Dumping occurs when the export price is lower than the normal value. Article Ⅵ(1) of the GATT, now incorporated into the GATT 1994, provides that the dumping is occurred by which products of one country are introduced into the commerce of another co...
Dumping occurs when the export price is lower than the normal value. Article Ⅵ(1) of the GATT, now incorporated into the GATT 1994, provides that the dumping is occurred by which products of one country are introduced into the commerce of another country at less than the normal value of the products, i.e. "if the price of the product exported from one country to another
(a) is less than the comparable price, in the ordinary course of trade, for the like product when destined for consumption in the exporting country, or,
(b) in the absence of such domestic price, is less than either
(ⅰ) the highest comparable price for the like product for export to any third country in the ordinary course of trade, or
(ⅱ) the cost production of the product in the country of origin plus a reasonable addition for selling cost and profit."
The detailed implementation of these basic principles has been set out in the WTO Anti-dumping Code which the Community implemented by Regulation(EC) No 384/96.
For studying normal value, it is advisable to differentiate between exports from market economy countries(Part Ⅱ) and exports from non-market economy countries(Part Ⅲ).
In the chapter Ⅱ, first, we will study the normal value in the economy countries in the ordinary of trade under the terms of article 2.1 of Regulation(EC) No 384/96, which prescribes that "the normal value shall normally be based on the prices paid or payable, 'in the ordinary course of trade', by independent customers in the exporting country."
Second, the normal value in the economy countries should be examined if "sales of the like product in the domestic market of the exporting country, or export sales to a third country, …, may be treated as 'not being in the ordinary course of trade' by reason of price." with regard to article 2.4 of Regulation (EC) No 384/96.
In the chapter Ⅲ, based on exports from non-market economy countries, it is necessary to discuss a particular problem concerning the fact that neither costs nor prices can be regarded as reliable evidence for the establishment of normal value in such countries.
Considering this study, it is thought that the determination of normal value in the EU anti-dumping law is based on a complicated structure, and that the community institutions have too much discretionary power to establish the dumping. Therefore, it is required that we have a good grasp of the Community's anti-dumping practice and legal system for protect our external trade interest.