There is no need for anti-dumping legislation

Apr 03, 2018 Features / Columnists, Peeping Tom

---

There has been a call from within the local private sector for the government to institute anti-dumping legislation. The call has come from a leading official of the Private Sector Commission but it is not clear whether that call enjoys the support of the entire PSC.
The call comes amidst claims that imported beer is being sold at six bottles for $1,000 which undercuts local beer sales. However, the fact that a competitor can undersell another does not constitute dumping.
There are generally three conditions which have to be met for dumping to be established. First, the imported price of a product must be priced below that which it is sold in the home market of the country of production. The test is whether the imported item is being sold below what it would fetch in the country in which it is produced.
The second is that the material injury must have been caused within the market of the importing country. It is not enough that an imported item is being sold below cost or what it would fetch in its home market. If there is little or no injury to the importing market, then a case of dumping cannot be established.
The third factor is that there must be a link between the item being allegedly imported and the injury caused. The injury must be related to ‘dumped’ imports. It must not be caused by other factors.
Anti-dumping measures can only be applied after all three conditions have been established, and after the accused company has been provided with an opportunity to be heard. There is therefore a need for governments to proceed with great caution before instituting anti-dumping legislation. They should not allow influential voices within the private sector to force them into precipitate action.
Anti-dumping legislation is not usually intended to protect against cheap, substandard or inferior items. There are other laws, which deal with the issue of quality and safety.
The private sector official was reported to have been saying that the private sector has been preaching the need for antidumping legislation for the past ten years. This is very strange admission since the private sector was hand-in-glove with the previous government in passing legislation in 2006 establishing a Competition and Fair Trading Act.
It is not wholly true therefore to say that Guyana does not have anti-dumping legislation. Anti-dumping legislation is normally part of what is known as fair competition legislation. Guyana is signatory to such legislation.
Guyana is part of the Revised Treaty of Chaguaramas, which seeks to reduce distortions to trade and reduce uncompetitive business practices. Under the Revised Treaty, Member-states are required to establish an authorities, usually called competition commissions, to investigate and address complaints made to it by the Caricom Competition Commission or from Member states.
Guyana has a Competition and Fair Trading Act, which it passed in 2006 to be in compliance with the Revised Treaty. The Act gives wide-ranging powers to the Competition Commission to investigate unfair trading and business practices.
While the act does not specifically mention anti-dumping, it does not preclude the Commission from investigating dumping.
There is nothing, therefore, preventing any local company, which has suffered injury as a result of alleged dumping, seeking resource by asking the Competition Commission to investigate and take the necessary action. To ask the government to pass anti-dumping legislation when there are existing avenues of recourse for anti-dumping, sounds like an appeal for protectionism.
Protectionist policies destroyed the business environment in Guyana. It created a culture in which some companies sheltered under protections offered by the State, including the shutting out of competition.
Liberalization is now an international norm. Guyana will stand exposed if its attempts to pass any legislation which would allow it to reintroduce protectionism in the name of anti-dumping measures
Those Guyanese companies, which feel that they are being injured because of unfair foreign imports, are free to make a formal complaint to the Competitions’ Commission and to have those complaints investigated. If they have information that any company is importing a product at a price below what the same product is being sold for in its home market, a complaint can be filed.
The Revised Treaty of Chaguaramas has also established a regional Competitions Commission, which can monitor, investigate, detect, determine or take action to prohibit or penalize companies which distorts competition. There is therefore no need for any new anti-dumping legislation.
There are provisions within the local law and within Community law to address any concerns, which companies in Guyana may face in respect to unfair competition.

---

---