger control.

The similarities among the countries were assessed using an objective index

created by the authors. The authors used the 2000 EU competition law as the point-

of-reference. They found out that Netherlands differed the least from the EU law,

followed by Germany. Austria was the most divergent from the EU law of the three.

All-in-all, the countries have converged to EU significantly compared to their mea-

surement in 1950.

Given these differences, the authors then tried to explain the causes of this

convergence. They explored three causes: Institutionalism, or pressure from EU;

Neo-functionalism, or pressure from international business (analogous to this study's

regulatory competition) and; Epistemic communities. Of these three, only in the

epistemic community approach did van Waarden and Drahos find a convincing

explanation. They explained that there was an internationalization of the practice of

competition law which lawyers all over Europe somehow became familiar with the

"European model". Given this epistemic community (the lawyers) that are in the

forefront of law-making, it comes to no surprise that competition policies converged

through them.


This study is striking in that multi-level split legal system and the multi-level

epistemic community seems to describe the WTO Committee on Anti-Dumping

Practices. This angle is further explored in Chapter VI of this study.

Maher Dabbah's article (2003) looked at the internationalization of competition

law with specific reference to the role of multinational enterprises (MNEs) as non-

state actors in the process. By internationalization, Dabbah is referring to the increas-

ing acceptance of competition law in many countries whether free market or not.

Dabbah also uses it to refer to harmonizing the competition law all over the world and

that governments should essentially adopt the same laws in order to facilitate trade

and law enforcement.

Dabbah cites the following examples of how one can bring about the internation-

alization of competition law:

1. Bilateral cooperation – this takes the form of formal agreements between

the domestic competition authorities to allow for the sharing of informa-

tion and comity.

2. Harmonization and convergence – The idea that domestic competition

laws can converge towards sine common points and standards.

3. International competition code – This involves creating a detailed interna-

tional competition law which can be adopted by countries.

4. International system of competition law – This involves establishing an

international system of competition law within a framework of autono-

mous international institutions.

Of course, in the internationalization of competition policy, one could not neglect

the role of multinational enterprises. For one, MNEs have been crucial in the develop-

ment of competition laws in developing countries. MNEs have lobbying capacity and

economic power. MNEs also have interests in the internationalization of competition


policy. For one, MNEs want uniformity in the way that competition cases are decided in

different countries. They are also concerned with the length of time it takes to accom-

plish a bureaucratic procedure in a country, they want competition authorities in different

countries to reach decision in more or less the same amount of time.

MNEs as actors in the policy process, is also important in the study of policy

convergence. This study explains and applies it in the case of competition policy. It is

not hard to imagine MNEs and MNCs as actors in the development of anti-dumping and

safeguards regimes.

C. Anti-Dumping Laws

Comparative Studies of Anti-Dumping Law and Use

It was only recently that legal analysis of anti-dumping regimes became popular

(Nakayama, 2007). For this reason, there are only a few serious books and studies that the

author is able to review compared with studies on policy convergence. Most of them deal

with the legal systems of the "traditional" anti-dumping users, the US and EU. These do

not necessarily deal specifically with convergence; rather they go into the policy experi-

ences and policy developments in this policy area. The two studies surveyed in this

section is important in understanding the dynamics in anti-dumping and safeguards as

well as differences in the implementation of these per country which can go far in helping

the author compare anti-dumping and safeguards regimes.

The most notable study that the author reviewed is that of Messerlin and Reed

(1995). This study deals with the increasing similarity (convergence) of the anti-dump-

ing regimes of the US and the European Community since the 1980s. The authors noted

that the anti-dumping regimes became more similar in 3 crucial areas: their relationship

with competition policy; their role in trade policy and; in their political economy dimen-

sion. In terms of the anti-dumping – competition policy relationship, the authors noted

that since the 1920s, the US has been treating anti-dumping as the "international form" of

anti-trust. They were once even procedures that used an economic approach to anti-


dumping which looked at the costs and benefits of dumping (a feature that was shared

with US anti-trust policy which determines the legality of a monopoly based on economic

benefit). Eventually, the US began using the GATT framework for anti-dumping which

had a much less profound connection with competition policy, thus making American

anti-dumping policy more similar with EC anti-dumping policy which also lacked a

profound connection with competition policy.

The second area—that anti-dumping increasingly became a part of trade policy—

resulted from changes in the international trading system. As non-tariff barriers (NTBs)

were reduced in both the US and EC, as a result of multilateral negotiations (namely

GATT and, in the case of EC, the common market), anti-dumping was turned to more

and more frequently for the protection of domestic industries.

Finally, in the political economic dimension, the justification for the use of anti-

dumping policy became largely political, i.e. before the 1980s, EC rhetoric on anti-dump-

ing has rarely invoked notions of "fairness" or "restoring a level playing field". The US

however has been making use of these justifications, thus making the use of anti-dumping

favorable on their part. Since then, the EC has emulated US rhetoric thus making anti-

dumping increasingly the instrument of choice.

Aside from these three crucial areas, convergence has also occurred in terms of

anti-dumping use. Messerlin and Reed examined anti-dumping cases lodged in between

1979 to 1989 for their study. They found that in terms of the number of cases lodged and

the rate of success of anti-dumping investigations, the US and EC have had very similar

outcomes (US has a success rate of 61% and the EC has 75% for the given period).

Outcomes between these two have also been very similar in terms of which industries

have lodged the most number of cases (four industries in particular: chemicals; primary

and fabricated metals; non-electrical machinery and; electric and electronic equipment,

represent 76% and 72% of total anti-dumping cases filed in the US and EC respectively

for the said period).

Messerlin and Reed conclude that the convergence between the US and EC is a


result of a "protection engineering process". This is because the tariff reduction process

within the GATT is a lengthy, complex and expensive process which is rarely resorted to.

Anti-dumping is a much more convenient way to protect domestic industries from foreign

competition.

Jean-Christophe Maur (1998) wrote an article that deals with the echoing of anti-

dumping cases. Echoing is similar to policy convergence, however the similarity does

not lie with the structures in policy. It refers to the increase in similarity of the use of a

particular policy. In this study, echoing refers to when a state initiates anti-dumping

procedures for a certain good and for a certain producing state and within a very short

time span a similar action was undertaken in another state for the same good and pro-

ducer. Maur investigated the role played by multinational enterprises (MNEs) in initiat-

ing these anti-dumping filings and he found that these companies are in the best position

to imitate anti-dumping filings and to benefit from this echoing. Maur calls this regula-

tory competition among MNEs. What this study reveals is that the implementation of

anti-dumping policies may converge across countries and may be brought about by

MNEs. This is interesting because MNEs by definition are not loyal to one state. MNEs

may facilitate communication among states and thus facilitate policy convergence much

like what happened in the case of competition policy as seen in the study of Dabbah

(2003).

Finger and Nogues (2006) in an edited volume, go into the development and

history of anti-dumping and safeguards in Latin America. The book is composed of case

studies of the history, politics and evolution of policies. Since each of the chapters are

written by a different author, there is hardly any unity in the book aside from the common

topic. Some generalizations can be gleaned from the book however. One is that the

application of anti-dumping and safeguards mechanisms goes hand-in-hand with trade

liberalization. These measures can be used as tools for long-term policy management by

government and thus the instruments can be manipulated in order to further long-term

policy goals. Institutional mechanisms for administering the trade defense regime are

idiosyncratic to each country depending on the "selling conditions" of that country (from


Murillo, 2002). Discipline may also vary across countries, given that WTO rules are

already generous in the area of trade defense, some countries chose to make their own

safeguards and anti-dumping regime stricter than the minimum provided in WTO.

Susanta Das (2005) examined the evolution of anti-dumping and safeguards

measures in the United States, European Union and Japan. Specifically he focused on the

politics that led to their adoption. In the case of the United States, the author noted that

its development was characterized by an "executive-legislative tug-of-war". Learning

from US experience prior to World War II (when US congress passed the Smoot-Hawley

Act), the executive branch learned to treat trade protectionism as an instrument of foreign

policy, thus trade policy came under executive control. The EU case was similar to the

United States as it also encountered the same set of economic problems and political

forces and thus their pattern of their protectionist programs were similar. One important

difference however is the institutional set-up. The EU is only "trying to be a state" unlike

the US, which made political unity higher on EU's agenda than the US. Among the

major concerns the EU had at the outset was producing sustainable growth, employment,

promoting social cohesion, the common agricultural policies (CAP) and the environment

among others. This resulted in EU liberalizing under a most favored nation (MFN) basis

while opposing liberalization in traditional sectors such as textiles and agriculture and

anti-dumping became the preferred method of dealing with cheap imports Under the

Treaty of Rome. In the case of Japan an anti-dumping law has been in place since the

1920s, but the Japanese were never a people that relied on judicial procedures and so

anti-dumping was never really used as a policy in Japan. Das concluded that domestic

political economy is a significant influence on the protectionist policies a country under-

takes, in the case of anti-dumping and safeguards, a seemingly innocent 'safety valve'

mechanism becomes a major trade protection mechanism.

From these studies, one can see that anti-dumping and safeguards can take

different forms and be used for purposes other than what they were originally planned for

in the GATT/WTO conventions. One can say that these policies may converge or

diverge in a group of countries and that it would be interesting to discover the reasons for


such an outcome.

Anti-Dumping Laws in Southeast Asia

There are only a few studies dealing with the anti-dumping laws and practices of

Southeast Asian countries and the researcher has yet to encounter any that deals with

anti-dumping laws from a comparative perspective. However, two studies are notewor-

thy: Yoshida and Ito's case study of Thailand included in the volume of Junji Nakagawa

(2007) and Thi Thuy Van Le and Sarah Tong's (2009) case study of Vietnam. These two

case studies both used a historical descriptive methodology for describing the history and

evolution of the anti-dumping laws of Thailand and Vietnam. In these two studies, their

authors discussed the legal bases for anti-dumping and the changes of these laws, whether

it is by amendment or by being replaced with another law. Another common theme in

these studies is the international background behind the changes in the laws which are

commonly attributed in these cases are to conformance with the WTO or to address

inefficiencies in the laws. The key features and improvements of each succeeding law or

amendment are also discussed as well as the institutions that govern anti-dumping.

Yoshida and Ito's case study on Thailand makes use of communication between

Thailand and other countries through the WTO in order to show which directions the

international community was trying to push Thai anti-dumping laws in terms of proce-

dures. The researcher believes that it is also beneficial to use the same technique as this

communication itself can be seen as a mechanism of convergence either as transnational

communication or as international harmonization.

This same technique was not possible for Le and Tong's case study of Vietnam

since as of now, there are hardly any communications between WTO members and

Vietnam regarding its anti-dumping law as of now. What the Vietnam study does use

however are anti-dumping cases that it initiated and were initiated against it. It highlights

Vietnam's increasing awareness and proficiency in the application of anti-dumping laws

on both the part of the government and of the domestic industries themselves. Seeing as

experience in handling anti-dumping cases may influence the anti-dumping laws, the


researcher believes that looking at some cases and dispute settlements may be beneficial

in understanding policy convergence.

Harry Roque (2006) presented a paper on Philippine anti-dumping and other

contingent protection measures in the context of the WTO agreement. This is basically a

descriptive paper which describes Philippine anti-dumping laws as being largely GATT

consistent although some compromises had to be made with certain provisions (for

example, on the giving of dumping duties to the dumping party, which exceeds what was

prescribed in the GATT ). This is very different from the first two studies dealing with

Southeast Asia as the focus was not so much on the anti-dumping laws themselves but on

WTO conformance. What is interesting in the paper was the methodology which used

lobbying by domestic groups and writings of advocates of both trade and protectionism

as the explanation for the inconsistencies of Philippine anti-dumping law vis-à-vis the

GATT agreement. This study also hopes to do the same using the causal mechanisms in

policy convergence.

D. Summary of the Review

The first part of part B of this review focused on empirical studies on policy

convergence. The value of this section is that it shows how other authors operationalize

concepts such as regulatory competition, international harmonization and transnational

communication. The studies examined in this part make up the basis of this study's

theoretical framework. The succeeding parts look at the specific mechanisms from a

more qualitative basis. Part C looks into literature on anti-dumping, the first section of

this part looks at comparative studies of anti-dumping laws and the history of these laws.

The main purpose of this section was to show that anti-dumping laws undergo changes

over the course of history and the reasons that bring this about. The next section exam-

ines some of the history of anti-dumping laws in Southeast Asia, the focus of this study.

This section helps the author determine appropriate methods for examining the history of

these laws.

Looking at the works presented in this literature review, one can find plenty of


justification for the conducting of this present study. One can see that the theory of

policy convergence and related concepts has very good explanatory power and that there

are a myriad of ways in which one can study this phenomenon. This study would like to

approach the case at hand from a qualitative perspective from which there is no shortage

of explanations the mechanism of convergence. A very convincing mechanism is the one

presented by Waarden and Drahos which explained convergence as occurring within a

multi-level epistemic community which in turn exists within an institution such as the

EU. Another mechanism of convergence is domestic conditions as expounded by

Murillo as this can help explain some of the amendments that anti-dumping laws faced

over the years. Noticeably lacking are literature on anti-dumping laws from a compara-

tive perspective. Most of the studies of anti-dumping laws are country-specific case

studies which by their nature stand alone. The volume of Finger and Nogues (2006) and

Nakayama (2007) are collections of these case studies and no attempt at a conclusion or

integration is made at the end of each volume. The researcher needs to correct the lack of

such literature.

CHAPTER III

THEORETICAL FRAMEWORK


A. Introduction

The umbrella thesis for this study is the "policy convergence thesis" which states

that given participation in international organizations, economic integration and transna-

tional communication of epistemic communities policies tend to become more similar

across states (Holzinger, Knill & Sommerer, 2008). This study will employ a conver-

gence framework that was articulated in Knill (2005) and Holzinger & Knill (2005), in

order to show that policies have converged in the countries selected and the reasons for

this. This same framework will be used to explain how international pressures figured in

the development of Philippine anti-dumping policy and how it converged with the anti-

dumping regimes of other countries.

B. Policy Convergence

According to the theory, policy convergence is defined as the increase in the

similarity of policy characteristics across countries over a span of time. Policy character-

istics can refer to policy settings, policy instruments, policy objectives. With respect to

the degree of convergence, Holzinger and Knill (2005) do not provide any objective

criteria. Instead he says "we first of all have to clarify the criteria on the basis of which

we judge whether policies across countries are similar or not." This means that one must

provide his own criteria to say whether policies have converged or not (usually compara-

tive literature on the specific policy should give sufficient points of comparison).

For example, looking at the case of competition policy: convergence in policy

setting is said to occur when laws begin to cover similar elements of intra-firm competi-

tion such as mergers, abuses of market power, horizontal agreements, horizontal agree-

ments, vertical agreements and unfair trading provisions; Policy instruments can refer to

the tests and thresholds employed when government authorities study competition cases

and also whether they use judiciary or administrative based enforcement systems and;

policy objectives which in competition policy would be either to ban monopolies alto-

gether or to ban them only when they case harm to the public (Bollard and Vautier,

1998).


Christoph Knill's theory on policy convergence is not just concerned with policy

similarity, it is also concerned with the following questions: What explains the adoption

of similar policies across countries over time?; Under which conditions can we expect

that domestic policies converge or rather develop further apart?; Why do countries

converge on some policies, but not on others? and; What is the direction of policy con-

vergence?; Do national policies converge at the regulatory top or bottom, and why?

Direction of Convergence

One important element of Knill's framework is how one looks at convergence.

He lists four kinds of convergence according to the direction of the convergence of policy

characteristics:

1. Sigma (σ) Convergence – If there is a decrease in the variation of policies among

the countries under consideration within a span of time.

2. Beta (β) Convergence – When laggard countries (in terms of policy characteris-

tics) catch up with the leaders over time.

3. Gamma (γ) Convergence – Refers to changes in country ranking with respect to a

certain policy area.

4. Delta (δ) Convergence – Refers to "distance changes" (increase/decrease in

similarity) of a country's policies with respect to an exemplary model.

Given these different kinds of convergence, convergence can either be seen as a

gradual process that involve a gradual change towards policy similarity where all coun-

tries unilaterally change their policies without any clearly defined plan within a specific

time span (sigma convergence). It can also mean developing countries make their

policies more similar with more developed nations by imitating their policies (delta

convergence). For beta and gamma convergence, one can imagine indices of economic

openness wherein it is possible to rank countries according to what they have achieved in


terms of economic openness. For this reason, beta and gamma convergence do not seem

applicable in the case of anti-dumping policy as ranking of policies is not possible.

Holzinger and Knill (2005) relies on the concept of Sigma Convergence to

measure similarity change aside from using it to indicate the direction of convergence.

These kinds of convergence may be difficult to use in this study because the authors use

changes in standard deviation (i.e. it is used in quantitative assessments of policy conver-

gence).

The direction of convergence is usually related to the extent of state intervention

or to the strictness of a regulation. Lax standards or laissez-faire policies are identified

with the 'bottom', strict standards or interventionist policies with the 'top' (Drezner, 2001).

And the direction, to quote Holzinger and Knill (2005):

[C]an only be measured whenever the policies under consideration come

in degrees, which can be associated with a normative judgment on the

quality of an intervention. Typical examples are the levels of environmen-

tal and consumer protection or labor standards. However, it is not always

easy to identify what the top and the bottom are in a policy, because there

may be different value judgments…Moreover, when policy instruments

are compared it does not make much sense to speak of directions of

convergence. Only in rare cases can a certain instrument be assumed to

provide stricter (or less strict) regulation than another one. In many cases,

it is therefore impossible to formulate hypotheses on the direction of

convergence.

This study has experienced this same sort of difficulty described in the above

passage since it does not make sense to speak of anti-dumping in terms of "strictness".

The author instead analyzes the direction of convergence in terms of whether the law

intends to make anti-dumping easier (in initiation for the domestic industry and in

application by the government) or to discourage it (by making initiation and investigation

costly for those seeking to use it or by making the laws so technical and sophisticated that


an anti-dumping measure becomes easily justified in the international community). This

is in keeping with Vermulst's (1997) framework of comparing anti-dumping laws.

Mechanisms of Convergence

Another important element of Knill's framework, and a concern of this study, is

determining the causes of convergence. Table 1 lists down those causal mechanisms and

looks at the stimuli and the corresponding responses. One can see that the mechanisms

for convergence can range from coercion to independent problem solving with varying

degrees of coercion and independence in between.

Table 1. Causal Mechanisms of Policy Convergence

Mechanism Stimulus Response

Imposition Political Demand or Pressure Submission

International Harmoniza-tion

Legal obligation through international law

Compliance

Regulatory Competition Competitive pressure Mutual Adjustment

Transnational Communi-cation

Lesson Drawing Problem pressure Transfer of model found elsewhere

Transnational Problem-Solving

parallel problem pressure Adoption of commonly developed model

Emulation Desire for conformity Copying of widely used model

International Policy Promotion

Legitimacy pressure Adoption of recommended model


Independent Problem Solving

parallel problem pressure Independent similar response

Source: Holzinger & Knill (2005)

This study is interested in finding out how anti-dumping policies converged in the

said countries given these causal mechanisms. Were anti-dumping policies the result of

an imposition by another country? Did countries simply discover the usefulness of anti-

dumping on their own? Or did they learn from each other? This can be understood more

clearly by examining the policy-making process for evidence of these causal mechanisms

at work.

C. Operational Framework

The policy convergence framework believes that as time passes and as the inter-

national and domestic situation changes, the anti-dumping laws become more similar.

We see the increase in similarity by looking at past legislation and subsequent amend-

ments where each amendment is seen as an incremental change to be examined in light of

other countries' legislation and from these changes, one can get an idea as to the direction

of convergence.

These probable causal mechanisms can be determined by examining the history of

the political and economic environment. Certainly, one mechanism may seem to provide

greater motivation to a country to amend its laws to a certain direction more than another.

Thus, the mechanism of convergence will have to be examined in light of the direction of

convergence and as to what procedures became more similar. For example, if the number

of steps needed to initiate an anti-dumping investigation decreased among several coun-

tries, one would tend believe that it is more possible that the pressure that resulted to this

change is largely from regulatory competition (brought about by competitive pressure) as

this decrease is an indicator of a move towards a regulatory bottom. Thus, by examining

the points in which anti-dumping laws converge, the researcher may be able to more

accurately pin-point the mechanism of convergence.


Earlier, the researcher mentioned that the direction of convergence will be ana-

lyzed in terms of whether the law makes anti-dumping easier in use (by governments and

by interested parties) or by discouraging it by including many technical procedures. Also

useful is convergence toward the direction of similarity with the ADA.

Ease of Use – When procedures converge toward the direction of ease of use/ap-

plication, the researcher would place more weight on the "more voluntary" mechanisms

of regulatory competition and independent problems solving than the "more coercive"

mechanisms such as international harmonization and imposition.

Harmonization with ADA – If laws seem to converge towards provisions in the

GATT Anti-Dumping Agreement in terms of wording, policy instruments, thresholds,

methodologies and tests, the researcher will automatically ascribe international harmo-

nization as the mechanism unless there is good reason or evidence to believe otherwise.

For this study, the researcher examined the relevant laws and procedures of the

countries and tried to look for areas in which they converge. This also involves looking

at past legislation on anti-dumping in order to see what kinds of changes took place in the

countries' anti-dumping regime. The purpose of this exercise is to roughly determine the

mechanism of convergence that may have caused that aspect to become similar (Chapter

V of this study).

In order to be informed more clearly of the causes of convergence, the author also

looked closely at the case of the Philippines especially the policy process that led to the

adoption of an anti-dumping framework and its specific elements. The author looked for

evidence of the causal mechanisms of policy convergence at work (for example, visits or

complaints from powerful countries regarding the anti-dumping situation in the Philip-

pines and a resulting change in policy may suggest convergence through imposition) and

which aspects of the law contain converged with other countries' anti-dumping systems.

Therefore, if laws converged with one another, it is within this law-making process

wherein one will find the causes of this convergence.


The mechanisms of convergence may already be evident in the international

environment and history. The author will use the following criteria in order to identify

the mechanism of convergence:

Political Demand or Pressure – Is the mechanism that leads to the convergence of

policy through the imposition of laws from another power. The evidence that the author

will keep an eye out for is whether representatives from another state have approached

the leaders and legislators of the state in question to in order to persuade them to enact

anti-dumping laws or to make changes to existing legislation. Political pressure can also

exist when other countries try to bring a country into compliance with international

agreements (in this case, WTO-ADA) with threats to use force.

International Legal Obligation – This is the stimulus that leads to policy convergence

through compliance with international law and other agreements. Holzinger, Knill and

Sommerer (2008) in their empirical study use the ordinal metric of ascension to an

international organization. In this study, the main international agreement that the

countries being studied are members of is the WTO. Therefore, the extent to which

international obligation is a factor in this study depends on how much WTO agreements

are followed.

Competitive Pressure – is the stimulus that leads countries to adopt similar policies

because the country wants to be more competitive relative to other countries. What the

author is looking for is evidence that a country adopted a law or a provision based on the

intention of economic benefit, to simplify application of the instrument or as a retaliatory

measure. Competitive pressure may have taken place if the change in its law is meant to

increase efficiency of the investigation or the effectiveness of a duty. Another change

that may have resulted from competitive pressure are the presence of provisions that by

their nature indicate that government wishes to lessen the negative impact of anti-dump-

ing on its producers or to discourage nuisance initiations. Competitive pressure is closely

linked with domestic pressures since the lobbying of domestic groups may be triggered

by poor trade outcomes but may be distinguished from domestic pressure by the fact that


reform was initiated by government itself.

Transnational Communication – Under policy convergence theory this may come in

the form of lesson drawing, through transnational problem solving, emulation and

international policy promotion. The author believes that all of these occur in one form or

another. For example, the author believes that the WTO Trade Review Mechanism and

the Committee on Anti-Dumping Practices are examples of lesson drawing.2 Under the

Committee on Anti-Dumping Practices, countries may send questions and clarifications

to that body with regard to anti-dumping practices and procedures who would then try to

reply as soon as possible with a solution that is consistent with the WTO.

CHAPTER IV

RESEARCH METHODS

The general strategy for this study is that of a case study of policy convergence.

2 Using state – international organization correspondence as a gauge of transnational communication is consistent with the methodology of Holzinger, Knill and Sommerer (2008) who used the metric of "communicative potential" or the frequency with which an international organization communicates to its member states in the form of meetings, forums and correspondence. This study is expounded on in Chapter VII of this study.


Specifically, the author will examine the convergence of anti-dumping regimes and

related policies in the Philippines, Vietnam, Indonesia, Thailand and Malaysia.

This is a descriptive study that uses document analysis as its main method in order

to show the points of convergence in anti-dumping policy among the said countries. This

study is historical in examining the policy process that went on in the Philippines that

resulted in convergence.

The countries were selected on their basis of geographical proximity, similarity in

economy and trade relations. Furthermore, the majority of these countries have enacted

some sort of anti-dumping law in the early 1990s which indicates that they have all come

under similar problem pressures for this to happen which also increases the chances that

convergence can be observed.

The data needed for this study will be qualitative and they will come in the form

of laws and policies that were put in place between 1992 and those in place in 2008

translated into English if not already in English. The following is a list of anti-dumping

laws that the author examined for the procedures and institutions that they created and the

background in which they were created:

Indonesia:

The Customs Law of the Republic of Indonesia of 1995

No. 34 - "Anti-dumping and Countervailing Duty Act of 1996"

Decree No. 136/MPP/KEP/6/1996 of the Ministry of Trade and

Industry Regarding the Anti-Dumping Committee

Decree No. 172/MPP/KEP/7/1996 of the Ministry of Trade and

Industry Regarding the Organization and the Working Proce-

dure of the Anti-Dumping Taskforce

Malaysia:

Act 504 – "Countervailing and Anti-dumping duties act"

Countervailing and Anti-Dumping Duties Regulations 1994

Act A 1046 – "Countervailing and Anti-Dumping Duties (Amend-


ment) Act 1998"

Countervailing and Anti-Dumping Duties (Amendment) Regulations

1999

Philippines:

Republic Act 7843 – "Anti-dumping act of 1994"

Republic Act 8752 – "Anti-dumping act of 1999"

Thailand:

Ministry of Commerce Notification on Principal and Procedure to

Collect Surcharge on Unfairly Priced Imports and Subsidized Imports,

B.E. 2534 (1991 MOC Notification)

B.E. 2542 – "Anti-dumping and Subsidized Import Act, B.E. 2542

(1999)"

Vietnam:

Ordinance No. 20/2004/PL-UBTVQH11 - "Ordinance Against Dump-

ing of Imported Goods into Vietnam (2004)"

Decree No. 90-2005-ND-CP - "Decree making detailed provisions for

implementation of Ordinance Against Dumping of Imported Goods

into Vietnam (2005)"

The specific sections of these laws were coded according to whether they con-

tained provisions relating to: General Applications; Dumping Margins; Domestic Indus-

tries; Product (and related concepts such as volume of introduction, de minimis prices and

volumes); injury (definition and determination); Price (normal values, exports prices and

how these are constructed) Price Undertakings; Institutions and Agencies Involved in

Investigation and Determination; Filing and Initiation of an Investigation; Treatment of

Evidence and Confidential Information; Dumping Duties and Margins and; Reviews.

These codes were then compared among countries and described in tabular form. The

author also took into account past legislation and the changes that took place. Compari-

son of the laws (past and present and across countries) will constitute the description of


the state of convergence in anti-dumping laws for ASEAN.

For information regarding the possible mechanisms of convergence, the author

relied largely on secondary sources that described the pressures that may influence policy

making. Secondary sources were also relied upon by the author that described the

evolution of a country's anti-dumping regime and some problems and procedures that are

present in its current and past regimes.

The chapter detailing the policy process that went into Philippine anti-dumping

law was written primarily to corroborate the discussion on the direction and mechanisms

of convergence and to inform the thesis of the process of convergence as it may actually

occur in policy making. For this section, transcripts of deliberations in the Philippine

Senate and the Lower House of the bills that would become anti-dumping laws were

studied.

CHAPTER V

POLICY CONVERGENCE IN ANTI-DUMPING

One of the objectives of this thesis is to describe the state of convergence in the


anti-dumping regimes in the selected countries and the points in which their anti-dumping

policies diverge from each other. The policy convergence framework that the researcher

adopted from Christoph Knill (2005) states that policy can become similar in their policy

settings, policy instruments and policy objectives. This section presents the convergence

of anti-dumping policy by first, going over the changes in the anti-dumping policy for

each specific country and saying in general terms the changes that took place with each

change in anti-dumping legislation and some general characteristics and innovations they

contained as well as their role in the larger context of economic policy and then to discuss

specific procedures and aspects of anti-dumping laws. Next, the researcher will examine

the institutional structures of the countries and then show that convergence takes place at

this level. Lastly, the researcher will examine convergence at the procedural level.

A. Legal Bases of Anti-Dumping

This section will discuss the history of laws in anti-dumping in Indonesia,

Malaysia, the Philippines, Thailand and Vietnam. Convergence is seen in the patterns of

adoption between 1990 and 2000—i.e. the story behind how a country comes up with its

current anti-dumping regime is usually the following:

A country would start with a trade and customs code within which contains some

provision that bans the practice of dumping. This code would hardly be invoked and

almost never resulted in a definitive duty on dumped products and the effectiveness and

utility of the provision would thus be dubious as it may lack implementing regulations or

provisions. This was not important since trade policy in the 1980s would still make use

of traditional protectionist measures such as tariffs. In the early 1990s, towards the end of

the Uruguay round which formally established the WTO, countries began amending their

anti-dumping legislation ostensibly to prepare their economies and industries for the

lowering of trade barriers and removal of traditional protectionist measures. In the late

1990s, an amendment or a new anti-dumping law would be enacted as a response to

perceived inefficiencies inherent in the law as well as to keep the laws GATT consistent.

The process is summarized in the timeline in figure 1.


Figure 1. Evolution of Anti-Dumping Laws

Given this story, the author will present the evolution of anti-dumping laws for

each of the countries' anti-dumping regime.

Indonesia

Until late 1995, Indonesia had no anti-dumping legislation. The Customs Law of

the Republic of Indonesia of 1995 was the first law to provide such a basis. In fact, the

English translation of this law contains preliminary statements which state that the law

was reformed from the old customs law in the interest of national development, and that

it state policy to establish legal certainty concerning the customs aspects of international

trade "that have been continuously developing and also to anticipate economic globaliza-

tion". The 1995 customs law includes provisions that allowed anti-dumping duties to be

applied, specifically in chapter IV of said law in which both anti-dumping and counter-

vailing measures were discussed together. The customs law however, only defines

dumping and does not provide any concrete procedures and institutional arrangements;

the Anti-dumping and Countervailing Duty Act of 1996 eliminates this deficiency and

forms the basis of the current Indonesian anti-dumping regime. The following laws

further clarified procedures to be followed as well as serving to create the Indonesian

anti-dumping committee or KADI:

– Decree No. 136/MPP/KEP/6/1996 of the Ministry of Trade and

Industry Regarding the Anti-Dumping Committee


– Decree No. 172/MPP/KEP/7/1996 of the Ministry of Trade and

Industry Regarding the Organization and the Working Procedure of

the Anti-Dumping Taskforce

From what one can see here, Indonesia's policy history actually differs somewhat

from the story presented earlier. While it did start out with a customs law that provided a

basis for anti-dumping, the main piece of legislation never underwent any significant

amendments. The Indonesian legislators must have made the law deliberately vague and

instead gave substantial discretionary powers to the KADI (see the section on institu-

tional arrangement in this chapter). Indeed KADI was given the responsibility to formu-

late appropriate policies to cope with dumped imports and subsidized goods as well as to

formulate policies if Indonesian producers are alleged to be dumping. Therefore, it

seems that Indonesia's strategy in anti-dumping was simply to come up with basic

legislation and supplemented that with more empowered institutions, thus eliminating the

need to amend existing laws as procedures and methodologies can be decided by KADI,

thus explaining why Indonesia does not follow the usual pattern of legislation in the

region. Table 2 summarizes Indonesian anti-dumping legislation.

Table 2. Indonesian Legislation

Year Legislation Implementing Regulations Remarks1995 No. 10 Customs

LawNone Establishes need for legal

certainty and recognizes "globalization". The law contains no concrete proce-dures or institutional arrange-ments to handle dumping

1996 No. 34 Anti-Dumping and Countervailing Law

Decree No. 136/MPP/KEP/6/1996 of the Ministry of Trade and Industry Regarding the Anti-Dumping Committee and

The 1996 law is lacking in detail in its procedures. Decree 136 corrects this by giving KADI the responsibil-ity of formulating policies to deal with dumped goods into Indonesia and even to formulate policies on how to cope with allegations that a domestic producer is dump-ing.

Decree No. 172/MPP/KEP/7/1996 of the Ministry of Trade and Industry Regarding the Organization and the Working Procedure of the Anti-Dumping Taskforce


Malaysia

The Malaysians had a Customs act in place in 1967. The legacy of this act in the

1993 law and 1998 amendment is that the phrase "officer of customs" retains the same

definition in the present as it had in 1967.

The Malaysian anti-dumping regime is embodied under the Act 504 – Counter-

vailing and Anti-Dumping Duties Act 1993 and under the Countervailing and Anti-

Dumping Duties Regulations 1994. These laws are unique in that they do not refer to an

older export or trade code.3 These laws were amended by Act A 1046 – Countervailing

and Anti-Dumping Duties (Amendment) Act 1998 and Countervailing and Anti-Dump-

ing Duties (Amendment) Regulations 1999 respectively. Among the reasons stated for

the amendment of the law is primarily for increased consistency with the ADA.

The primary changes that were made to the anti-dumping regime in 1998 and

1999 were clarifications in procedures and methodologies to establish the normal value of

a product and how to make comparisons with the export price. Further standards for the

filing of a dumping petition were established in the amendment, specifically saying that

petitioners must already submit evidence that dumping is happening. Table 3 summa-

rizes the relevant legislation of Malaysia.

Table 3. Malaysian Legislation

Year Legislation Implementing Regula-tions

Remarks

1993 Act 504 – Countervailing and Anti-Dumping Duties Act 1993

Countervailing and Anti-Dumping Duties Regulations 1994

None

1998 Act A 1046 – Countervailing and Anti-Dumping Duties (Amendment) Act 1998 (Act 504 remains in force)

Countervailing and Anti-Dumping Duties (Amendment) Regulations 1999

None

3 However in a communication with the WTO (G/ADP/Q1/MYS/2 - G/SCM/Q1/MYS/2), Malaysia made reference to Countervailing and Anti-Dumping Duties Regulation 1984. It is not clear from the text of Act 504 what its relationship to this or any other law is, however since the 1984 regulation is just a "regula-tion", it could not have had the same force as the current act.


Philippines

The Philippines typifies the pattern that was described. The original anti-dumping

law was section 301 of the Tariff and Customs code. Subsequent laws, namely R.A.

7843 (Anti-dumping act of 1994) and R.A. 8752 (Anti-dumping act of 1999) are applied

as amendments to section 301 of the Tariff and Customs code and thus retained the code's

original organization, numbering style and language in order to be consistent with it.

Section 301 was written in the 1970s long before anti-dumping became a common

practice, thus the case, this original law was rather rudimentary and its procedures were

cumbersome and it was not widely used. In 1994, Congress passed R.A. 7843 with the

short title Anti-dumping act of 1994. This law amended the said section 301 of the tariff

and customs code. This in turn was amended by R.A. 8752 or Anti-dumping act of 1999.

This latest act provides the current framework in which anti-dumping is conducted in the

Philippines.

The main changes that took place when the 1994 law was replaced by the 1999

law were: that the laws were made more GATT consistent, established common legal

provisions with other safety nets such as countervailing and safeguards; centralization of

anti-dumping filing; simplified process from initiation to final determination; provision of

discretionary power to the government to terminate the investigation when the dumping

margin is found to be de minimis (less than 2% of export price or when volume is negligi-

ble) among other innovations. These kinds of changes indicate that government was

aiming for a more efficient anti-dumping regime, one where it is easier for government to

conduct investigations and faster to get an outcome. Table 4 summarizes Philippine

legislation.

Table 4. Philippine Legislation

Year Legislation Implementing Regulations Remarks1978 Tariff and Customs None It was hardly used and


code section 301 lacked implementing procedures. Govern-ment agencies were unprepared to handle anti-dumping investiga-tions.

1994 R.A. 7843 – Anti-dumping act of 1994

Tariff Commission Regula-tions

Was passed before the WTO came into force and deliberately con-tains inconsistent provisions.

1999 R.A. 8752 – Anti-dumping act of 1999

Tariff Comission Regula-tions

None

Thailand

The history of Thai laws also typifies the pattern presented. The earliest legisla-

tion on anti-dumping was the Anti-Dumping Act B.E. 2507 (1964). After this, there was

the Ministry of Commerce Notification on Principal and Procedure to Collect Surcharge

on Unfairly Priced Imports and Subsidized Imports, B.E. 2534 (1991 MOC Notification).

According to Sutham (2008), this law borrowed much of its content from the U.S. unfair

trade statutes, but was not well known and was hardly used. The relationship between

the 1964 Act and the 1991 MOC is that the latter never technically replaced the former.

The 1991 MOC was made to be consistent to the Export and Import Act B.E. 2522

(1979), so the author does not know what the status of the 1964 act was at this time. In

any case, Thailand's current anti-dumping regime operates according to the framework

put down in the Anti-Dumping and Countervailing Act, B.E. 2542 (1999) which formally

replaced the 1964 Act.

One reason that Sutham (2008) claims why Thailand came up with the 1999 law

was that it was a response to a challenge from Poland in the WTO for allegedly violating

numerous provisions of WTO Anti-dumping Agreement.4

Yoshida and Ito (2007) notes that the 1999 Act and the 1996 notification are

essentially the same law and that the 1999 Act was just made in order to make the law

more permanent since an Act carries a different character from a Notification (which can

4 Communications among WTO members on anti-dumping legislation are discussed in Chapter VII.


easily be changed within the ministry). The 1999 Act also uses wording that is similar to

the WTO (Sutham, 2008)

The evolution of Thai law follows similar patterns with the other countries in this

study, having an old law passed before ascension into the GATT/WTO and then having

the law replaced in with another law with improved procedures and more GATT consis-

tency. Indeed, the 1999 law is more detailed than the 1991 MOC especially with regard

to the institutional arrangement and allegedly, according to Sutham (2008), has wording

based largely ADA. Table 5 summarizes Thai legislation.

Table 5. Thai Legislation

Year Legislation Implementing Regulations Remarks1964 Anti-Dumping Act

B.E. 2507 None Almost never used

1979 Export and Import Act B.E. 2522

1991 MOC Notification This notification coexisted with the 1964 anti-dumping law. It never amended it.

1996 1996 MOC Notification Amended the 1991 notifi-cation and acts as imple-menting regulation of the export and import act.

1999 Anti-Dumping and Countervailing Act, B.E. 2542

Officially repealed the 1964 law.

Vietnam

The case of the Vietnamese anti-dumping regime is special. They were latecom-

ers in the WTO, their first inkling of an anti-dumping law came in 1997. Their anti-

dumping regime, only reached the final form of their anti-dumping regime in 2006 (with

The Decree No. 04/2006/ND-CP which sets up an anti-dumping committee), making

them the last country to have adopted an anti-dumping law in this study. Vietnam has

probably benefitted from lessons in anti-dumping from its neighbors. This also means

that they do not follow the same pattern of the development of anti-dumping laws as their

neighbors.

Vietnam only joined the WTO in 2007. The anti-dumping ordinance was enacted


in 2004 in preparation for the challenges of WTO membership. This situation was

similar to the one the Philippines found itself in as it was preparing to ratify the in which

the country was preparing to legalize the GATT in 1995.

Anti-dumping and anti-dumping regulations were already recognized as important

in the late 1990s as Vietnam was in the midst of its Doi Moi (economic restructuring)

program. In the Trade Law of 1997, anti-dumping was mentioned for the first time in a

legal document. Article 8 of the Trade Law of 1997 specified dumping as an unfair

competition which was punishable as a crime which was punishable by penalties such as

administrative fines ad compensation in case the act caused material injury. This ar-

rangement was not very effective because material injury was defined as a legal liability

which would have been inconsistent in modern international trade law and was rather

difficult to enforce (Le & Tong, 2009)

In 2001, the Ordinance of Price was passed. Dumping was made illegal in

Vietnam when it damages the interests of businesses and of the state, but it only applied

to foreign businesses operating in Vietnam (Le & Tong, 2009) so it must have operated

much like an anti-trust law rather than an anti-dumping law which limited its overall

effectiveness at protecting domestic industries.

Le and Tong (2009), list down the other legal documents that complete the

Vietnamese anti-dumping regime. These are:

The Decree No.90/2005/ND-CP sets detailed regulations and guid-

ance for implementing the Ordinance on Anti-dumping of Imports

into Vietnam. This law was made pursuant to the Law on Export and

Import Duties of 1991 (amended in 1993 and 1998)

The Circular No.106/2005/TT-BTC from the Ministry of Finance lays

out guidelines on the collection, remittance and refund of anti-dump-

ing duty and anti-subsidy duty.

The Decree No. 04/2006/ND-CP sets up the Council for Handling of

Antidumping, Anti-subsidy and Safeguard cases and defines its


functions, responsibilities, judiciary authority and organizational

structure.

The legislation of Vietnam is summarized in table 6.

Table 6. Vietnamese Legislation

Year Legislation Implementing Regulations1991 Law on Import and

Export Duties

2004 Ordinance No. 20-2004-PL-UBTVQH11 "Against Dumping of Imported Goods into Viet Nam"

Circular No: 90/2005/ND-CP Regulations and Guidance for Implementing a Number of Provision of the Ordinance on Antidumping of Imports into Vietnam

No. 106/2005/TT-BTC Guiding the collection remittance and refund of anti-dumping tax and;

No. 04/2006/ND-CP sets up the Council for Handling of An-tidumping, Anti-subsidy and Safeguard cases

Observations

The process of adoption and evolution of anti-dumping laws are very similar

among the cases. Even the case of Vietnam seems typical if we look at it in the light of

the date it became a WTO member. In all cases, the pivotal moment was when the

country was preparing to become a WTO member in which time the country scrambled to

enact an anti-dumping law which would allow it to protect domestic industries in the new

environment. The evolution of anti-dumping laws among the countries is summarized in

the timeline in figure 2.


Figure 2. Evolution of Anti-Dumping Laws Among the Countries

B. Institutional Arrangement

By looking at the pertinent legislation and government anti-dumping websites, the

author is able to get an idea of the institutional landscape governing anti-dumping in

these countries. By looking at the institutions, the author is able to see certain patterns.

One of them is the separation of functions among agencies and these functions are:

Final Decision Maker – This agency makes the final decision to

impose a duty on dumped goods. Often, the final decision maker also

handles applications/petitions for anti-dumping duties and sometimes

is the one that initiates the dumping investigation on its own accord

and regularly reviews decisions.

Investigating Agency – Agency in charge of gathering information on

normal values, export prices, import volumes, existence of injury etc.

Sometimes, it may not be a formal and separate agency but a dedicated

committee attached to the final decision maker.


Auxiliary Agencies – Commonly the customs department which can

be relied upon to provide information on prices and volumes when

needed.

Another area where institutional arrangement converged in is in the degree of

centralization: i.e. one government body (usually the department or ministry of industry

and trade) accepts the anti-dumping petition, then hands it down to a lower body serving

under it (a specialized anti-dumping committee/commission) to collect data and to

determine whether dumping and injury is occurring. This lower body then sends a report

back to the higher authority which then decides whether or not to impose anti-dumping

duties. The task of collecting dumping duties and preliminary dumping duties usually

lies with the finance ministry/department. There is divergence in the institution chosen

for resolving anti-dumping disputes diverges among the countries studied: For example,

the Philippines assigns this task the court of tax appeals (a body under the judiciary)

whereas Vietnam leaves this to the trade minister (a body under the executive branch).

Related to convergence in institutional arrangement is whether the system is

unitary in investigation of dumping and injury, which means that one body investigates

both. In this study, all these countries feature unitary anti-dumping arrangements: i.e.

one government agency; as opposed to bifurcated systems that use separate agencies for

investigating injury and dumping independent of each other.

This next portion will discuss the institutional arrangement per country.

Indonesia

It was noted earlier in this chapter that Indonesia operated its anti-dumping

regime on a law that only contained general provisions and guidelines. The author

believes that Indonesia grants substantial discretion to its Anti-Dumping Committee to

compensate for the vagueness of its laws.

Article 2 of Decree No. 136 says that the tasks of KADI are as follows:


(a) investigating dumped goods and subsidized goods;

(b) collecting, examining and processing pieces of evidence and

information;

(c) proposing the imposition of anti-dumping and countervailing duties;

(d) carrying out other activities determined by the Minister of Industry and

Trade;

(e) making reports on the realization of tasks.

Aside from these tasks, KADI shall handle problems over Indonesian exported

goods which are alleged to be dumped goods by a foreign country, a task not given to

equivalent bodies in the other countries of this study. Lastly, KADI is also assigned the

following functions:

(a)formulating policies to cope with dumped imports and subsidized goods;

(b)examining, consulting and handling all problems relating to dumped

imports and subsidized goods;

(c)controlling and directing other activities to cope with dumped imports and

subsidized goods; and

(d)formulating policies to cope with Indonesian exported goods which are

alleged to be dumped goods.

The members of this body are composed of representatives from the Ministry of

Trade and Industry (who chairs the body), Ministry of Finance and the Ministry of

Agriculture. Representatives from other relevant ministries are sometimes invited to join

meetings and investigations. While originally being under the Ministry of Industry and

Trade (whose representative chairs it), in 2000, "The Minister (of Industry and Trade) no

longer chairs KADI but rather he will act as an adviser of the committee so as to make it


more effective" (Asia Pulse, 2000). It also has the effect of making KADI even more

independent of the Ministry of Industry and Trade. In spite of this, there is still some

clamor among business groups. In one instance, an Indonesian Steel Executive was

quoted saying, "KADI is an independent institution which only gives recommendations

on anti-dumping import duty to the Finance Ministry after probing into cases on dumping

allegations." Indeed many businessmen wish that KADI was given greater powers to

decide to impose anti-dumping duties and not just to recommend it (Asia Pulse, 2007).

Assisting the KADI in its investigation is the Operational Team of Anti-Dumping,

while being under the supervision of the KADI and is tasked with gathering information,

monitoring of allegedly dumped products, evaluate dumping duties and price undertakings.

Appeals and Judicial Review in the 1996 law are to be resolved by the Appeal Institute

which was created for customs affairs. Later, the Appeal Institute was dissolved and

replaced with the Tax Dispute Settlement Board which has full jurisdiction over the

decisions of KADI as Anti-Dumping legislation is part of the Custom Laws which falls

under the Tax Law of Indonesia.5

Malaysia

The Malaysian law gives the responsibility of handling anti-dumping cases to the

Ministry of International Trade and Industry (MITI). From what can be gleaned from a

reading of Malaysian legislation and information being presented in government websites,

it seems that the acceptance of petitions and investigation are made by the MITI. The MITI

does not make a final decision to impose a duty; rather it makes a recommendation to the

Ministry of Finance who shall be the one to make a decision. This arrangement seems to

make the investigating agency and the decision making body independent from each other

since both ministries should be at the same level below the executive. The collection of

duties shall be conducted by an officer of customs. References to a division of powers

within MITI are hardly made in legislation and in government websites, so organization is

5 The issue was raised in a notification by Indonesia in the WTO. Questions from the United States and Argentina were sent to Indonesia regarding the change specifically on the Tax Dispute Settlement Board's relationship with KADI and with the Customs Law. The questions and the reply re reproduced in docu -ment G/ADP/Q1/IDN/13-G/ADP/Q1/IDN/13.


not as clear as Indonesia's KADI, what is clear from communications with the WTO is that

the MITI has an Investigating Authority (IA) which accepts petitions and initiates

investigations.6 The High Court takes care of any appeals or disputes regarding the validity

of anti-dumping duties should they arise.

Philippines

The Department of Trade and Industry – Bureau of Imported Services (DTI)

accepts petitions for anti-dumping coming from industrial sectors and the Department of

Agriculture (DA) accepts the petitions in case of agricultural products. They accept

application, initiate investigation, render preliminary ruling and final determinations.

The Philippines is the only country in this study that makes such an arrangement and

evidence coming from records in the House of Representatives suggests that this is the

result of independent problem solving.

The Tariff Commission (TC) is the body that conducts formal investigations the

results and findings of which are then reported to either the DTI or DA Secretary who, in

case of affirmative findings, will issue Department Order imposing AD duties.

The Bureau of Customs (BOC) which is under the Department of Finance (DOF)

is supposed to assist the investigation by providing information relevant to the investiga-

tion such as volume of imports, prices, information about foreign producers etc.

Appeals are handled by the Court of Tax Appeals which is a judicial body inde-

pendent of influence from the DTI/DA.

In the past, the DOF was the anti-dumping authority under the 1978 Tariff and

Customs code. The DTI came into the picture in the Anti-Dumping Act of 1994 which

assigned either the DOF or DTI as the anti-dumping authority. The 1999 Anti-Dumping

Act removed responsibility from the DOF completely and left it with the current set up.

6 G/ADP/Q1/MYS/2 - G/SCM/Q1/MYS/2


Thailand

The Ministry of Commerce (MOC) is assigned the responsibility of handling anti-

dumping cases and is even authorized to issue ministerial regulations specifying method-

ologies, and procedures concerning the determinations of dumping, subsidies, injuries,

anti-dumping measures, countervailing measures, reviews. The department of foreign

trade, a body under the MOC is supposed to handle the investigation of dumping and

injury.

The Customs Department is supposed to assist the MOC by collecting informa-

tion for it when requested and the Ministry of Finance is given the power to craft regula-

tion for the Customs Department.

Lastly, there is an advisory body called the Committee on Dumping and Subsidy

which is made up of representatives from the Ministry of Commerce, Minister of Fi-

nance, Ministry of Foreign Affairs, Ministry of Agriculture and Cooperatives, Ministry of

Industry, Board of Investment, Department of foreign Trade, Department of Internal

Trade and members of the cabinet. It is tasked with the following duties:

(i) to perform their duties involving anti-dumping and countervailing measures

under this Act;

(ii) to approve or reject undertakings;

(iii) to serve as advisors with regard to the formulation of ministerial regulations

and notifications to maintain compliance to this Act;

(iv) to perform other functions as prescribed by the Act or assigned by the Cabi-

net.

All decisions made by the committee shall be made by a majority vote of all the members

present.


The 1964 act assigned the Ministry of Finance the task of handling anti-dumping

cases. The 1991 MOC which was based on the 1979 Import and Export Act shifted the

anti-dumping authority to the Ministry of Commerce. This shift in institutional arrange-

ment can be seen as a quirk of fate as it was only because the Ministry of Commerce

which came up with the notification even while the 1964 act was still applicable (Yoshida

& Ito, 2007). The department under the MOC that was in charge of anti-dumping matters

was the Department of Business Economics. When the 1996 MOC Notification came

out, this role was shifted to the Department of Foreign Trade.

When the 1999 act was made, it can be said that the MOC was maintained as the

authority out of convenience as well as to comply with the GATT agreement.

Vietnam

The Ministry of Industry and trade (MOIT) accepts petitions and makes the final

decision on the application of anti-dumping measures. In addition to this, Article 7 (2) of

the anti-dumping law also states that "the Government shall set up, and specify the

organizational apparatuses, functions, tasks and powers of, anti-dumping bodies under

the Ministry of Trade, including:

a. The anti-dumping investigation agency (known today as the Vietnam Competition

Administration Department or VCAD), which shall investigate and look into anti-

dumping cases and, when necessary, propose the Trade Minister to apply provi-

sional anti-dumping taxes

b. The council for handling of anti-dumping cases, which shall consist of a number

of standing members and other members who shall work on each case to review

the conclusions of the investigation agency, discuss and decide by majority on

whether the goods are dumped into Vietnam or not, causing or threatening to

cause material injury to the domestic industries; and propose the Trade Minister to

issue decisions to apply anti-dumping taxes.


Other ministries and ministerial level agencies and the People's Committees are

also tasked to coordinate with the MOIT (within the scope of their respective tasks and

powers) in performing State management over anti-dumping measures and applying anti-

dumping measures.

Appeals and disputes are supposed to be handled by MOIT but this role may be

transferred to Vietnamese courts if the parties are not satisfied by the decision or if the

MOIT itself is unable to make a decision.

Observations

As noted earlier, the institutional arrangement among the countries is very similar:

The division of tasks is similar as well as the level at which the decision is made. For

example, the decision making authority is always at the ministerial level and the investi-

gating authority is usually body directly supervised by the same decision making body

(with the exception of Indonesia which diverged in 2000) and is tasked with recommend-

ing the kind of action the decision making body has to make. Auxiliary agencies are also

usually connected with the ministry of finance and the Review body is usually a judicial

court independent of the decision making authority. The reason for this outcome seems

to be that this may be the optimum set-up and division of tasks, after all, it was noted by

Vermulst (1997) that further separation of tasks may be too complicated and require more

expertise and sophistication in implementation than developing countries are likely to

have. Table 7 is the division of tasks among the countries in this study.

Table 7. Institutions involved in anti-dumping

Country Anti-Dumping Author-ity

Investigating Agency Auxiliary Agen-cies

Indonesia Ministry of Trade and Industry

Indonesian Anti-Dumping Committee (KADI)

Operational Team of Anti-Dumping

Malaysia Ministry of Finance Ministry of Trade and IndustryPhilippines Department of Trade and

Industry/Department of Agriculture

Tariff Commission Bureau of Cus-toms

Thailand Ministry of Commerce Department of Foreign Trade Customs Depart-


and; Committee on Dumping and Subsidy

ment

Vietnam Ministry of Industry and Trade

Vietnam Competition Adminis-tration Department and; Council for Handling of Anti-Dumping Cases

Other ministries and ministerial level agencies

C. Procedural Level

For this section, the author had to rely on several authors to guide him on specific

aspects or procedures in anti-dumping law that can experience convergence or divergence

(The authors he turned to as reference include Vermulst, 1997; Blonigen and Prussa,

2001 and; Horlick and Vermulst, 2005). From a reading of these laws, the author decided

to look at the following aspects of anti-dumping for convergence:

1. Public interest provision – This means that the imposition of an anti-dumping

duty has to be within the public interest for it to be allowed. Some countries

may or may not have it.

2. Transparency – This refers to how the countries treat confidentiality of

information. It can range from a very transparent treatment meaning that

every piece of information submitted to the investigator may be viewed by

other interested parties or even the general public, or information may be

completely restricted and everything in between. This also applies to the

publishing of information relating to the decision to apply anti-dumping

measures.

3. Levy of Duty - Levy of the duty refers to the method in which an estimate of

the dumping duty is computed and collected. This commonly comes in the

form of either prospective or retrospective duties.

4. Provisional and Retroactive measures – Provisional duties are duties imposed

on an exporting country before one arrives at a definitive decision. Retroac-

tive measures are duties meant to address dumping before the anti-dumping

petition was filed. The concern here is to determine whether these measures

exist or not and the rules that govern their use.


5. Initiation of Investigation – This refers to the requirements that domestic

industries must accomplish and processes that they have to pass before the

dumping investigation takes place. Requirements for the investigation to take

place.

6. Determination of Injury – All anti-dumping laws contain a provision that

states that the dumped product should be the cause of the injury of the domes-

tic industry. In other words, determination of injury is how countries seek to

make a causal link between dumping and injury. How is this reflected in the

law? Does it contain specific instruction regarding the treatment of evidence?

7. Determination of normal value – The evidence and procedures that go into the

determination of normal value and export prices.

It is important to note that the laws differ in terms of detail. Some laws (or set of

laws) my be so highly detailed such that it governs the tiniest detail of an anti-dumping

investigation, while in some other countries, the law is left deliberately vague and there-

fore, procedures and methodologies are often left to the discretion of the institutions

handling the investigation. The author will also try to account for the level of detail

present in the anti-dumping law.

Public Interest Provision

The public interest provision is a provision that would prevent the imposition of

an anti-dumping duty if the anti-dumping authorities believe that the imposition of a duty

will generally be detrimental to the public. The public interest clause is not included in

the GATT and thus it is completely up to the discretion of legislators whether to include

it or not. One can take the presence of a public interest provision as evidence that the

country is trying to lower trade barriers, as little as though it may seem (as a public

interest provision makes it harder for a domestic industry to succeed in anti-dumping

duties). Convergence in this area can be seen as a (weak) case of a "race to the bottom"

because the country, while still desiring to protect its local industries, still tries to keep its

regulatory regime as open as possible. Table 8 below summarizes the public interest

provisions in the countries being studied.


Table 8. Public InterestCountry Summary of Rules Sections

Indonesia The law does not contain any public interest provi-sion.

Malaysia The public interest clause applies at the decision to start an investigation, meaning that the investigation must be in public interest. In case circumstances have changed during the investigation, the investiga-tion may be terminated provided it is in the public interest. After the final determination has been made, the authority may also decide whether to apply dumping duties based on public interest. The acceptance of undertakings must also be in public interest.

Article 20 no. 4 (c) (in the 1998 amendment)Article 25 no. 2Article 26 no. 1 (b)Article 27 no. 2 (c)Article 28 no 1 (e)

Philip-pines

There is no public interest provision. However, frivolous filings are discouraged because a security is levied upon the initiation of an investigation which is meant to pay for the damage that an investigation may cause should the foreign producer be found to be not guilty of dumping.

Par. b

Thailand The imposition of an AD measure must be made in the public interest, taking into account both the domestic industry and the consumer.

Section I Art. 7

Vietnam If the imposition of a dumping duty is against public interest, the minister of trade may reject the imposi-tion of dumping duty. Another provision states "The application of anti-dumping measures must not cause harm to the national socio-economic interests."

Article 40 no. 1

With regards to this provision, only Malaysia, Thailand and Vietnam seem to

have inserted a public interest provision in their laws.7 Note also that there are nuances:

i.e. Vietnamese authorities may reject the imposition of duties, which is similar to the

Malaysian arrangement as opposed to Thailand which must reject the measure under the

same circumstance. Also, in a communication to the WTO from Malaysia, the Malaysian

government explained that "Public interest" may cover a wide range of factors including

the interest of consumers and downstream producers of the imported product. (Note:

Whilst at the same time taking into account the need to promote competitive environ-

7 A public interest provision in Philippine anti-dumping law is actually unnecessary because it is guaran-teed in Article XII of the 1987 Constitution


ment). The public interest test could not lead to a modification of the amount of such

duties.8

Transparency and Confidentiality

These provisions refer to the treatment of evidence and dissemination of informa-

tion by the anti-dumping authority and the investigating authority. The provision in the

ADA is Article 6 – "Evidence". Specifically, the agreement seeks to ensure that certain

guidelines and standards of fairness, transparency and confidentiality are followed in the

anti-dumping investigation, particularly with regards to the gathering of evidence. Table

9 is a summary of the rules that countries apply according to their most recent anti-dump-

ing laws or amendments.

Table 9. Transparency and ConfidentialityCountry Summary of Rules SectionsIndonesia Evidence and other information submitted to the

investigating agency may be examined by other interested parties provided that they are not confiden-tial in nature which the government may not disclose without the other party's consent. Should the govern-ment end up using confidential information as the basis of the final decision, the government may disclose it.

Chapter IV Article 13-15

Malaysia All information will be freely available to all parties, except in the case of confidential information which will be given due protection.

Section 34 no. 1-3 (in the amend-ment)

Philip-pines

The Philippine law does not say anything regarding the availability of information confidential or other-wise. Confidential information from the defendant is to be protected. Before the final determination is made, government is to disclose in writing the essential facts under consideration to the interested parties in a sufficient time to defend their interests.

Par. ePar. h no. 5

Thailand Confidential information will be protected. Informa-tion/evidence under consideration for the final determination will only be disclosed to interested parties just before the final decision is made (just enough time for interested parties to defend their interests).

Article 26 and 30

Vietnam Information is freely available except when confiden-tial.

Article 15

8 G/ADP/Q1/MYS/6 – G/SCM/Q1/MYS/6


From what can be seen in the table, the standards and degree of confidentiality are

similar across countries. There is no system that makes all submitted information freely

available, confidentiality is held in high regard. Information is also treated as confiden-

tial only when a party requests confidential treatment which it also has to show a good

cause for it.

Levy of the Duty

Levy of the duty refers to the method in which an estimate of the dumping duty is

computed and collected. According to Vermulst (1997), there are two ways in which a

duty may be levied: Either prospectively or retrospectively. A prospective duty is where

the dumping margin is computed beforehand and then applied to all imports of the

dumped good over the course of the period in which the dumping duty applies. Interested

parties may request for review in which case, the dumping margin will change and hence

the duty will also change. A notable user of prospective duties is the EC. A retrospective

duty on the other hand uses the actual dumping margin which is computed regularly

through reviews (usually every year). A notable user of retrospective duties is the US.

Table 10 summarizes how duties are to be levied.

Table 10. Levy of Duty

Country Summary of Rules SectionsIndonesia Rules are not very detailed. Levy is probably

prospective since the customs law states anti-dumping duties shall be imposed on dumped goods at the maximum amount of the margin between normal value and export price of such goods and the use of average weighted margins to be applied to all producers. Furthermore no arrangement exists for regular annual reviews for changes in dumping margin.

Customs Law Article 19Anti-Dumping Law Article 1 no. 4 and Article 4

Malaysia Malaysia will only take a duty lower than the dumping margin if it is sufficient to remove injury. Dumping margin is computed beforehand making it a prospective levy.

Article 15 no. 2;Article 25 no. 8

Philip-pines

Among the things that the anti-dumping investi-gation has to reveal is the amount of anti-dump-ing duty to be imposed as well as the duration.

Par h no. 4-5Par kPar l


This makes Philippine levies prospective. Cumulation of imports is also practiced in the Philippines. Interested parties may also request a review of the duty.

Par o

Thailand Dumping duty should be determined beforehand and should only be sufficient to remove injury and should not exceed the dumping margin. Average weighted margins should be used when there are several producers of the dumped prod-uct. Producers/exporters may also request for reviews of their dumping duty and may be refunded if duty exceeds the duty necessary to counteract injury.

Article 18 Article 49Article 50

Vietnam The dumping duty is levied prospectively except in the case of when exporters of the goods that are subject to antidumping duties did not export such goods to Vietnam during the period of investigation, on written request, government shall determine individual margins to be imposed retrospectively.

Article 5 no. 1;Article 24;Article 42 no. 1-3 (According to Circular no 90/2005/ND-CP)

One could see that all countries in this study levy prospective duties with the

exception of Vietnam which applies retrospective duties in special cases only. Further-

more, it seems that the prospective method was already in place in these countries at the

outset. There was never a significant change in policy.

Provisional and Retroactive Measures

Provisional anti-dumping measures are duties imposed on a dumped product

during the period of the investigation before a decision has been made to impose a

"definitive" anti-dumping duty. Article 7 enumerates the conditions in which provisional

anti-dumping measures may be imposed. An important condition as states in number 1

(ii) is that a preliminary affirmative decision has already been reached before imposing

provisional anti-dumping measures. According to Czako, Human (2003), the AD Agree-

ment is silent on the kinds of preliminary duties that it allows and it is left to national

practice. Commonly this may be an ad valorem, specific (a fixed amount on a per unit

basis) or variable duties (difference between the normal value and the export price).

Retroactive measures are tackled in Article 10 of the ADA. This article allows


for both the provisional and definitive application of retroactive measures for products

entered not more than 90 days before application provisional measures. All countries in

this study abide by this rule. Table 11 examines the provisional and retroactive measures

in place.

Table 11. Provisional and Retroactive MeasuresCountry Provisional duties Retroactive dutiesIndonesiaArticle 18, 19, 20 & 31

They may be paid in advance in the form of cash. The kind of duty preferred seems to be variable duty.

These may be collected if dumped goods were imported in huge quantities in a short time.

MalaysiaArticle 24 & 25 no. 7-8

They take the form of a security equal to the dumping margin. Duty takes the form of variable duty

These duties may be collected if dumped goods were imported in huge quantities in a short time. It may also be collected if injury is found to be difficult to repair or if the has been a history of dumping

PhilippinesParagraph f & m

Takes the form of a cash bond not greater than the provisionally determined dumping margin. Ad valorem duty seems preferred ("equal to the provisionally esti-mated anti-dumping duty")

Duties may be collected if imports were dumped at a high volume over a short time and if there was a history of dumping. Retroactive duties may not be collected if products were im-ported for the purpose of con-sumption.

ThailandPart IV Article 41-42 & Part VI 51, 53

Provisional duties may be applied or a cash bond collected. Duty shall not be higher than the prelim-inary dumping duty. Ad valorem duty is used and duty may be lowered over the course of the investigation if it is sufficient to remove injury.

Retroactive duties may already be collected after a preliminary determination is made.

VietnamArticle 20 & Article 23

Provisional duties will be paid in cash deposits or any other mea-sures prescribed by law. Ad valorem duties are applied which must not exceed preliminary dumping margins.

May be collected if it was found that there was a sudden surge in imports which may make injury difficult to fix.

All countries here make use of preliminary and retroactive duties aside from the

definitive duty. All systems also require that the preliminary duty must be paid in


advance be it in the form of cash or as a bond (or some other security) for variable duties.

All countries apply retroactive duties only if the dumped product was dumped quickly

and in high volumes in a short period of time. It is also worth noting that the detail

differs among their laws, for example, the Philippines is the only country in this study

that codifies the AD requirement in Article 10 no. 8 that no retroactive duties may be

levied on product entered for consumption prior to the date of initiation.

Initiation of Investigation

This procedure describes the process that a domestic industry has to follow in the

filing of an anti-dumping petition and the requirements it has to fulfill before the petition

becomes a full-fledged investigation.

The functional provisions in the ADA are located in Article 5 – "Initiation and

Subsequent Investigation" which describes the circumstances in which an anti-dumping

investigation can be initiated. Paragraph 1 of the agreement states that the investigation

to determine the existence and degree of dumping be initiated in the form of a written

application by the domestic industry. Paragraph 2 proceeds to describe the kind of

information necessary in the anti-dumping investigation, specifically the volume and

prices of the products in question in the places in which it is sold. Paragraph 4 requires

that sufficient support for the anti-dumping petition has been made by other domestic

producers (or at least 50% of the total production) before an investigation can be initi -

ated. Paragraph 6 states that authorities may initiate an anti-dumping investigation on

behalf of domestic industries only if the authorities have sufficient evidence that dumping

has probably occurred.

While it is not indicated in the ADA, some countries require that evidence must

also be submitted in the filing of a petition and some countries even provide assistance to

their domestic producers in order to comply with this.

A summary of convergence in this procedure is in table 12 below.

Table 12. Initiation of InvestigationCountry Summary of Rules SectionsIndonesia The petition is accepted by KADI, but the law does

not go into much detail about what the petition Article 8


should contain. Malaysia Written request for an AD investigation must include

sufficient evidence of dumping and subsequent injury. The decision to accept an application is done through voting.

Section 20 and all subsections (According to the 1998 amendment)Part II of 1994 regulations

Philip-pines

The request for an AD investigation must be done through a written application and must already include evidence of dumping and subsequent injury. Furthermore, the petitioner must pay a surety bond to answer for any damages which the importer may sustain by reason of the filing of a frivolous petition.

Par. b

Thailand Thai laws are also vague as to the filing process, simply requiring a written petition made in accor-dance with MOC regulations which have not been specified.

Article 33

Vietnam Request must contain information that describes the imported good, volumes, export prices for the past year as well as evidence that dumping and subse-quent injury is occurring. The applicant may also give a specific request as to the amount of duty, time limit and the extent of application of the instrument.

Article 9

As evident in the table above, there is some degree of divergence in the filing

process, or at least that the difference lies in the degree of detail in the laws. Some

require that positive evidence already be submitted before the petition is accepted, thus

putting the burden of proof on the domestic industry. The practice of Malaysia is also

rather unique in that the decision to initiate an anti-dumping investigation is done through

a vote in its anti-dumping authority.

Aside from convergence in this area, all anti-dumping regimes included in this

study allow for investigations to originate ex oficio. The inclusion of ex oficio initiations

in the legislation of the countries being studied is already widespread and can thus be said

to have converged.9

Determination of Injury

Determination of injury is how anti-dumping authorities link the existence of

9 The occurrence of an ex oficio in actual application of anti-dumping duty is very rare as the vast majority of initiations originate from domestic industries, at least in the countries being studied.


injury with the dumped product or how they demonstrate that there is a causal link.

Normally a country would consider what is known as price undercutting and price

suppression which is the lowering of prices and the prevention of a necessary increase in

prices as a result of dumped imports. Also considered are a reduction in the market share

of a domestic producer and the retardation of a domestic industry. Table 13 contains

provisions that describe injury as it occurs.

Table 13. Determination of InjuryCountry Summary of Rules SectionsIndonesia Indonesian law does not elaborate on what it considers

injury under its law except in the case of injury in the sense of preventing/retarding the establishment of an industry in Indonesia.

Article 1 no. 11

Malaysia Malaysia considers market share: actual and potential decline in output, sales market share, profits, produc-tivity, returns or investments as caused by the dumped product or any other factor other than dumping. It also considers price undercutting: actual and potential negative effects on cash flow, inventories, employ-ment, investment, wages, growth or ability to raise capital. The link must be demonstrable. This is done by seeing whether there has been an increase in the volume of dumped imports and if there has been significant price undercutting by the dumped imports.

Section15 no.1 (b)Section 21 (According to the 1998 amend-ment)

Philip-pines

Material injury takes the form of price undercutting. Injury is also considered to exist if it is found that there is a negative bearing in indices for that industry such as, but not limited to, actual or potential decline in output, sales, market share, profits, productivity, return on investments, or utilization of capacity; factors affecting domestic prices; the magnitude of dumping; actual and potential negative effects on cash flow, inventories, employment, wages, growth, and ability to raise capital or investments. A causal link between injury and dumping is demonstrable by looking at the volumes of imports and its effect on the prices of domestic products. The anti-dumping authorities are also to look for price undercutting or suppression by the dumped product.

Par. i

Thailand Depression of prices, decrease in market share, retardation of the development or establishment of a domestic industry comprise injury. This is determined by examining the volumes of the dumped imports and

Article 20-22


the effects of the dumped imports on prices in the domestic market for like products and, the consequent impact of these imports on domestic producers of like products. The investigating agency must also rule out factors that may cause injury and make sure that this is not attributed to the allegedly dumped import. The likelihood for dumping to occur is studied by looking at the exporting country's disposable capacity for the dumped product and the ability of other export mar-kets to absorb it.

Vietnam Material injury is the state of significant decline or growth restriction in terms of production capacity, prices and sales of goods, profit, production, employ-ment, investment and other indexes of the domestic industry, or the state of retardation of the establish-ment of a domestic industry. The Investigating authority is to consider the following elements to determine injury: The volume and prices of the non-dumped like products imported into Vietnam; The contraction in demand or changes in the patterns of consumption with respect to the domestic like prod-ucts; The export performance and productivity of the domestic industry and other elements deemed relevant.

Article 2 no. 7;Article 28 (According to Circular no 90/2005/ND-CP)

All countries basically consider price undercutting, decline of market share and

retardation of the development of an industry as indicative of injury. The laws, especially

Indonesia's differ in terms of the level of detail in them.

Article 3 of the WTO ADA also sets some standards for the collection and

examination of evidence to guide authorities in determining whether injury to the domes-

tic producers is actually occurring. Under this article, section 2 states that the anti-dump-

ing authorities have to consider an increase in the volume being imported of the dumped

product and if it has an effect on the domestic price of the good. Section 5 states that it

must be demonstrated that the alleged dumped product is actually causing injury. The

demonstration must reveal a causal link between the injury and the dumped product and

the authorities must use all relevant evidence to do so. Section 7 authorizes the imposi-

tion of dumping duties on the basis of a "threat" of injury under the standards enumerated

in the same section.


All countries consider volume increases and price suppression and/or price

undercutting by the dumped product. This, when combined with the country's definition

of injury can sound very similar if not identical in construction to the ADA. Compare the

provisions in the above tables with article 3.4 of the ADA:

The examination of the impact of the dumped imports on the domestic

industry concerned shall include an evaluation of all relevant economic

factors and indices having a bearing on the state of the industry, including

actual and potential decline in sales, profits, output, market share, produc-

tivity, return on investments, or utilization of capacity; factors affecting

domestic prices; the magnitude of the margin of dumping; actual and

potential negative effects on cash flow, inventories, employment, wages,

growth, ability to raise capital or investments. This list is not exhaustive,

nor can one or several of these factors necessarily give decisive guidance.

Determination of Normal Value

Normal value usually refers to the price of the good traded under ordinary circum-

stances within the country of origin. In investigations, if the export price is less than the

normal value, then dumping is said to be occurring.

Table 14. Determination of Normal ValuesCountry Determination of Normal Values SectionsIndonesia The law states the normal value is the normal price of

the good traded under ordinary circumstances in the exporting country. The law does not elaborate on how this normal value is supposed to be obtained/con-structed and evidence that may support it.

Article 1 no.3

Malaysia* In case normal value cannot be determined by looking at the prices at which the good is sold in the exporting country, normal value may be constructed by looking at the sales of that product in a comparable 3 rd coun-try. Alternatively, normal value may be constructed using an estimated cost of production (fixed and variable costs, production, marketing transport, etc) and adding to it a reasonable profit. The law discrimi-nates against non-market economies, which means that authorities have to use "appropriate methods" for determining normal value instead of what has been

Section 17 (1998 Amendment)


prescribed in law.Philippines Normal value simply refers to the price of the product

in the ordinary course of trade for the exporting country. If the normal value cannot be determined, GATT provisions are said to apply. Export price is the either the ex-factory price or F.O.B price at the point of shipment. If these two are not available or is unreliable, then export price may be constructed at a reasonable basis.

Par. s (2-3)

Thailand Normal value is constructed by looking at the prices of a batch of goods that represent no less than 5 percent of exports to Thailand. If this cannot be found or is unreliable, normal value may be con-structed by looking at the sales of that product in a comparable 3rd country or, by constructing the price based on reasonable costs and profits. If the product comes to Thailand from an intermediate country, normal value is to be constructed based on price information from that intermediate country. If this information is unreliable or unavailable, then the normal value will be taken from price information from the country of origin.

Article 15

Vietnam Normal value simply refers to the price of the product in the ordinary course of trade from the exporting country. If this is not available or is unreliable, normal value may be constructed by looking at the sales of that product in a comparable 3rd country or, by constructing the price based on reasonable costs and profits. The normal value of transshipped goods will be the prices in the country of origin if such information is not available from the intermediate country.

Article 4 no. 2-3

*Malaysian rules were further amended to include the construction of an average weighted cost for the product that should provide for the recovery of costs by the producer within a reasonable period of time. Evidence was broadened to include actual costs incurred by the producer for allegedly dumped product.

The laws seem to converge (with the exception of Indonesia due to its lack of

detail) on the methods of determining normal value which would involve looking at the

prices of the good in the course of normal trade and if such data is unavailable or unreli-

able a normal value may be constructed. Notable is the Philippine law section (n) which

says: "If the normal value of an article cannot be determined, the provisions for choosing

alternative normal value under Article VI of GATT 1994 shall apply."


Other Provisions

The anti-dumping laws of the countries described here have idiosyncrasies of

their own. It is worth discussing a few of them.

Regional producers are given status in Malaysia and Thailand, i.e. distinction is

given to some regions where the prices of a dumped import differ across regions whereas

in other countries in this study, the price is taken to be constant throughout the country.

In the case of Thailand, it recognizes that injury may not be present in all the parts of its

country. Malaysia also discriminates against non-market economies stating that the

determination of normal value need not follow the method stated in their anti-dumping

law, rather it is to be determined in an "appropriate manner". Other countries do not

make the same discrimination.

Philippines in its current law seems to be the only country that discourages the use

of anti-dumping for petitioners by making them pay the price of damages of an unsuc-

cessful/frivolous petition. The Philippines also imposes sanctions on importers guilty of

dumping. In the 1994 law, it even includes a provision to confiscate allegedly dumped

products and does not allow for undertakings.

It is hard to find any idiosyncrasies in Indonesian anti-dumping law, probably

because its rules are not very detailed, they are also very short. As noted, Indonesia

seems to give plenty of discretion to its investigating agency.

The impression that one would gain from looking at Vietnamese law is that it is

rather advanced. It contains provisions on almost every acceptable anti-dumping practice

and does not seem to contain any potentially conflicting practices either nor any signifi-

cant idiosyncrasies. It seems that Vietnam may have learned a lot from the practices of

other countries in anti-dumping.

Ease of use seems to be an important factor in the provisions that the laws tend to

take. The examples of this that have been presented so far include the treatment of


confidential information and transparency, and in the forms of duty being levied. An-

other example that has not been discussed previously is that all of the countries in this

study get their anti-dumping duty "prospectively" meaning that the dumping duty to be

levied over the course of the period of levy instead of "retroactively", meaning that an

estimate of anti-dumping liability is first determined and this forms the basis of the duty

which may change every year as a new estimate is determined. All this can take a lot of

time and money and can be too complicated given the experience of most developing

countries.

Another general trend has been towards greater GATT consistency. The Philip-

pines, Thailand and Vietnam exhibit this behavior. The Philippines made amended its

1994 law in 1999, Thailand did the same for its 1996 law in 1999 as well. Vietnam

passed a series of ordinances beginning in 1997 that became more GATT consistent until

it culminated in the 2004 ordinance. Despite this trend, there are still some GATT

inconsistencies in anti-dumping practice and provisions which are left vague.

Concluding Observations

The countries being studied here do not exhibit much divergence with regard to

the contents of their laws. This can be traced to their desire to be WTO consistent where

there is a need to be. It is also observed that at the very least they follow the minimum

obligations as stipulated in the ADA. At the same time there are differences (idiosyn-

cratic is another term for that) in their practices, especially where the ADA has been

silent. In the Philippine case, it managed to retain some inconsistent (even illegal)

provisions in their law. It should be pointed out that while countries converge at the

internationally agreed upon common ground, the underlying intent of their law is re-

flected in the way that the provisions are constructed, such as in the case of the Philip-

pines, authorities seem to discourage anti-dumping petitions through provisions that

discourage frivolous petitions. At the same time, countries like Thailand, Malaysia and

Indonesia, with no such provisions seem to actually encourage the use of the instrument.10

10 This is corroborated by looking at anti-dumping statistics. In the data set generated by Chad Bown (2010), the Philippines since 1999 had only a total of 9 initiations only around 3 had positive determina-tions. Contrast this with Indonesia, Malaysia and Thailand whose filing and affirmative decision statistics


With regard to the institutional arrangement that the countries set up, they all

tended towards centralization. Commonly it is the minister of trade and industry (DTI,

MITI and MOIT), the minister of finance through its customs arm handles the collection

of duties and provisional anti-dumping measures.

All countries being studied today can be said to be using neoliberal economic

framework to varying degrees. Vietnam has its Doi Moi, Thailand likewise has aban-

doned ISI early on. The Philippines has been trying to liberalize its economy since the

late 1970s, but to the present day has some bottlenecks in liberalization especially with

regard to the present constitution which is perceived to be anti-globalization. Malaysia

on the other hand was an early leader in economic liberalization.

The best evidence for saying that these countries have embraced neoliberal

economics is in their joining of various international, regional and bilateral trade agree-

ments, notably the WTO and AFTA

Thailand, Indonesia and Malaysia have merged their countervailing/anti-subsidy

laws together as one piece of legislation. This has the advantage of being able to use the

same institutions in handling both kinds of cases and which may help foster efficiency

and institutional capacity especially in the area of information gathering. Likewise, one

of the salient features of the Philippines' Anti-Dumping Act of 1999 was to establish

common legal provisions with its countervailing and safeguards measures such as pre-

scriptive periods.

are in the double-digits.


CHAPTER VI

MECHANISMS OF CONVERGENCE

The aim of this chapter is to present and discuss the mechanisms of convergence

that were present and that may have influenced changes in anti-dumping laws in the

countries in this study. The researcher found out that among the mechanisms present,

International Harmonization through the WTO ADA is the primary mechanism present.

Transnational Communication was found to have occurred through the WTO Committee

on Anti-Dumping Practices (ADP) although it seems that the communication reinforces

the mechanism of International Harmonization. Regulatory Competition occurs through

Domestic Pressure but it happens more of as policy experimentation rather than as a race

to the top or bottom.

A. International Background

Anti-dumping laws only started to proliferate during the 1980s and 1990s. What

was the international situation that caused this proliferation? During these decades there

was a radical change in the way countries traded with each other. Economic liberaliza-

tion in one form or another was being adopted by economies all over the world. As a

result, countries began to abandon traditional means of trade protectionism such as tariffs

and quotas. In the face of this and with the continuing need to have trade protectionism,

countries—especially those of the developing world—had to find new ways to protect

their industries from foreign competition. Not only did these laws proliferate, they ended

up adopting similar procedures and concepts. The wording in many cases is very similar

to the construction in the ADA.

The multilateral system, as exemplified in the GATT and the WTO was instru-

mental in creating an environment that was conducive to economic liberalization. Also

under the WTO system, the use of anti-dumping was allowed as a concession to the


member economies that needed to be able to provide protection to domestic producers

when needed (at least the need arose as a result of the Uruguay round negotiations). The

GATT Anti-Dumping agreement was developed in order to manage the use of anti-dump-

ing by member countries. The Anti-Dumping Agreement itself developed over time

beginning with the Kennedy Round in the mid 1960's. The Tokyo Round was able to

come up with an Anti-Dumping code in 1979. This code first recognized that anti-dump-

ing is only justifiable if a dumping case threatens or causes actual material injury to an

established industry or prevents the establishment of an industry. The code justifies itself

by asserting that it is desirable to have "equitable and open procedures as the basis for a

full examination of anti-dumping cases" and that it would facilitate the carrying out of

dispute settlement of anti-dumping disputes. This Anti-Dumping code is much shorter

and less detailed than the current one and lacks some measures such as sunset reviews,

transparency provisions and rules on judicial review. This is understandable given that

the old code is only composed of 10 pages compared to the Uruguay Round Agreement

which is composed of 26 pages. This code led the way for the creation of the Committee

on Anti-Dumping Practices which allows member countries to consult it regarding the

operation of the agreement. The Uruguay Round anti-dumping agreement is much more

detailed and built on.

As noted the adoption of anti-dumping laws can be the result of wanting to protect

not only against dumped imports but also to counter the sanctioning of exports (Naka-

gawa, 2007). Anti-dumping can be seen as a tit-for-tat strategy or as strategic retaliation.

However, this system of economic liberalization and the role of the WTO in it

only explains the proliferation of anti-dumping regimes (and subsequently similarities in

patterns of adoption and amendment of their legal bases) and convergence in procedures

that are explicitly discussed in the ADA. It does not explain convergence in areas not

covered by the ADA.

The following section intends to discuss the evidence of some of the mechanisms

of convergence in light of the preceding chapters:


B. Existing Mechanisms of Convergence

Political Demand or Pressure – Is the stimulus that leads to the convergence

policy through the imposition of laws from another power. In the case of anti-dumping,

the author has not found any evidence that a more powerful country has actively put

pressure on any of the countries being studied to adopt or revise any provisions in their

anti-dumping laws. One reason for the absence of pressure is in the very nature of anti-

dumping laws: they are protectionist measures with "unlimited uses" one of which is

retaliation (Barral, 2003). It would be against the interest of the pressuring state to apply

the pressure. In the case of the Philippines, as the Anti-dumping act of 1999 was under

deliberation in the lower house, the issue of whether any representative of a foreign state

ever approach them regarding anti-dumping law reforms came up. As this issue was

raised, the sponsors of the reform asserted that there was no such pressure. Political

pressure however seems to exist in the compliance of countries to WTO requirements,

specifically the ADA. Because political pressure seems to be directed towards compli-

ance of WTO, the pressure takes place within the context of the organization which

means that the countries doing the pressuring are exerting it through bodies, mechanisms

and arrangements created by that organization. In the case of anti-dumping laws, this

body would be the Committee on Anti-Dumping Practices.

International Legal Obligation – This is the stimulus that leads to policy conver-

gence through compliance with international law and other agreements. Holzinger, Knill

and Sommerer (2008) in their empirical study use the ordinal metric of ascension to an

international organization. This is too simplistic however as once established, institu-

tional arrangements will constrain and shape the domestic policy choices, even as they

are constantly challenged and reformed by their member states. Member states also

engage in international organizations voluntarily and actively seek to influence corre-

sponding decisions and arrangements, the impact of international harmonization on

national policies constitutes no hierarchical process; it can rather be interpreted as "nego-

tiated transfer" which makes it the intermediate between international harmonization and

transnational communication (Dolowitz and Marsh 2000).


Competitive Pressure – is the stimulus that leads countries to adopt similar

policies because the country wants to be more competitive relative to other countries.

What the author is looking for is evidence that a country adopted a law or a provision

based on the intention of economic benefit or as a retaliatory measure. There are a

number of instances when competitive pressure seemed to play a role in a change in anti-

dumping law and it also seems very closely related to the occurrence of domestic pres-

sure since the lobbying of domestic groups may be triggered by poor trade outcomes

which may have been avoided with "good" anti-dumping legislation. This is actually

seen in the Philippine anti-dumping case of hot rolled coils from Russia. This is interest-

ing because as the investigation was ongoing in 1999, Philippine steel producers sent

their representatives to House of Representatives to discuss their concerns. This is also

seen in the case of the lobbying of Indonesian business groups towards a more empow-

ered KADI.

Transnational Communication – The author believes that the WTO Trade Review

Mechanism and the Committee on Anti-Dumping Practices are examples of lesson

drawing. Under the Committee on Anti-Dumping Practices, countries may send ques-

tions and clarifications to that body with regard to anti-dumping practices and procedures

who would then try to reply as soon as possible with a solution that is consistent with the

WTO.

It can be argued that the WTO is more of a "negotiated transfer" and, as the case

has shown, some members may be willing to tolerate a certain degree of inconsistency in

their law. Thailand, since it has made quite a number of anti-dumping investigations and

is the target of many investigations itself it is not surprising that it is rather active in the

Committee of Anti-Dumping practices. The country itself has come under numerous

dispute settlement procedures, pressure from these procedures which have challenged the

legitimacy of certain of its anti-dumping measures may have led the government to

model their anti-dumping law very closely with the GATT Anti-Dumping Agreement as

has been claimed in Chapter V.

Given these assumptions of how governments are expected to act in the presence


of the mechanisms of convergence, the rest of this chapter will describe evidence of the

existence of these mechanisms and the effect they had on anti-dumping regimes.

C. GATT/WTO as the Context of Political Demand, International Harmoniza-

tion and Transnational Communication

This section aims to situate the mechanism of international harmonization and

transnational communication within the context of the WTO. International harmoniza-

tion, as discussed in the theoretical framework is the mechanism that uses the stimulus of

international legal obligation in order to achieve the response of compliance with the said

international law. In this case, it refers to the adoption of WTO consistent procedures

and practices and even WTO wording in an anti-dumping law.

WTO membership on its own does not require a country to have an anti-dumping

law; it merely establishes a right to have anti-dumping laws. The Anti-Dumping Agree-

ment is there to ensure that members follow the same procedures and practices. And as

noted earlier, it was fairly easy for many new users to institutionalize anti-dumping laws

by simply copying the agreement. In the words of Junji Nakegawa (2007), the anti-

dumping agreement in itself, "has had some catalytic effect on anti-dumping prolifera-

tion." One can actually see this in the cases of the Philippines, Malaysia, Thailand and

Indonesia whose laws (at least in their English translation) use the same terms and the

same methods and procedures as the Anti-Dumping Agreement.

However, WTO membership does not automatically imply harmonization of laws.

It may take a bit of prodding; one reason for the convergence of laws is that the WTO

also facilitates transnational communication among countries. Transnational communi-

cation according to the framework is broken down into the stimuli of: Problem pressure,

which comes from when countries try to learn from the experiences of countries facing

the same problem and then copying a model found elsewhere (i.e. lesson drawing); Par-

allel problem pressure which comes from when countries facing a common problem

work out a common policy model and adopt it; Emulation in which a country's desire for

conformity leads them to copy widely used policy models and; International policy


promotion which occurs when a country facing the need to legitimize s policy regime,

adopts a model recommended by the international community.

In the case of the WTO, the Committee of Anti-Dumping Practices (ADP) acts as

a forum in which members countries can facilitate lesson drawing and exert legitimacy

pressure by serving as a venue for countries to question one another's legislation without

having to go through the dispute settlement process. It must be noted that the ADA itself

is also a model developed by developed and developing countries in order to manage

possible difficulties they may face in economic liberalization. Compliance in this way

also depends on the "communicative potential" of the organization, to use Holzinger,

Knill and Sommerer's term which refers to how often meetings with representatives are

scheduled and how often members inform one another of the status of compliance.

The following sections will examine some of the communications that were

delivered to the countries in this study that have to do with anti-dumping procedures.

This method is not novel as it has already been featured in Ito and Yoshikawa (2007).

Indonesia

The researcher noted that Indonesia's anti-dumping laws were rather vague and

silent on many aspects of anti-dumping as stipulated in the ADA and other aspects of the

procedure, the governments of other countries seemed to notice this as well and they

endeavored to seek clarification from Indonesia on this vagueness. Early in the year

1997, Indonesia received a series of communications from the WTO Committee on Anti-

dumping practices, these questions were being posed by the European Community, Hong

Kong, Korea, Turkey and US. Indonesia responded to these questions in a communica-

tion dated May 27, 1999.11

It was revealed that the main concern of the EC was on certain procedures related

to the timing of the collection of provisional anti-dumping duties and reviews. They also

raised one question on the collection of retroactive duties. From Indonesian law, it

11 G/ADP/Q1/IDN/6 – G/SCM/Q1/IDN/6


appears to be that if the relevant goods are found to be dumped that the first part of the

test for retroactivity (a history of dumping) would already be met. Indonesia's replies to

all of these concerns served to reassure the EC (and other parties reading the communica-

tion) that Indonesia would not violate the ADA.

Hong Kong wanted to know what the status of the ADA was to Indonesia. For

example, if Indonesian legislation is in conflict with ADA, which one would take prece-

dence? The reply of Indonesia was that the officials concerned would apply domestic

laws in compliance with the agreement. Hong Kong also asked Indonesia as to what

procedures it has in place for Judicial Review to which Indonesia replied that they have

the Appeals Institute in place for these matters. Hong Kong was also concerned regard-

ing the numerous provisions of the ADA which are absent in Indonesian legislation. The

communication listed the following notable examples:

- establishment of normal value (ADA Article 2.2)

- notion of fair comparison and provisions (ADA Article 2.4)

- exchange rates (ADA Article 2.4.1)

- comparison methodology (ADA Article 2.4.2)

- determination of injury (ADA Article 3.1, 3.4 and 3.5)

- threat of material injury (ADA Article 3.7)

- standing of complainant (ADA Article 5.4)

- de minimis dumping margin and negligible imports for immediate termination

(ADA Article 5.8)

- provision of full text of written application to the known exporters, the exporting

country and interested parties (ADA Article 6.1.3)

- newcomer review (ADA Article 9.5)

With the absence of these provisions in their legislation, Hong Kong asked how

Indonesia proposes to ensure compliance with the ADA and whether it contemplates

legislative steps to further bring its legislation into compliance with ADA.


Korea had a similar question to Hong Kong: That the Indonesian AD regulations

as a whole seem to be lacking in many issues compared to the WTO AD Agreement. It

has been noted that there is a lack of clarity regarding the following issues in particular:

-Market visibility

-Start-up cost adjustment

-SG&A, profit for constructed value

-Adjustments to export price and normal value

-Level of trade adjustments

"How will Indonesian authorities deal with these technical criteria?" the Commu-

nication from Korea asked. The Indonesian authorities replied to this question by reas-

suring Korea that it would fully comply with all the requirements of the WTO Agreement

and that these may necessitate some amendments but in meantime, the anti-dumping

proceeding brought to date, scrupulously adhere to all aspects of the Agreements.

In 1999, the Indonesian authorities decided to give the jurisdiction over judicial

review of anti-dumping to the Tax Dispute Settlement Board from the Appeals Institute.

Naturally, the Americans and the Argentineans would like to know what anti-dumping

had in relation to Indonesian Tax laws when it was supposed to be covered by Customs

law and how this fits with the ADA.12 Indonesia's reply in the same communication:

The Tax Dispute Settlement Board has the full jurisdiction over the decisions of the Indonesian Anti-Dumping Committee. Article 35 of Government Regulation 34, 1996, confirms that the Anti-Dumping legislation is part of the Custom Laws which falls under the Tax Law of Indonesia.…The Ministry of Finance does not have authority over the Agency, as the role is limited to one of administration. The Judge is independent and approved by the President.

Malaysia

When the 1993 anti-dumping law and subsequent enabling regulations were first

notified to the WTO in 1995, there did not seem to be any vague provisions or inconsis-12 G/ADP/Q1/IDN/13 – G/SCM/Q1/IDN/13


tencies needing clarification. The only notification that Malaysia received before its

1998 anti-dumping law amendment was from Turkey which only requested that it be

provided a timeline of its investigation in 1997.13

In 1998 after Malaysia notified WTO of its 1998 amendments to the anti-dumping

law, it received requests for clarification from the EC, Japan and the US.

The EC wanted to know what Malaysia meant by a "non-market economy" and

how one says that it is a non-market economy. Another question the EC had, together

with Japan was regarding Malaysia application of its public interest provision and if it

could lead to the modification of a duty. Malaysia assured the EC that when determining

if it is a non-market economy, they have several objective criteria and that it would be

determined on a case-by-case basis. The public interest provision on the other hand

should take into account the interest of the consumer and downstream producer of the

product while at the same time trying to promote a competitive business environment.

The public interest clause unfortunately is not based on any written criteria.

The 1998 amendment of Malaysian law as the United States observed broadens

the definition of "interested parties" by adding that "any other party as the Government

deems appropriate" may be treated as an "interested party". The US is interested to know

what kind of groups Malaysia intends to grant interested party status to in amending this

provision and what criteria Malaysia will use to determine when it is appropriate to grant

this status. Malaysia replied that it intends to provide for parties such as end-users and

processors of the subject merchandise. The criteria that Malaysia uses is simply whether

the party will be affected by the dumping action.

The United States was also rather interested as to the disclosure of confidential

information in Malaysia. According to the 1998 amendment of its law, the act ensures

that the Malaysian anti-dumping and countervailing duty authorities will provide all

interested parties opportunities to see all relevant non-confidential information. The US

13 G/ADP/Q1/MYS/2 – G/SCM/Q1/MYS/2


wants to know if Malaysian authorities "offer" access to confidential information even if

it would go against the ADA. Malaysia replied that it does not offer and generally does

not provide confidential information. Apparently, this response got the US' attention as it

sent another communication to Malaysia not long after receiving the above reply. The

communication contained more questions regarding the treatment of confidential infor-

mation.14 The first question was whether Malaysia could cite any instance that Malaysia

granted a party access to confidential information. To which Malaysia responded that it

has never done so. US then asked what kind of procedural safeguards Malaysia will

follow in granting access to confidential information. Again, due to the lack of experi-

ence, Malaysia does not have any procedural safeguards. Furthermore, when asked,

Malaysia responded that it is currently not examining any procedures that would provide

confidential information.

As seen in the case of Malaysia, there were many questions on how Malaysia

intends to implement its laws. This is valuable information for other countries as they get

to know the practices of another country and to learn from it (since practically everyone

has access to these communications)

Philippines

In 1996, the Philippines received a series of questions from Argentina, Australia,

EC, Hong Kong and the US regarding its anti-dumping law which at the time was the

Anti-Dumping Act of 1994.15

The main observation that Argentina, Australia, EC and Hong Kong made is that

there may be several inconsistencies between the 1994 anti-dumping law and the ADA.

Hong Kong listed the following possible inconsistencies:

-Paragraph (a) authorizes the Commissioner of Customs to hold the release of the questioned importations. Article 5.9 of the Agreement provides that an AD proceeding shall not hinder the procedures of customs

14 The questions and Malaysia's replies are in G/ADP/Q1/MYS/8 – G/SCM/Q1/MYS/815 The questions of these countries and Philippine responses are in G/ADP/Q1/PHL/1 – G/SCM/Q1/PHL/1


clearance.

-Paragraph (a) provides for imposition of provisional measures upon determination of a prima facie case of dumping within 20 days from receipt of petition or information. Article 7.3 of the Agreement provides that provisional measures shall not be applied sooner than 60 days from the date of initiation of the investigation and Article 7.1 thereof provides that such measures may be applied only if the conditions set out therein are fulfilled.

-Paragraph (b) requires all parties concerned to submit their respective memoranda within 15 days from notice. Article 6.1.1 provides that ex-porters or foreign producers shall be given a minimum period of 30 days for reply to questionnaires.

-Sub-section D authorizes collection of dumping duties on dumped articles and sub-section E provides that all importation of like articles within 150 days immediately preceding the filing of the protest are covered by the investigation. Article 10.6 of the Agreement however provides that subject to certain conditions, a definitive anti-dumping duty may be levied on products which were entered for consumption not more than 90 days prior to the date of application of provisional measures. Article 10.8 further provides that no duties shall be levied retroactively prior to the date of initiation of the investigation.

-Sub-section E provides that the dumping duty shall be equal to the difference between the actual export price and the normal value actually existing at the time of importation as determined by the Commission. Sub-section L provides that the established dumping duty shall be subject to adjustment based on whichever higher of the prevailing normal values as defined in paragraph b-1. Article 9.3 of the Agreement provides that the amount of the anti-dumping duty shall not exceed the margin of dumping as established under Article 2. Accordingly, the applicable normal value for the establishment of dumping margin should be the latest one deter-mined, not necessarily the higher one.

-Sub-section O.2 defines the various elements of "cost of production" including administrative, selling and general expenses, shipment - related expenses and profit, but artificially limits their minimum level to certain percentages of the production costs. Article 2.2.1.1 of the Agreement however requires cost be normally calculated on the basis of actual records.

Furthermore, numerous provisions of the Agreement are apparently not reflected

in the Philippines legislation, or the codification may not be adequate. Notable examples


are as follows:

- sufficient domestic sales (Article 2.2 and Footnote 2)

-establishment of costs (Articles 2.2.1 and 2.2.2)

-notion of fair comparison and relevant provisions (Article 2.4)

-exchange rates (Article 2.4.1)

-comparison methodology (Article 2.4.2)

-cumulative assessment of injury (Article 3.3)

-threat of material injury (Article 3.7)

-standing of complainant (Article 5.4)

-on-site verification (Article 6.6, 6.7 and Annex I)

-sampling (Article 6.10)

-duty for exporters and producers not selected in sampling (Article 9.4)

-application of best information available (Annex II)

The Philippines clarified all those who asked regarding ADA consistency that the

1994 anti-dumping law actually precedes the ADA in terms of ratification. In case of

conflicts, the administering government agencies have the flexibility to use the ADP

Agreement as a guideline for implementation. New implementing rules and regulations

will be issued if there is a strong need for it.

Australia also wants to know whether the Philippines plans to revise its legislation

or to issue regulations. The Philippines simply replied that the administrators have the

flexibility to implement provisions from an international agreement and that parties may

seek a review of decisions by these authorities within regular courts.

One question raised by EC is In relation to normal value, why have the Philip-

pines not incorporated the detailed provisions of the Agreement, particularly in relation to

sales at a loss, constructed value and fair comparison? The reply was that while the Act

does not explicitly stipulate such detailed provisions, the agency concerned will adopt the

ADP Agreement as its principal guideline in the course of its analysis and evaluation of

the case.


In 1999, the Philippines enacted the Anti-Dumping Act of 1999 which effectively

replaced the 1994 act. This new law addresses some of the inconsistencies pointed out by

Hong Kong such as the withholding of goods at customs, time limits for questionnaires,

and normal values to be used in determining the rate of duty. Thus this communication

may have influenced what provisions were included in the 1999 law.

In 2002, the EC and the US sent questions to the Philippines to ask about this new

law.16 In the communication, the United States wanted the Philippines to describe the

circumstances in which the Philippine government can revoke the importer's license or

charter for those guilty of dumping as well as disqualifying its officers from holding

official positions in corporations in the Philippines and the imposition of a fine equal to

twice the definitive anti-dumping duty (Sec. 4 of the 1999 Anti-Dumping Act). The

government replied that this provision is only active after a final determination has been

made.

Thailand

Thailand received numerous questions regarding its 1996 Notification on Anti-

dumping. According to Ito and Yoshikawa (2007), the questions were mostly about the

scarcity of provisions vis-à-vis the Anti-Dumping Agreement. The other countries were

simply worried that the absence of certain provisions would translate to arbitrary admin-

istration by the Thai anti-dumping authority. The 1999 act also received notifications

with the comment that the 1999 act is basically identical to the 1996 Notification.

Thailand commented that it has passed five ministerial regulations that cover the insuffi-

cient parts of the act although up to now, English translations of these regulations have

not been sent to the WTO.

What can explain the countries' eagerness to communicate with Thailand regard-

ing its laws? This may have something to do with its history of anti-dumping. Note that

the countries that notified Thailand were Canada, EU, US, Hong Kong, Korea, Poland,

16 The questions of these countries and Philippine responses are reproduced in G/ADP/Q1/PHL/4 – G/SCM/Q1/PHL/4


Turkey and Argentina. Canada, EU, US and Argentina in particular are among the

traditional users of anti-dumping and questions from these countries must have carried

much weight.

Vietnam

Vietnam has not relieved any questions regarding their anti-dumping instrument

and this may be due to the fact that the country has just sent its notification to the WTO

in 2009. Vietnam did send a report to the WTO in 2006 detailing the progress that it has

made in its trade policies, including anti-dumping.17 The report noted that at the outset,

Vietnam had no provisions on anti-dumping, countervailing duty or safeguard measures in

its legislation and that they needed to establish a proper legal and institutional framework to

enforce provisions on anti-dumping and countervailing measures and that the 2004 ordi-

nance on anti-dumping (and other implementing regulations) were made for this. Vietnam

confirmed that his Government would ensure that any legislation in place at the time of

accession providing for the application of measures taken for safeguard, anti-dumping or

countervailing duty purposes would be in conformity with the provisions of the WTO

Agreements on Safeguards, on Anti-Dumping and on Subsidies and Countervailing Mea-

sures.

Some Observations

A summary of the questioning that occurred in the ADP and the policy outcomes

are provided in table 15 below.

Country Nature of Questioning and Policy ResultsIndonesia Repeated assertions that it would follow international law in practice even though

its laws contain many contentious provisions or stays silent.Malaysia Countries requested clarification as to how it would apply confidentiality and

interested parties provisions. Questions relating to ADA consistency were not brought up.

Philip-pines

There were questions of WTO consistency in the 1994 law. Some provisions such as the withholding of goods at customs, time limits for questionnaires, normal values to be used in determining the rate of duty were addressed in the 1999 law.

17 WT/ACC/VNM/48


Thailand The main issue raised by other members against Thailand was the lack of detail in its laws vis-à-vis the ADA. Thailand noted that it has already passed legislation that addresses this lack of detail.

Vietnam Being the last country in this study to have adopted anti-dumping laws, one can assume that it has benefitted from years of studying anti-dumping laws, commu-nications from the ADP and anti-dumping jurisprudence.

The ADA is an example of a commonly developed policy model, the existence of

which already suggests that there was a transnational problem on the controlling anti-

dumping at the outset.18 The WTO Committee on Anti-Dumping Practices on the other

hand, seems to provide a venue for countries through its legislation notification system to

inform one another of legislation being passed on anti-dumping and an opportunity to ask

for clarifications among the members. In this way, the ADP facilitates lesson drawing

and international policy promotion (i.e. exerting legitimacy pressure). Another observa-

tion is that the countries most commonly asking for clarification on the anti-dumping

laws of these countries are the traditional users: The EC, US, Argentina, Canada and

Australia. Hong Kong and Turkey are also rather active in asking for clarifications. This

mechanism seems to fall short of being considered political demand or pressure because

the countries in these communications do not resort to political or economic sanctions or

incentives to achieve compliance, although it still seems that these traditional users have

much at stake in ensuring that the other countries comply with international agreements.

This is why it seems that the communication occurring among countries with regard to

anti-dumping seems to reinforce compliance with international agreements.

Another observation that needs to be made is that the ADP is not the only venue

in which the WTO and its members exert pressure on other members to change its laws

and practices. There is also the Dispute Settlement Body (DSB) in which countries can

challenge another country's laws and practices and force them to change it. The DSB was

not mentioned in the country cases because none of the five countries being studied ever

had their laws challenged in the DSB. In fact, the only instance a law was ever chal-

lenged in this manner was the case of United States – Anti-Dumping Act of 1916 by the

18 This suggests the dual nature of the ADA which aside from being a commonly developed policy model is also a legal obligation for members who agreed to it. In Chapter VII, the researcher will suggest that the ADA is actually an example of a "negotiated transfer."


European Community and by Japan in 2000.19 The issue in this case was that the 1916

anti-dumping act of the United States needed to be repealed because it contained provi-

sions that allowed for civil actions and criminal proceedings on importers who have been

found to practice dumping which is not allowed under WTO rules. The decision of the

appellate body was to compel the US to repeal the contentious law which was completed

2004.

Another dispute case in anti-dumping is the practice of "zeroing" by American

anti-dumping authorities which violates Article 2.4 of the ADA. Zeroing is the practice

which can lead to an overestimation of a dumping margin. This is an ongoing case with

the potential to make the practice of zeroing illegal and in which case will force users of

anti-dumping to conform in its non-practice.

These cases, while they do not directly affect the anti-dumping legislation of

ASEAN countries, nonetheless serve as lessons for them to follow. Furthermore, as the

body of anti-dumping jurisprudence grows larger, anti-dumping rules and practices may

also change or otherwise become more constrained.

D. Anti-Dumping: "Race to the Top" or "Race to the Bottom"?

Regulatory competition occurs when countries facing competitive pressure

mutually adjust their policies in order to promote the competitiveness of domestic indus-

tries or to attract more business activity from abroad by engaging in a race with other

countries to relax regulatory standards (hence "race to the bottom"). According to Knill

(2005) however, a "race to the top" can also occur when countries increase regulatory

standards such as in policy areas like standards and conformance.

Anti-dumping as a trade protection measure can engage in a race to the bottom by

making it difficult or restrictive for a petitioner to have an investigation and to get a final

decision such as by placing the burden of evidence on the petitioner, or by imposing so

many requirements for an investigation. This also applies to the country being investi-

19 The appellate report of the case is WT/DS136/AB/R – WT/DS162/AB/R


gated through provisions such as price undertakings, retrospective provision of duties,

etc. Basically, many of the provisions in the ADA embody this race to the bottom by

ensuring that countries stick closely to international standards in the investigation, the

agreement ensures that international trade still goes smoothly in spite of the many anti-

dumping duties currently being enforced or investigations taking place.

It may also work as a race to the top. The "top" in this case is in terms of the

protection that a country can give its domestic industries. One example may be when

governments give more discretion to government agencies to come up with a higher rate

of positive determinations. Also, a government may offer aid to any industry seeking an

anti-dumping investigation.

The case of Vietnam is an interesting example of regulatory competition leading

to the adoption of anti-dumping laws. Le and Tong (2009) assert that the anti-dumping

duties being imposed on nearly 30 of its top export items and the inability of its producers

to effectively respond to these dumping allegations led the government to pass an anti-

dumping law as well as measures to protect its producers against countries seeking to

impose anti-dumping duties on it. Indonesia must have had a similar experience as

Vietnam, that many countries were imposing anti-dumping duties on its products, such

that it was forced to pass an anti-dumping law of its own. Interestingly, one of the

responsibilities of the Indonesian Anti-Dumping Committee (KADI) is to formulate

strategies and measures to cope with export goods alleged to be dumped by a foreign

country (Art. 3 & 4(d) of Decree No. 136)

Specific examples of amendments to laws that can serve as evidence of a race to

the top is the rearranging of the institutions that handle anti-dumping in Indonesia and the

Philippines. In Indonesia, the composition of KADI was changed so that a representative

from the Ministry of Trade no longer holds the chairman's position. This serves to make

the institution more independent of government, which can have the effect of making it

seem that an affirmative decision was not influenced by people in positions of political

power. Furthermore, as noted in Chapter V, there is still pressure from business groups,

especially in the steel industry, to give even more power to the KADI by bypassing the


Ministry of Trade in actually implementing the final decision. The Philippines, in

changing the anti-dumping authority from the Department of Finance to the Department

of Trade and Industry, was also trying to make anti-dumping investigations proceed more

efficiently by placing at the forefront an institution that deals specifically with trade

issues rather than an institution that is concerned with finance issues.

What the researcher observes with anti-dumping is that the laws still try to stick to

procedures and institutional arrangements commonly accepted in the international

community, as seen in the analysis of laws in the previous chapter. Some authors, have

noted that while at the surface, the laws seem to conform to international agreements, the

ADA itself left much to interpretation and in practice, the anti-dumping regime may

exhibit divergence (Aggarwal, 2007). It was noted in an earlier footnote that there is

divergence in practice among the countries in this study with the Philippines having the

fewest number of anti-dumping investigations and dumping duties levied compared with

Thailand, Malaysia and Indonesia which are all in the top 20 users of anti-dumping (no

data for Vietnam) (Bown, 2010). It is interesting to note that Indonesia has filed the most

anti-dumping petitions of all the countries in this study and has been the target of the

most investigations as well and this may have something to do with the seemingly high

amounts of discretion it gives to the anti-dumping authority and how its laws are less

detailed than other countries in this study.

The point is that while laws may seem to say one thing, practice may actually

differ. This does not mean to say that the pressures do not try to influence the text of the

law. These pressures came largely from domestic sources. Junji Nakegawa (2007) noted

that certain industrial sectors were quite successful in lobbying for anti-dumping mea-

sures. The steel industries in both the Philippines and Thailand have both lobbied for

anti-dumping measures (Nakegawa, 2007). In the case of the Philippines, it was because

steel producers were facing cheap Russian steel. Nakegawa calls this anti-dumping as an

industrial policy or anti-dumping with a constituency.

This assertion is corroborated in the work of Blonigen and Prusa (2001) for the

traditional users of anti-dumping. According to them, traditional users of anti-dumping


laws frequently amend their anti-dumping laws, almost always to make anti-dumping

protection easier to grant. Not only does AD law allow politicians to offer politically

preferred industries without blatantly violating GATT/WTO principles, but they can also

tinker with the rules to broaden the scope and availability of AD protection. According

to Blonigen and Prusa (2001), the US has amended its AD laws at least six times in the

past 25 years. According to them, for politically powerful industries, losing a case is not

a sign that trade was conducted fairly but rather, it is taken as a sign that the law needs

amending.

What this means is that domestic pressure is actually closely linked to the mecha-

nism of regulatory competition in the direction of the regulatory "top". Without these

pressures, government would have no incentive to make their laws afford more protec-

tion.

E. Summary

The researcher found evidence that competitive pressure led to the adoption and

further reform of the anti-dumping laws being studied. In the cases of the Philippines and

Thailand where existing anti-dumping policies were deemed as not being effective

enough and were thus amended. Indonesia made changes to its institutional arrangement

possibly to afford a better chance for petitioners to get an affirmative decision. For

Vietnam, having anti-dumping duties imposed on their producers may have prompted

them to make anti-dumping laws of their own in order to retaliate among other things. A

stronger mechanism for convergence in this study however would have to be Interna-

tional Harmonization, at the same time Transnational Communication plays a role in

ensuring compliance with international agreements. One observation that can be made

regarding the communications sent to the countries in this study is that the traditional

users of anti-dumping (i.e. the US, EC, Argentina, etc.) seem to prefer higher levels of

detail in their laws and that they do not like giving much discretion to anti-dumping

authorities.


CHAPTER VII

POLICY CONVERGENCE IN PHILIPPINE ANTI-DUMPING LAW

So far, the study has discussed the state and direction of convergence in anti-

dumping and the mechanisms that were found to have influenced the convergence. The

process of convergence will be better informed by looking at the evolution of Anti-dump-

ing law in the Philippines. The Philippines is a typical case in Southeast Asia since its

laws and the history of the changes that its laws underwent are very similar to other

countries in this study, as seen in the previous chapter. Therefore, one would expect that

whatever pressures that caused Philippine laws to converge with the other countries is

present there too. Thus looking into the pressures present in the Philippine case will help

one understand the situation overall.

The goal of this section is to show which pressures have been registered in the

Philippine policy making process and how the Philippines has responded to these pres-

sures.

As mentioned in a previous section, the Philippine has had three anti-dumping

laws. The first was section 301 of the Tariff and Customs code, followed by R.A. 7843

(Anti-dumping act of 1994) and R.A. 8752 (Anti-dumping act of 1999) which were

applied as amendments to section 301 of the Tariff and Customs code. The author is

concerned with the changes that took place in the laws and the reasons why the legisla-

tors found they had to change them. In order to do this, the author relied mostly on a

reading of minutes of meetings of the lower house and the senate as they deliberated the

contents of the anti-dumping law of 1994 and of 1999 as well as some related laws such

as the ratification of WTO, the deliberations of which were taking place at the around the

same time as the anti-dumping law of 1994, the discussion of which was thus colored and


the debates heated with references to the WTO ratification.

A. Anti-Dumping Act of 1994

The Anti-Dumping Act of 1994 originated the lower house, the deliberations of

that bill in congress was just short as it only took them one day before they agreed to send

it to the senate for their deliberations. The congressmen did not discuss any procedural

and methodological issues and merely asked what is meant by dumping, the rationale

behind anti-dumping law and why it is beneficial to have an anti-dumping law. In the

senate, discussion was livelier; (perhaps it was because the anti-dumping law was being

discussed at the same time as the ratification of Philippine accession to the WTO ). The

deliberations over the AD law in the senate took place on December 7, 9 and 12, 1994

and was sponsored by Senators Orlando Mercado, Gloria Macapagal, Tatad, Leticia

Shahani and Ernesto Herrera. In particular, Herrera was known as an advocate of trade

unions and labor in general, Macapagal is an economist by profession and has supported

the accession of the Philippines to the WTO. The rest of this section will discuss the

themes present in the Senate deliberations.

Necessity of the Law

In the deliberations, the principal sponsors of the AD law noted that there was a

need for a new anti-dumping law. The previous law, Section 301 of the Tariff and

customs code made dumping a fiscal concern under the Department of Finance (DOF).

This arrangement had a low rate of positive finding. As mentioned in the proceedings, of

the 41 anti-dumping cases, 30 were dismissed and only one case got a positive finding

from the DOF. Specifically, the sponsors mentioned that the new law would contain new

features such as:

1. The responsibility to make the decision to impose dumping duties is

transferred from the DOF to the DTI.


2. Provisional duties are to be in the form of a cash bond in order address

unscrupulous fly-by-night surety companies.

3. Rules to determine the normal value have been amplified.

4. Rules for determining injury have been relaxed which means that

injury need not be material, consequential or important to constitute

dumping.

5. A specific period for dumping procedures have been provided (Record

of the Senate, 1994: 182).

Sen. Macapagal, in her December 9, 1994 sponsorship speech of the bill clarified

its relationship to the GATT should it become law. She mentioned that the agreement is

very stringent in some aspects such as in the filing of an anti-dumping petition which has

too many requirements such as placing the burden of proof on the petitioner. It is simply

too much for a developing country such as the Philippines, the sponsors claim20 (Record

of the Senate, 1994: 251)

He revealed that the intention was that the law would contain some inconsisten-

cies with the ADA and that harmonization would take place at a later date. However as

the Philippines was not yet a member of the WTO at the time and the sponsors thought it

may take some time before the WTO can take effect (in reality, the Philippines became a

member less than a month later) and so this law was intended to protect industries in the

period of transition of WTO compliance (Record of the Senate, 1994: 252). In this

context, the anti-dumping law was seen as a necessary condition before positive action on

the ADA. Besides, the legislators were not yet under any pressure to comply with WTO

as the agreement has not yet been ratified at the time.

20 The provisions that the senators are referring to here may be Article 5 of the ADA which for the purposes of initiating an anti-dumping investigation requires, among other things, evidence of dumping, injury and a causal link between dumping and injury. The domestic producer seemingly has the burden of proof. In the 1994 law, it is government agencies may assist the domestic industry in coming up with the evidence needed to determine a prima facie case of dumping.


The senate, in drafting the bill of the law, took note of domestic interests. Sen.

Macapagal said that representatives of the agricultural sector approached them saying

that they wanted safety nets in order to cope with economic liberalization under the

WTO. Sen. Macapagal said that the law hope to make famers and industry "more confi-

dent; they can face the new world of GATT with increased protection from anti-dumping

law" (Record of the Senate, 1994: 251)

Since the law was made primarily in the interest of domestic industries and

agriculture, it should be seen that the law is to be considered as compliance to their

commitments to agriculture and industry and not as compliance to the GATT. Stated

another way, there was no need to rush GATT compliance as there was technically no

deadline for the compliance. They on the other hand are pressed for time to pass this

"stronger anti-dumping law" before they become fully committed to the GATT/WTO

(Record of the Senate, 1994: 252). Later on, Sen. Macapagal admitted: "We [the spon-

sors] just have to confess that we assisted in the drafting of this bill with the view in mind

that we wanted to be as protective as possible of our farmers and our aggravated indus-

tries" (Record of the Senate, 1994: 267)

The issue was raised by Sen. Raul Rocco as to whether it was the old law (section

301) that was unresponsive or is it the fault of the Tariff Commission (TC) for the old

laws perceived unresponsiveness (the TC handled anti-dumping investigations at the

behest of the DOF) (Record of the Senate, 1994: 253). With this point raised, he was

asked whether there was any way a provision can be made so that investigators in the TC

would not be bribed (provisions were later added to that dealt with officials that did not

perform according to what their duties prescribed. Sponsors Shahani and Herrera could

not give a direct answer promising that these concerns would be considered in the period

of amendment (Record of the Senate, 1994: 252).21

On December 12, 1994, the deliberations were continued. Sen. Rocco also did

not like the idea of the law having some inconsistencies with GATT. Sen. Macapagal 21 This request never did get taken up again in the course of the deliberation. However, a penalty clause provision appears in the 1999 anti-dumping law which makes dereliction of duty by government officials punishable as a crime.


defended the original intention by saying that consistency may depend on how one looks

at the law. It is true that the current law has a few gray areas, but the sponsors say that

these make a good case for themselves (Record of the Senate, 1994: 298). An example

the sponsors gave from the last session was the need to establish a benchmark of price

difference to say that the price difference is injurious. The congress technical committee

suggested 30%, industry claimed that it is too high and suggested 3%. GATT only wants

a "reasonable benchmark." In which case, the sponsors say that the law can be claimed to

be consistent with GATT (Record of the Senate, 1994: 261).22 Another example was the

ADA's provisions on the levy of duty based on the threat of injury. ADA Article 3.7

states that a dumping investigation on the basis of a threat of injury must be "clearly

foreseen and imminent" and subsections of this article go on to describe situations of

increased import volume, capacity of foreign producers to increase volume and whether

the prices at which goods entering a country may depress domestic prices. Paragraph a of

the 1994 law does not need to determine any of these, it is enough to establish that the

prices of imports are below normal values to establish a prima facie case of dumping

(Record of the Senate, 1994: 301).

Sen. Maceda made one interesting observation from the proposed anti-dumping

law. He read from a senate report that: "A number of provisions in the revised anti-

dumping agreement simply reflect current US law or practice. For example, the new

agreement expressly recognizes the US practice of cumulatively assessing the impact on

the domestic industry of dumped or subsidized imports."23 Sen. Macapagal agreed and

she said that she believed that the US had the "stricter" anti-dumping law (Record of the

Senate, 1994: 276).

Sen. Maceda later revealed that he had access to transcripts of debates in the US

as they were also in the process of amending their anti-dumping law. He mentioned that

at the time, the US senators were concerned with issues of: the standard of review;

greater transparency in anti-dumping investigations; de minimis dumping; import volume

22 The author does not know exactly what benchmark the sponsors are referring to but they may be referring to the de minimis rule.23 The Philippines is the only country in this study aside from Malaysia that practices cumulation.


margins; sunset reviews; cumulation of injury and; the recognition of anti-circumvention

practices and that the legislators had incorporated some but not all of the practices he

mentioned (Record of the Senate, 1994: 278).24

Sen. Tatad noted that the law did not contain any provision for voluntary under-

takings. When asked as to the reason why the bill at this stage does not contain provi-

sions for undertakings, Sen. Macapagal answered that "we [the sponsors] feel it is better

to be silent" (Record of the Senate, 1994: 303).25

After this, the bill underwent final revisions in grammar and style after that and

was then passed onto the executive branch. It was signed into law on the December 21

about two weeks before the Philippines acceded to the WTO in January 5 the next year.

B. Anti-Dumping Act of 1999

In contrast to the 1994 law, the congressmen were more active in the deliberations

of the new law. Some of the issues raised were reminiscent of the senate deliberations

five years ago. The deliberations in the lower house took place for two days in May 27

and then in June 1, 1999. The bill was introduced by Hon. Marcial Punzalan Jr. the bill

was created by the Committee on Ways and Means and the Committee on Trade and

Industry with the co-authors: Reps. Danilo Suarez; Joey Salceda; Alipo Badelles;

Herminio Teves; Angelito Sarmiento; Generoso Tulagan; Rolando Briones; Jesli Lapus

and; Barnardo Vergara. The congressmen sponsors who were active during the house

deliberations were Reps. Punzalan and Salceda. Rep. Salceda was a known economist.

The deliberations began with the house sponsors enumerating the merits of the

new act. One merit of which is that a clearer parameter is established for the purposes of

the computation of the anti-dumping duty as well as further refinements in the option to

impose the duty such as the inclusion of undertakings. The DTI was reasserted as the

24 The final version of this law did not include sunset review procedures, de minimis dumping, import volumes and cumulation of imports. The 1999 law already contained these provisions. 25 The 1999 act contained provisions for voluntary price undertakings, in the deliberations in congress for the new law, there was also a suggestion not to include undertakings as what the 1994 law has done.


institution which should have the mandate of handling the anti-dumping case which is in

keeping with WTO committments.26 Rep. Punzalan then started talking about the domes-

tic pressures they faced as they were drafting the law. Local industries particularly in the

downstream steel industry expressed grave and growing concern over alleged injuries

caused by dumping of products like steel billets, steel coils, etc27 (House of Representa-

tives A, 1999: 17)

The interpellations began with Rep. Apostol asking about what is dumping and

how it is determined. The concept of dumping was explained by Rep. Punzalan and the

point was made that while consumers may benefit in the short run from the artificially

low prices of imported good, they may lose in the long run because dumping may drive

away domestic producers and then the exporter may raise their prices again (House of

Representatives A, 1999: 29-30).

Rep. Apostol asked what would be the status of a foreign company under the anti-

dumping law if it buys a local company and begins to produce goods at a very low price

and drives away local competition. Rep. Punzalan clarified the issue, pointing out that it

would no longer be a case of anti-dumping, rather it would be a case of anti-trust/compe-

tition policy (House of Representatives A, 1999: 39). This highlights the close relation-

ship that these two laws have with one another.

Rep. Apostol followed up with the question of whether or not the bill is already

obsolete as foreign companies are "changing their style because they know that all these

anti-dumping laws are being passed left and right by countries in the world." The inter-

pellator tells them that he is worried that by the time they pass the anti-dumping law, they

26 In the final version of the law, the DTI would handle cases relating to the industrial sector while the Department of Agriculture (DA) handles anti-dumping cases pertaining to the agricultural sector.27 The dumping investigation of Hot Rolled Coils (HRC) from Russia that the sponsors were referring to makes an interesting case. The 1999 law was passed in the Senate while the anti-dumping investigation was taking place. In order to avoid any protest that the 1999 law was inapplicable to the HRC case, the published findings included a section on the application of procedural matters. They cited the case of Republic vs. Court of Appeals, G.R. No. 92326, January 24, 1992 which held that: "Procedural matters are governed by the law in force when they arise, and procedural statutes are generally retroactive in that they apply to pending proceedings and are not confined to those begun after enactment although, with respect to such pending proceedings, they affect only procedural steps taken after their enactment." (205 SCRA 356). To read more of the case, go to http://www.tariffcommission.gov.ph/hrc.html.


are already way behind. He also mentioned that the record of the 1994 law was rather

poor, of the 11 anti-dumping petitions submitted all but 5 were dismissed and only 2 were

given affirmative action.28 Rep. Punzalan then reaffirmed that the anti-dumping law

remains a useful tool but it is just one tool among many that may be used to counter

unfair trading practices (House of Representatives A, 1999: 40).

At this point in the deliberation, Rep. Apostol mentioned that an American author,

Greg Mastel advocates sunset reviews for anti-dumping decisions (House of Representa-

tives A, 1999: 43). Sunset review is a kind of review when a dumping duty is removed

after 5 years unless it is established that their removal will result in the resumption of

injury. The 1994 law did not contain any such provision now it was being considered for

the 1999 law together with voluntary price undertakings.

Rep. Defensor took the place of Apostol as interpellator and questioned the

proposed centralization of responsibilities to the DTI instead of the DOF. He was

worried that the proposed measure would result in too much centralization on the DTI.

According to Rep. Punzalan, the proposed measure will not completely centralize all

authority to the DTI since the law will still give DOF responsibilities through the Bureau

of Customs (BOC) which would provide data and evidence relevant to the dumping case.

In the end, the reason why the responsibility was given to the DTI instead of the DOF is

also because it is the preferred arrangement under the ADA (House of Representatives A,

1999: 50). Specifically, Rep. Punzalan reasoned that DOF should be concerned with

matters of revenue and since dumping is a trade matter and not a matter of revenue, it is

more appropriate that the DTI handle it.

Rep. Bunye brought up a case in international trade, the case of Clinton's unilat-

eral ban on what they perceived as dumping of steel by Russia (House of Representatives

A, 1999: 68). Rep. Punzalan assured that is not the intention of the law, nor will it even

be possible for the Philippines at this time and that the Philippine has to follow guidelines

in the WTO with regard to the course of action it can take. He noted that the reason why

28 To be fair, the reason for the low rate of affirmative finding may be due to the actual merits of the case rather than to deficiencies in the law itself.


the US can get away with such an action is because they already have so many of these

safety nets in place for their industries. The Americans are already far ahead of the

Philippines with regard to the effectiveness and sophistication of their measures (House

of Representatives A, 1999: 69). This segment of the deliberation ended with the spon-

sors imploring that the law be passed at the soonest possible time as it seeks to improve

on many aspects of the 1994 law (House of Representatives A, 1999: 69).

One of these improvements written in the bill then being deliberated is that the

maximum time period necessary from the filing of the petition to a final determination

was reduced to 237 days. However, the domestic group, the Federation of Philippine

Importers (FPI) petitioned that the time be further reduced to only 6 months, but granting

such a request is not possible given the intricacies involved in an anti-dumping proce-

dure, the procedure simply cannot be rushed (House of Representatives A, 1999: 71-72).

The FPI according to Rep. Punzalan also suggested that dumping be made into a

criminal offense, however it is simply not possible since an unfair trade practice is not

punishable as a crime (House of Representatives A, 1999: 72-73).29 However, the final

form of the law incorporates a provision that allows importers found guilty of dumping to

pay a fine as well as to lose their license to operate in the Philippines. The only other

punishment that can be meted out in relation to an anti-dumping proceeding is in case of

the failure of government officers to do their duty which would result in their prosecu-

tion. Note that this concern was also raised during the Senate deliberations for the 1994

law but was not incorporated in the final version.

Lastly, Rep. Punzalan mentioned that the FPI also wanted to remove the voluntary

price undertaking clause so as to give more "teeth" to the anti-dumping measure (House

of Representatives A, 1999: 76). The price undertaking provision had to be retained

though, since it would otherwise go against the ADA. This incident is particularly

revealing since if one recalls the Senate deliberations for the 1994 anti-dumping law, the

sponsors of the bill would have the law remain silent on that provision. In this incident,

29 Rep. Punzalan admitted in the deliberations that he actually finds criminalization unnecessary since the dumping duties in principle should already be enough.


the legislators refused to bow down to domestic pressure in order to comply with an

international agreement.

On the next session in congress on June 1, the question on the role of institutions

in the anti-dumping proceeding was raised again. Rep. Salceda also took over the

sponsorship duties from Rep. Punzalan. In the own words of the interpellator Rep.

Guinigundo: "Who will be the captain ball? Which department will oversee the imple-

mentation of this anti-dumping law? Will it be the department of agriculture? Will it be

the Department of Trade and Industry or will it be the Department of Finance?" Rep.

Salceda's answered that the DTI will be the "captain ball". Rep. Guinigundo then fol -

lowed up that answer asking: "Where will be the Bureau of Customs? Will it just be a

water boy or an ordinary player?" Rep. Salceda replied: "It would be one of those

players, the forward perhaps" (House of Representatives A, 1999: 132).

Another interpellator, Rep. Fua noted that there were so many restrictions in the

anti-dumping law, such as the amount of duty that the exporting country has to pay

(which cannot exceed the dumping margin), the 50% of total production of like product

must support the anti-dumping petition for the initiation of an investigation on behalf of

an industry. The sponsor, Rep. Salceda noted that having so many restrictions must not

be feared as other countries are also subject to the same restrictions (House of Represen-

tatives A, 1999: 140). Salceda continued with the following speech:

You know, if you will read the minutes of the WTO-GATT negotiation, contrary to our own impression and it is quite prevalent in our country, you will be surprised that it was the developing countries who asked for the provisions. Because it is the developed countries who are more, I think, in a position to continually use anti-dumping against products of developing countries and therefore by imposing stricter provisions on anti-dumping, in fact, it was meant to favor emerging economies like the Philippines because it preempts developed countries…from closing their markets through…"non-trade barriers" [sic] by the continuous use of … a looser anti-dumping law (House of Representatives A, 1999: 142-143)

The line of inquiry shifted to the question of the need for WTO consistency. Rep.

Salceda said that it is important to make the law consistent with the WTO, otherwise, the


Philippines may incur the possibility of dispute settlements (House of Representatives A,

1999: 145).

This argument by Rep. Salceda seems to corroborate the idea of the ADA being a

negotiated transfer. The legitimacy afforded by the ADA for developing countries which

incorporated many of their demands makes it seem easy for legislators to justify compli-

ance. On the other hand, the ADA has a built in enforcement mechanism, the dispute

settlement mechanism which can bring many profound implications to a country's trade

relations if it is invoked and so, it would make it in the interest of the country to make its

laws WTO consistent.

In the next session on June 2, 1999, there was quite a debate as to the status of the

phrase "substitute product". The WTO phrasing uses "like product". Using the phrase

substitute product could potentially broaden what kinds of products may file for anti-

dumping. For example the imported product feed wheat is a substitute for the locally

produced feed corn, using the phrase substitute product could potentially allow feed corn

producers to initiate and anti-dumping investigation on feed wheat. Initially, party-list

Rep. Montemayor wanted to give the "fullest possible protection" by using the term

"substitute product" (House of Representatives B, 1999: 80) and immediately called for a

viva voce vote to amend the law in that direction. The vote actually achieved a majority

and the measure was about to be adopted, but the results were immediately appealed by

Rep. Salceda who convinced the representatives present of the need to maintain WTO

consistency and the decision to adopt the phrase "substitute product" was overturned in a

second viva voce (House of Representatives B, 1999: 84). Rep. Montemayor neverthe-

less maintained the opinion that it is the duty of legislators to liberally interpret interna-

tional agreements for the sake of their constituents and to change their laws only if other

countries point out inconsistencies (House of Representatives B, 1999: 81-82). In the

same deliberation, Rep. Montemayor addressed the other Congressmen and asked if any

of them had been approached by representatives from other countries and international

organizations regarding inconsistent provisions of which nobody present was aware of

such an occurrence (House of Representatives B, 1999: 82).


That effectively concludes the deliberations of the bill for the 1999 anti-dumping

law in the House of Representatives which they then passed to the Senate for their

deliberation. There, the Senate consolidated the house version of the bill with their own

version in a special session with the congressmen of which no transcript exists.

The report of this special session revealed that the only major additions were a

provision that authorizes the TC to require any interested party to allow access to or

provide necessary information to enable the TC to conduct its investigation. And should

the party refuse access to the information, the TC may make its determinations on the

basis of available information. Another provision was added that required the TC to

inform all interested parties of the facts under consideration which form the basis of the

final decision, and that such a disclosure must take place in a sufficient time for the

parties to be able to defend their interests.30

Direction and Mechanisms of Convergence Present

Some general observation needs to be stated: That in the course of the delibera-

tions of both laws 1994 and 1999 in the senate, there was really no resistance to the

adoption of anti-dumping laws. There were certainly delays and some questioning as to

the value of anti-dumping (such as Rep. Apostol's objections to the 1999 Law) but there

were no concerted attempts to prevent it. The clash was mainly in the area of the proce-

dures where the main debates were whether to comply with the ADA or not to comply in

order to increase protection to domestic groups.

Several general points of inquiry also came out over the course of the discussion

of the deliberations of the 1994 and the 1999 act:

What procedures need to be followed in an anti-dumping law?

What is the place of the instrument in economic liberalization (espe-

cially in relation to the WTO)?

30 Conference Committee Report recommending that HBN-7612 in consolidation with SBN-763 be approved as reconciled (August 25, 1999)


What are the roles of government institutions that handle anti-dump-

ing?

What improvements necessitate the amendment of existing anti-dump-

ing laws?

These points of inquiry lets one see the mechanisms involved in the convergence

of anti-dumping legislation.

With regard to the first point, the issues raised regarding the procedural aspect of

the law ranged from the question of time limits, filing processes, amount of duties, kinds

of duties being applied, data gathering methods and the effectiveness of the legislation

(represented by number of petitions and affirmative findings). The pressure in this area

of questioning can comes from three sources: domestic pressure groups; pressure from

WTO and; lessons from other countries and the fear of being left behind. One particu-

larly interesting episode was the observation made by Sen. Maceda in the 1994 law that

much of it was actually taken from US legislation. In terms of policy convergence

theory, this reveals that the Philippines made use of the anti-dumping models of the US

and the ADA.

Another observation with for the first point is that often, the different pressures

want to pull the law in two contradicting directions, and this is especially clear between

domestic pressure groups and pressure from the WTO. The domestic pressure groups as

seen here may be exemplified by the agricultural sector representatives who were men-

tioned in the senate deliberations of the 1994 act; and representatives from the steel

industry and the FPI who were mentioned in the 1999 act. WTO pressure was always

present in these deliberations. In the 1994 deliberations, the WTO pressure was coming

from the fact that the legislators were trying to get the Philippines for membership, they

tried to make a law that was said to be "stronger" all the while knowing that it would

eventually have to be made more consistent to international legal obligations. In 1999, it

was these legal obligations which the legislators believed needed to be met that made

them adjust inconsistent procedures to the WTO. The lessons from other countries and

the fear of being left behind were evident in the 1994 deliberations when the one of the


sponsors revealed that he had access to US senate deliberations when they were also

trying to revise their anti-dumping law, but the fact that many of the procedures discussed

therein were not emulated in the 1994 law might go to show that the lawmakers may have

drawn negative lessons from their study of the US deliberations. A positive lesson may

be gleaned from the mention of the case of the US banning imports from Russia in the

1999 lower house deliberations, especially when one sponsor said that they are already

experienced in using safety nets (unlike the Philippines).

The point of what the relation of the anti-dumping instrument is in economic

liberalization especially in the context of the WTO led to much confusion with regards to

other types of contingent protection. Questions were asked in the deliberations that

wanted to clarify the scope of protection that may be afforded by anti-dumping laws.

Naturally there was confusion from the less informed who tried to ascribe a role to anti-

dumping laws that are better served under countervailing laws and competition policy.

Also, it came out a few times in the 1999 deliberations that anti-dumping may not pro-

vide a sufficient deterrent to dumping and some clamor was made to give anti-dumping

law the ability to punish those found guilty of dumping. Making dumping a criminal act

is not possible, but the clamor for this can be seen in a provision that fines and suspends

importers found guilty of dumping. The Philippines is the only country in this study that

has such a provision.

The third point is what is the role of government institutions in anti-dumping was

a heated issue in the deliberations because there was always a change in the main institu-

tion that handled anti-dumping in the Philippines each time a new anti-dumping law was

being deliberated. The original law, Section 301, had the DOF has the agency that

accepts anti-dumping petitions and makes the final decision. The 1994 Act gives the

same power to the DTI in addition to the DOF. The 1999 act removes the DOF from this

role and replaces it with the DA when the petition involves the agricultural sector. The

Tariff Commission and the Bureau of Customs also have a role in the investigation of

dumping. The TC in charge of determining whether injury or dumping have occurred

while the BOC is in charge of gathering information and later for collecting the dumping


duty. It was mentioned that the reason for the changes in institutions lies in the desire to

make anti-dumping investigations faster and more responsive as well as a desire to

comply with the ADA.

The final point of inquiry is what improvements need to be made in the anti-

dumping law that necessitates its replacement. This point came out in both the 1994 and

1999 deliberations. The main improvements that made the amendments necessary were

that there was a need to simplify procedures, shorten time needed to make a decision and

to further clarify certain procedures. The combined effect of these improvements is to

make the anti-dumping instrument more accessible to potential users.

Given these points of inquiry, what sort of mechanisms do we see at work? The

mechanism of international harmonization is very prominent which leads the legislature

to want to comply with the obligations under the WTO which results in its procedures

looking very similar to the other countries in this study. Domestic pressure and regula-

tory competition are also present and are the main impetus for the adoption of some

procedures, institutional arrangements and the desire to improve the law (i.e. make it

more accessible to potential users). Transnational communication was also taking place

in the form of lesson drawing (both negative and positive), especially from the United

States.

One pattern that the Philippines confirmed in anti-dumping convergence is that

many countries would opt to come up with an anti-dumping law with some GATT

inconsistencies in order to take advantage of the fact that there is no definite time limit

for the country to make its law comply with GATT.

CHAPTER VIII


DATA ANALYSIS

The aim of this chapter is to discuss the state and direction of convergence in anti-

dumping laws and to discuss the mechanisms that influenced the convergence based on

the data that was presented in the previous chapters.

A. State of Convergence

Legal Bases

The author offered a common pattern for anti-dumping law adoption: that coun-

tries start with a trade and customs code (legislation with a similar function) and follow it

up with a "functional" anti-dumping law (complete in the sense that the law contains

implementing provisions and detailed procedures in order to govern the conduct of anti-

dumping investigations) around the time of WTO ratification (1993 for Malaysia, 1994

for the Philippines, 1996 for Indonesia and Thailand). These laws were then amended or

replaced in the late 90s (1998 for Malaysia, 1999 for the Philippines, Indonesia and

Thailand). This pattern is consistent with all the countries in this study with the excep-

tion of Vietnam which is to be expected since they have continued to rely on traditional

trade barriers until opening up recently. The dates these laws were ratified coincides with

the dates in which the countries became members of the GATT (for the trade and cus-

toms code) and WTO (for the functional legislation). In the case of the WTO ascension,

the anti-dumping law was passed just a short time (1-2 years) before and after a country

becomes a member. The amendment comes

The laws became more similar with each other in the period between the enact-

ment of the first law and subsequent amendment. This is clearly seen in the institutions

of anti-dumping and the procedures being followed across countries.

Institutional Arrangement


The countries all adopted institutions with similar functions and with similar

relationships with one another. As noted in Chapter 5, the countries employ a decision

making agency (also known as the Anti-Dumping Authority) which is usually the min-

istry of trade or one of its departments. Among its functions is to accept anti-dumping

petitions and to decide whether or not to impose a dumping duty based on the investiga-

tion conducted by the investigating agency. The investigating agency is usually also

attached or subsidiary to the Anti-Dumping Authority and its function is to determine

whether dumping and injury exist and then to recommend to the Anti-Dumping Authority

to impose dumping duties. Auxiliary agencies assist the investigating agency with the

collection of information relevant to the case; the most active agency in all instances is

the customs department since it has access to data on the amount of trade going on.

When anti-dumping laws change or get amended, the effect of these amendments

to the institutional arrangement is usually either: (1) an agency is given more responsibil-

ities or tasks are redistributed to other agencies (ex. Rearrangement of the composition of

Indonesia's KADI and the discussion in the Philippine congress about giving the BOC a

"greater role") and; (2) powers are transferred from one agency to another (ex. Transfer

of Anti-Dumping Authority from DOF to DTI in the Philippines and MOF to MOC in

Thailand). The rearrangement of institutions all seems to take place in the interest of

improving efficiency in the conduct of investigations such as reducing the amount of time

needed to conduct an investigation. Another goal is to ensure that WTO standards are

kept in the collection and treatment of evidence, conduct of tests, determination of injury,

etc. so that disputes with other countries can be avoided (Aggarwal, 2007).

For example, in the past, the Finance Ministry being the Anti-Dumping Authority

instead of the Trade Ministry was more common, with the Philippines, Thailand and

Malaysia using the Finance Ministry at one point. Thailand and the Philippines shifted to

their respective Trade Ministries in 1991 and 1994 respectively. The reasons for this

shift are first because it is believed that it is more appropriate to give the responsibility of

anti-dumping to Trade Ministries because of its nature as a trade issue and therefore, it

can be handled with greater expertise as well as greater knowledge of international trade


laws. Of the five countries in this study, only Malaysia still employs its Ministry of

Finance to make final determinations, but this arrangement is not as different as it seems

since the Malaysian Ministry of International Trade and Industry (MITI) accepts the anti-

dumping petitions and supervises the investigation.

Thus in terms of the institutions that govern anti-dumping, one can observe Sigma

Convergence occurring among the countries. It is also possible to imagine that Delta

Convergence has occurred towards the EC's unitary system (as opposed to the US'

bifurcated system) which puts the responsibility of determining both dumping and injury

under one agency.

The direction of convergence in institutions seems to be towards making anti-

dumping easier for governments to use. They strove to strengthen the capacity of some

agencies by giving it more powers in the investigation and by clarifying the relationships

among the agencies (such as which procedures should be carried out independent of other

agencies) in order to make the process from filing of petitions to the final decision and

collection of duties happen more smoothly.

The mechanisms of convergence that may be observed in this case is a mix of

Regulatory Competition and Domestic Pressure. Regulatory Competition was observed

in the Philippines as the main reason for the shift in making DTI the anti-dumping

authority rather than the DOF. Domestic Pressure may have been the reason as to why

Indonesia's KADI was made more independent of MTI. On the other hand, the re-

searcher believes that International Harmonization does not have an important role

because the ADA does not actually contain any provisions on the kind of institutional

arrangement a country must possess, in fact, it just assumes the existence of institutions

that govern anti-dumping (Czako, Human & Miranda, 2003). It is difficult to observe

transnational communication in any of its forms for institutional arrangements. The

communications from the ADP committee do not normally challenge the institutions

governing anti-dumping. One communication was addressed to Indonesia regarding the

shift from the Appeals Institute to the Tax Dispute Settlement Board but it was merely to

clarify its judicial character and no changes were made following that.


Procedures

This study compared the countries according to: public interest provisions,

transparency and confidentiality, levy of duty, provisional and retroactive duties, initia-

tion of investigation, determination of injury and determination of normal value.

Of the above provisions, public interest, transparency and confidentiality, levy of

duty and retroactive and provisional duties are largely left to the discretion of the country.

Which makes convergence in this area can be the result of any of the mechanisms of

convergence. On the other hand, the initiation of investigation, determination of normal

values, and determination of injury are governed by some provisions in the ADA which

makes International Harmonization the leading cause of convergence in this area if

convergence is observed. The following is a summary of the findings in Chapter V

Public Interest Provision – Only Malaysia, Thailand and Vietnam contain "true"

public interest provisions. Even then, they differ in nuance. Vietnam and Malaysia make

public interest an optional consideration in deciding whether or not to stop an investiga-

tion or a duty, while Thailand makes public interest a requirement in anti-dumping

proceedings. The Philippines does not have a public interest provision but it does contain

provision that discourage the misuse of the instrument by domestic industries and by

public officials. Indonesia does not have any such provision.

Transparency and Confidentiality – All countries maintain confidentiality of

information to varying degrees (such as in terms of the criteria in which it considers

information to be confidential, the kinds of people/groups that may be granted access to

information etc.). All countries publish the reasons for the imposition of anti-dumping

duties. Countries have converged in this area because of similarities in the way they treat

confidential information. Information is restricted to interested parties during the investi -

gation and in some cases, the government has criteria for saying whether one is an

interested party or not.

Levy of the Duty – All countries levy the anti-dumping duty prospectively. Only


Vietnam provides that duties be levied retroactively when a foreign producer requests for

it and even then it is only considered under certain circumstances.

Provisional and Retroactive duties – All countries apply both kinds of duty. The

preferred means of getting provisional duties is with a bond or some other security.

Retroactive duties follow the 90 day time period set by the ADA.

Initiation of Investigation – All laws require that the anti-dumping petition must

be submitted in written form but the laws diverge in the required contents of some of the

petition as some laws are highly detailed and whereas others (especially Indonesia) leave

this aspect vague. Anti-dumping investigations can occur ex officio.

Determination of Injury – All countries except Indonesia consider price undercut-

ting, decline in output, and reduction in market share as a manifestation of injury. All

countries except Indonesia consider the threat of injury as a factor that may require the

imposition of duties. Furthermore the clarity in which the countries' anti-dumping laws

establish the causal link between injury and dumping differs among countries. All

countries however require that this step must be demonstrable. The test for the causal

link usually involves attributing price suppression, retardation and reduction in market

share to the dumped product by examining the relationship of price, volume of imports

(and sometimes the volume produced in the home country) and capacity of domestic

markets to absorb the good.

Determination of Normal Value – Normal value is usually the price of the im-

ported good sold under normal circumstances in the country of origin. Sometimes this

can not be determined in which case; the normal value has to be determined either by

reconstruction based on the producers' costs and profits or by looking at the sales of the

product in comparable third party countries. The laws differ in the detail that they place

in the legislation and in the construction of the provision. One interesting construction is

the Philippines' paragraph (n), which says: "If the normal value of an article cannot be

determined, the provisions for choosing alternative normal value under Article VI of

GATT 1994 shall apply."


Based on the summary of procedures provided above, one can say that in the case

of procedures left at the discretion of governments (public interest, transparency and

confidentiality, levy of duty and retroactive and provisional duties), or the provisions

with more less detailed provisions on the ADA, the countries converged in all these

procedures except in the area of public interest. The direction of the convergence based

on the changes that the laws underwent seems to be in the direction that the law is easier

to apply. For example, Vermulst (1997) says that the reason for the prevalence of the

system of providing non-confidential versions of confidential information instead of

providing for a system of disclosure of confidential versions is because it is less problem-

atic since the investigation may not be jeopardized as a result of the leakage of confiden-

tial information.

Likewise, One reason for the prevalence of prospective duties is that it is much

simpler to apply than retrospective duties, reporting of dumping margins for retrospective

duties may often come late thus causing many complications. Another reason for the

method's prevalence may be because it would make the application of duties based on the

threat of injury difficult since no injury occurs, the duty would have to be the "full" duty

based on the dumping margin.

All systems make use of preliminary and retroactive duties. Countries require

that the preliminary duty must be paid in advance be it in the form of cash or as a bond

(or some other security) for variable duties. The reason for this preference may be due to

its ease of use. All countries apply retroactive duties only if the dumped product was

dumped quickly and in high volumes in a short period of time and only after the final

determination has been made (with the exception of Thailand which would apply them as

soon as a preliminary determination is made). Convergence occurs in this procedure

largely because the laws are in compliance with the ADA when the agreement has

something to say about it. In the levy of retroactive duties this is the 90 day time limit

that the retroactive duty must not extent beyond. This is not surprising since all of these

are allowed under WTO rules and the countries here can be said to just be "maximizing"


their regulations with respect to their legal obligation.31 It is also worth noting that the

detail differs among their laws, for example, the Philippines is the only country in this

study that codifies the AD requirement in Article 10 no. 8 that no retroactive duties may

be levied on product entered for consumption prior to the date of initiation.

Among the procedures governed by the ADA, one can also see convergence

towards the agreement. One obvious illustration of this is the Philippines which, in its

desire to achieve consistency with the agreement simply stated that it would follow

GATT provisions. Likewise, Sutham (2008) claims that Thai law has very similar

wording to the ADA (at least in English translation). The researcher has confirmed this

in the definition and determination of injury in which the English translations of the anti-

dumping laws seem almost identical to the construction of the ADA (see Chapter V).

The reasons for why the evolution of legislation followed similar patterns, may

have been the lack of experience on the part of the adopting country. Vermulst (1997)

notes that for countries who have just adopted the anti-dumping instrument, dealing with

the more technical aspects of the instrument will be difficult. The trend towards having

more detailed international rules makes it more difficult for developing countries, which

simply does not have the expertise and experience in anti-dumping investigations to abide

by these rules. Only as the developing countries become more and more experienced in

anti-dumping (either by initiating anti-dumping investigation or by having their industries

becoming the target of an anti-dumping investigation) do their laws end up containing

greater levels of detail and sophistication.

Given this discussion, it can be said that there is Sigma Convergence taking place

in the procedural aspect of anti-dumping law. Convergence has taken place incremen-

tally and this has been towards the direction of the ADA in the procedures in which it has

31 To show that the laws do converge in this area toward the ADA, the change in Philippine anti-dumping law is an interesting case. In the 1994 Anti-dumping act, before the Philippines ratified the WTO, the provisional duties were very burdensome. The application of a provisional duty does not begin after a preliminary determination, it begins after a prima facie case of dumping. The provisional duty also consists of a provisionally estimated duty "plus the applicable regular duty based on the documentary evidence submitted with the dumping protest". These duties come in addition to the withholding of products that have already been entered in the Philippines. Naturally other countries questioned these practice as will be discussed in the next chapter.


an effect and towards ease of use/application in cases in which the ADA has no effect or

has a limited effect. This indicates that International Harmonization, Transnational

Communication, Regulatory Competition and Domestic pressures have been at work.

With regard to the mechanism of Regulatory Competition, the study found that

countries amend their laws when they perceive that the old law contains some difficulties

or inefficiencies and in trying to correct these, countries learn from other countries

experiences and from the WTO. Alternatively, as the case of the Philippines will show,

countries may pass an anti-dumping law just before entering into the WTO which accord-

ing to its rules allows a country an indefinite time period to amend existing laws that are

inconsistent with the ADA. Thus, a country would deliberately pass a law that has some

ADA inconsistencies with the intention of revising the rules when the time is right. The

pattern is reinforced as a result of the dates that the countries joined the WTO (all of them

joined in January 1, 1995 with the exception of Vietnam which joined in January 11,

2007). The amendments almost always end up making the country more ADA consistent

in the procedures in which it matters.

This begs the question of whether the GATT ADA was that compelling to begin

with. The threat of Dispute Settlement and the communications among WTO members

in the Committee on Anti-Dumping Practices which often consisted of other members

challenging the ADA consistency of another's laws ensured convergence toward the

ADA when the Agreement has something to say about it.

B. Philippine Convergence

The aim of Chapter VI on Philippine convergence was to show what international

pressures the Philippines has been exposed to and its effect on the policy objective,

policy instruments and policy settings. A study of the transcripts in that shows that the

Philippines has experienced the mechanisms of: International Harmonization; Regula-

tory Competition; Domestic Pressures.

The transcripts of the lower house and senate deliberations, it is clear that anti-


dumping became a concern because of trade liberalization as a result of WTO accession

(WTO ratification was being rushed in the senate at the same time as the anti-dumping

law. The 1994 deliberations were more concerned with "the place of anti-dumping in

Philippine trade policy." The objective was to have an anti-dumping policy that provided

greater protection for domestic industries than the WTO agreement would have otherwise

allowed. Such as criminalization of dumping or the absence of sunset reviews and

undertakings.

The objective of the anti-dumping law as it was being amended in 1999 stayed the

same—to protect domestic producers but this time the legislators tried to maximize

protection in light of international agreements. The transcripts revealed in the provision

that required the support of up to 50% of total domestic production to support an anti-

dumping law, each time this is questioned, the response is always that the ADA must be

kept. They also tried to learn from the Philippine's own experience in anti-dumping as

well as other countries' experiences. This was most clearly seen when one interpellator

even challenged the relevance of anti-dumping laws in light of the experience of America

unilaterally not barring the entry of Russian steel.

The experience was also necessary when the government tried to change the anti-

dumping authority from the DOF to the DTI and the DA. The DTI was chosen because it

is generally more appropriate as an anti-dumping authority than the DOF. The DA is

there to cater to the anti-dumping needs of farmers which also appears appropriate since

they have more experience dealing with agrarian matters and can more easily comply

with the 50% domestic support requirement of the ADA.

There were also many instances during the deliberations in congress have shown

that the legislators may even be working more closely with domestic producers in formu-

lating the policy. Two groups were mentioned in the deliberations, representatives from

the Philippine Steel industry which at the time was pursuing an anti-dumping case against

Russian steel. The other group was the Federation of Philippine Importers. The first

group, the steel industry, is actually an expected player according to literature. For

example, Zanardi (2008) says that one of the determinants of anti-dumping law adoption


is the presence of a steel industry.32 It is therefore not surprising that the steel industry

continue to play an important role in amending anti-dumping laws.

C. Dynamics of Convergence

Convergence does not seem as clear cut as in the above discussion. The direction

of convergence is toward ADA regulations and towards ease of use. This however, only

covers anti-dumping from written legislation itself and not practice. This is not an issue

in this thesis since this study is only limited to studying written laws; however the

divergence is worth mentioning. What this divergence says is that states are really trying

to experiment with the laws in order to see what they can or can not get away with.

Getting states with written laws that are inconsistent with international agreements would

depend on the enforcement mechanisms that the international organization has in place

and in the strength and political influence that its members have. In the case of the WTO,

it has the Committee on Anti-Dumping Practices which serves as a forum in which

governments can send questions and clarifications to one another in questions of anti-

dumping law. Countries are also required to send semi-annual reports to this body on the

status of their anti-dumping measures and the anti-dumping legislation they have in

place. Therefore, the ADP also serves as a database of anti-dumping information. The

other body that ensures convergence with the ADA is the Dispute Settlement Body. In

this body, countries may move to have inconsistent laws removed and contentious

practices stopped. In this study, two important cases were mentioned. One involved the

repealing of the US Anti-Dumping Act of 1916 which contained provisions that were

inconsistent the GATT/WTO Treaty. The other case is currently ongoing, the case of the

practice of zeroing which supposedly violates Article 2.4 of the ADA. Both of these

cases were aimed at the United States but it is also possible for other members to initiate

a dispute settlement proceeding on any other member with inconsistent laws/practices. In

spite of these enforcement mechanisms, governments continue to experiment with their

laws in order for officials to be able to please their constituencies who would almost

always demand for greater protection under national anti-dumping laws. Therefore as

32 The steel industry did not only play a role in the Philippines alone, its influence was also seen in Indonesia, Malaysia and Thailand in this study.


countries continue to experiment and as international jurisprudence on anti-dumping

continues to grow, there is not telling what the direction of national anti-dumping laws

and practices will be in the future.

The mechanisms of convergence are not as clear cut either. In the theory of

policy convergence, the mechanism seems to stand alone. International harmonization

can operate on its own as could regulatory competition and the like. What the researcher

found out is that these mechanisms exist side by side and influence the evolution of

policies in varying degrees. More importantly, some mechanisms facilitate the action of

another. The best example for this in this study is how transnational communication and

international political pressure facilitate the mechanism of international harmonization,

specifically compliance with the ADA. Another observation is that different mechanisms

can pull policies in two different directions of convergence. This is apparent in the case

of international harmonization and regulatory competition together with domestic pres-

sure. International harmonization pulls anti-dumping policies towards more internation-

ally acceptable and transparent procedures and international standards of anti-dumping

investigation. Regulatory competition on the other hand, seems to pull toward a more

discretionary regime wherein authorities can more easily come up with a positive deter-

mination in an investigation and where it is easier for a domestic industry to apply for

anti-dumping protection. This may result in anti-dumping laws that seem outwardly

consistent with international legislation but is different in practice. The researcher would

like to offer the case of Indonesia with its "skeletal" anti-dumping law providing much

room for interpretation and an empowered and independent KADI as a case in point.

To sum up, policy convergence as observed in this case, is more nuanced than

what the empirical studies usually portray with its sigma, delta, gamma and beta conver-

gence and its stand-alone, clear cut mechanisms of convergence.

CHAPTER IX


CONCLUSION AND RECOMMENDATIONS

A. Conclusion

As noted in the analysis the laws governing anti-dumping have become more

similar over time in the sense that they have adopted similar institutional arrangements

and procedures. The countries examined in this study have been converging their proce-

dures towards that of GATT Anti-Dumping Agreement of 1994. This means that the

countries tend to apply the same standards and use the same definitions as the agreement.

Aside from this, many of the provisions have been tending towards those that are easy to

use or apply, which can point one to the direction that convergence may come as a result

of regulatory competition, transnational communication or through independent problem

solving.

The areas in which the countries have converged towards the ADA are in defini-

tion and determination of injury, determination of normal values and initiation of an anti-

dumping investigation.

Some procedures such as in the treatment of evidence and confidential informa-

tion, application of final duties and provisional and retroactive duties, convergence seems

to go in the direction of whatever is easier to use. This is especially evident in cases

when the system changed from an older piece of legislation which was more cumbersome

to one which was easier to apply. Furthermore, the trend of the changes in the legal bases

of anti-dumping in the cases of Malaysia, Philippines and Thailand has been towards

increased detail and precision in their anti-dumping laws. The change in the Philippines

from the 1994 to the 1999 anti-dumping laws seems to indicate towards greater simplifi-

cation of procedures (in application) as well as compliance with the ADA.

In this study therefore, there appears to be Sigma Convergence where the differ-

ences in the countries' laws decreased over time. There is also convergence toward an

exemplary model, the ADA, in provisions of general application such as in determining

injury, normal values, etc. but since this is more of a manifestation of international


harmonization, Delta Convergence cannot really be said to have occurred. On provisions

not governed by ADA or those not provisions that are not essential to the making of a

positive determination, the direction of convergence appears to be toward the ease of use

of a procedure or instrument.

One aspect in which the ADA is silent in is in the make-up of competent authori-

ties in anti-dumping. In this study, countries have largely converged in having a unitary

system with the main decision-making authority being under the Minister of Trade and

Industry (or any equivalent body directly under the executive branch). In charge of the

investigation is a dedicated committee on anti-dumping composed of members from

various ministries and sectors. The customs agency provides support by providing

information. Judicial courts generally handle appeals and reviews; specifically this

would refer to a court which specializes in trade issues or finance issues. This is the basic

set-up of the authorities involved in anti-dumping, however the reasons for convergence

in this area do not indicate any international mechanisms at work. It is may be because of

domestic arrangements that it ended up this way. In the case of the Philippines, it seems

that it was a process of trial and error that left us with the current institutional arrange-

ment.

In this study therefore, there appears to be Sigma Convergence where the differ-

ences in the countries' laws decreased over time. There is also convergence toward an

exemplary model, the ADA, in provisions of general application such as in determining

injury, normal values, etc. On provisions not governed by ADA or those not provisions

that are not essential to the making of a positive determination, the direction of conver-

gence appears to be toward the ease of use of a procedure or instrument.

With regard to the mechanisms of convergence, the study revealed that the ADA

carries a lot of force and persuasive power for the states to conform to. This may have

roots in the retaliatory nature of anti-dumping. Alternatively, this points to the commu-

nicative power of the WTO, as the author has shown in the process of questions and

clarifications under the agreement. Furthermore, the threat of undergoing a dispute

settlement under the agreement seems sufficient for many countries to want to reform.


However, with the United States and other economically powerful countries concentrat-

ing more on regional arrangements than the multilateral arrangement under the WTO,

one can observe that the clamor for compliance with the ADA likewise got reduced.

Evidence for this is Indonesia, whose laws remain vague or with Thailand which has not

notified the WTO of new legislation even though it is said to have done so.

Therefore, the convergence of anti-dumping legislation is actually a very compli-

cated process. For example, policy learning can take place within the context of regula-

tory competition. The simplified empirical model does not do justice to the theory. It is

also not clear whether the adoption of an EC system for the states in question was coinci-

dental (i.e. independent problem solving) or deliberate.

Given the overwhelming role of WTO compliance in the increase in similarity of

anti-dumping laws, one can say that international harmonization and transnational

communication (taking place within the context of the WTO) is the primary reason for

convergence. The reason why the pressure for harmonization was strong may be attrib-

uted to the fact that, at least during the Uruguay Round, the ADA can be seen as a tool

that can be used for the advantage of developing countries, especially since some of the

procedures embodied in that law were lobbied for by developing countries themselves.

The developing countries knew that anti-dumping is a double edged sword—while they

would be entitled to use the instrument, so would the traditional users of anti-dumping,

hence certain procedures such as standards for evidence, reviews, definitions of like

products, domestic industries, etc. were included in the agreement for the benefit of the

developing country since they know that developed countries may retaliate against them

hence wanted them to be subjected to the same "strict" requirements. The point can thus

be made that the kind of international harmonization that went on was a "negotiated

transfer", meaning that the kinds of provisions to be adopted was negotiated among the

members.

Nevertheless, modalities exist whenever the ADA is silent on a practice. There is

evidence to believe that experimentation is taking place in anti-dumping law and practice

with the main objective being that states try to experiment to see what it is they can "get


away with" in anti-dumping. Thus a country may end up with an anti-dumping law that

at the level of the written text may seem consistent with the ADA but in practice may

contain many contentious procedures. Not only that, but one cannot expect the interna-

tional regime of anti-dumping to stay the same indefinitely, the ADA will also change

and adapt as countries negotiate for more concessions or stability and as jurisprudence in

anti-dumping law grows. Thus, convergence is not as clear cut a phenomenon as simply

sigma convergence toward the ADA.

B. Recommendations

A study of convergence in anti-dumping practice will also be useful. Since this

study only concentrated on codified laws, many laws are silent on certain practices, the

reader will not be informed of practices that take place outside of what is written, i.e.

where the law is silent, does practice still converge across countries? This study has

demonstrated several instances of this, particularly Indonesia's law which seems deliber-

ately vague, leaving most of the practices under the responsibility of the anti-dumping

committee which comes up with its own rules and regulations. Furthermore, the litera-

ture also suggests that developing countries occasionally apply their anti-dumping law in

a manner which is inconsistent with ADA even when their laws seem consistent. Thus,

one recommendation for future research that the author would like to give is to study the

convergence of actual practice of anti-dumping law, i.e. whether practice actually follows

the legislation that was created for it.

Another interesting approach for the comparison of anti-dumping law is by

examining which aspects of the investigation the law deliberately stays silent in or is

vague. For example, in provisions that determine whether an entity is considered an

interested party or not or in de minimis dumping.

Another recommendation is for future research is to investigate the specific

convergence mechanisms that went on in the individual ASEAN countries. The author

tried to do this for the Philippines specifically, but this was only to provide an idea for

what was going on across the region. A more in depth comparative study of the policy


making of individual countries would be very interesting and informative. Such cross

country studies should be done not only in anti-dumping but in other policies and instru-

ments.

The author also recommends trying to study the convergence of anti-dumping

policy between the "new users" of anti-dumping and the traditional users such as the US

and EU. This study mentioned that anti-dumping laws in ASEAN may be converging

towards one of these models but it has never been confirmed in this study. Such a study

would have to focus on Delta Convergence.

To contribute to theory, the author recommends that more qualitative research be

done on policy convergence so that the application of directions and mechanisms, and the

relationships among these mechanisms will be better informed and to enrich the literature

on policy convergence.


the convergence of national anti-dumping legislation among asean countries

Documents