New anti-dumping laws to guard domestic industry from unfair trade: Malik

• Anti-Dumping & Countervailing Act and Safeguard Measures Act passed in Parliament on March 7
• Minister Malik Samarawickrama stresses Acts won’t provide blanket protectionism to domestic industry
• Development Strategies and International Trade Ministry says will soon be undertaking a tariff liberalization programme

The new anti-dumping laws passed in Parliament last week are vital to protect domestic industry from unfair trade practices but are not aimed at providing blanket protectionism to the domestic industry, the Development Strategies and International Trade Minister Malik Samarawickrama said. 

The much awaited bills relating to international trade—Anti-Dumping & Countervailing Act and Safeguard Measures Act—were passed in Parliament on March 07, and are expected to provide domestic industries with a robust framework to guard against unfair trade practices and unforeseen surges of imports. 

“While we grow our trade with the rest of the world and forge ahead with trade liberalisation, we have not forgotten the need to look after the interests of our own industries here at home. 

The Anti-dumping & Countervailing and Safeguard Measures Bills passed by Parliament are vital to protect domestic industry from unfair trade practices. 

I am pleased that our government was able to get this done— after it had been delayed for many years,” Minister Samarawickrama said. 

“But let me be very clear. These new laws are not aimed at providing blanket protectionism to the domestic industry, but rather a credible set of remedial measures in the event of injury to the domestic industry caused by dumping, or by subsidisation, or by sudden surges of imports. The primary purpose is to re-establish fair competition and to provide the domestic industry a level playing field, not promote protectionism,” stressed the minister.  

The enactment of these two laws was long overdue in Sri Lanka as many countries—both developed and developing—including India, Pakistan, and Bangladesh have already enacted required domestic legislation. 

The local industry has been making representations that imports are being made at lower prices than the normal value into the country.

Meanwhile, Development Strategies and International Trade Ministry said Sri Lanka is in the process of rationalization of its tariff regime and will also phase out Custom duties on imports under free trade agreements—other than items, which are not subject to tariff liberalisation. 

“With these developments there can be tendency to resort to dumping or subsidization of their goods into Sri Lanka, thereby creating an unfair competition and injury to domestic industry,” a ministry statement noted.

The new Anti-Dumping & Countervailing Act define specific criteria to determine when a product is to be consider dumped and provide provision to levy duties on imports of products that are benefiting from dumping or subsidization. 

However, mere complain that goods are dumped will not be sufficient to levy anti– dumping duty. It should be done through a process where application should be submitted by the industry for initiation of anti – dumping investigation and imposition of anti – dumping duty. 

Thereafter, following an investigation based on submission made by domestic industry to the Department of Commerce, it will make a preliminary determination and thereafter final determination on whether to impose anti – dumping duty, if it is established that imports have caused injury to domestic industry. 

The procedures will also allow both interested parties as well as affected parties to present their submission and their case before the authority. 

These two Acts will be implemented by the Director General of Commerce and will be subject to decision making process through an inter-ministerial committee and final duty imposition will be made by the Finance Ministry.

Thus, while the receiving of application, investigation and recommendation will be made by Director General of Commerce and the inter–ministerial committee, it is the Finance Ministry which will levy such duty. 

In addition to anti–dumping, the section on countervailing and subsidies will provide provision to take remedial measures against other unfair trade practices, because apart from dumping, countries also resort to the subsidisation of their exports to Sri Lanka. 

Subsidies that are granted by other countries to their exporters which are categorized as actionable subsidies will be addressed by way of levying anti–subsidy countervailing duty equivalent to subsidy granted, after investigation and determination. 

The section on safeguards in the Act, on the other hand, authorizes to restrict imports for temporary period if it is established after investigations carried out by Department of Commerce that imports are taking place in such increased quantities to cause a serious injury to the domestic industry that produces like or directly competitive products.

Meanwhile, the Development Strategies and International Trade Ministry noted that continuation of a distorted import tariff regime will not make domestic industry internationally competitive. 

“What is important is to create necessary economic environment for entrepreneurs to be competitive and protect them from unfair trade practices. These two bills enacted in Parliament will enable to achieve this objective,” it said. 

The ministry, as a part of economic development strategy and new national trade policy, will be entering into free trade agreements at bilateral level particularly with growing large economies such as India and China which are progressing well. 

“The FTA with Singapore already been signed. We propose to commence negations with Thailand and FTAs with Malaysia and Bangladesh are on pipeline. Under these FTAs, we will be undertaking tariff liberalization programme, while seeking market access from these countries.

As we implement tariff liberalization programme under these initiatives, with removal tariff and also removal of CESS in a phased-out manner, such agreements should not lead to import surges and dumping of products into the domestic markets. 

Therefore, the new domestic legislation will address such concerns. These two acts are therefore, two significant enactments, which will contribute and support the development of International trade,” the ministry said.