Competition legislation does not address dumping

May 20, 2018 Letters

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Dear Editor,

I write to address some points raised in the Peeping Tom article of April 3, 2018 on the subject- “There is no need for anti-dumping legislation”.
Specifically, I write to clarify the role of the Competition and Consumer Affairs Commission (CCAC) relative to the issue of dumping and to comment on the application of the Competition and Fair Trading Act of 2006 in relation to dumping.
In this letter I will not address or comment on whether or not Guyana needs anti-dumping legislation.
The Competition and Fair Trading Act (CFTA) of Guyana exists to promote, maintain and encourage competition, to prohibit restrictions to or distortions of competition, to promote the interests and wellbeing of consumers and to establish a Competition Commission and for connected matters. Generally, a country’s competition legislation is applicable and enforceable only within its borders and Guyana’s competition legislation is no different.
This, however, does not preclude the CCAC from investigating competition concerns involving an international company which has a presence in Guyana in the form of a subsidiary.
While domestic competition legislation has domestic application and enforcement, there are other mechanisms in place to deal with competition issues that have a cross-border effect, such as supra-national institutions that address international competition concerns.
In the context of CARICOM, one such institution is the CARICOM Competition Commission (CCC). However, one must tread with caution when applying competition legislation to ‘unfair’ practices of an international dimension because the lines between what is anti-competitive conduct under competition law and what is unfair trade practices under the ambit of international trade while different, are often blurred.
When we speak of the issue of dumping, we are delving into the realm of international trade and the abuses that do occur there. To address the issue of dumping the World Trade Organisation (WTO) has provided for member states to institute anti-dumping remedies subject to a number of factors including, but limited to, proof of dumping and proof of injury to domestic industry.
While it is recognised that there are often similarities between dumping and abuse of dominance (the latter is provided for under the CFTA) specifically as it relates to competition cases of predatory pricing and price discrimination, the methodologies used to investigate competition cases of abuse of dominance are vastly different from the methodologies used in dumping investigations.
Additionally, the objectives of competition law often times conflict with the objectives of anti-dumping remedies. Anti-dumping remedies are often viewed as protectionist policies or tools to insulate domestic industry from competition from foreign companies.
These protectionist policies often times have the effect of limiting competition in the domestic market particularly if what is constituted as ‘dumping’ is in actual fact healthy price discrimination and healthy competition, such wrongful classification and application of anti-dumping remedies in the form of duties etc. would likely result in increased prices and negatively impact consumer welfare and interests.
It has to be stated that competition legislation is never about protecting a competitor, whether that competitor be a domestic competitor or not, but about protecting and promoting competition in the market and safeguarding consumer welfare and interests.
Anti-dumping measures, including anti-dumping legislation, however, is often chiefly concerned with protecting domestic industry.
To say that anti-dumping legislation is part of competition legislation is inaccurate as the two have some conflicting objectives and different investigation methodologies.
Additionally, because of its international dimension, anti-dumping legislation or policies are best dealt with by the Government agency responsible for international trade or another duly authorized agency.
The distinction between dumping and competition policy (in the context of competition legislation) is reflected in the Revised Treaty of Chaguaramas (RTC) as the two are addressed under separate areas and dealt with differently.
In the RTC, dumping is addressed under Chapter Five – which deals with Trade Policy (the whole of Part Five, Chapter 5 in the RTC is devoted to dumping and it outlines how member states are to address the issue of dumping).
Competition policy is addressed under Chapter Eight of the RTC (Part One of Chapter Eight is entirely devoted to the “Rules of Competition”).
It is in this section that one would find the obligation of member states to establish and maintain competition authorities to enforce the Rules of Competition.
Guyana’s competition law does not address the issue of dumping nor is it intended to do so, neither is dumping reflected under the Rules of Competition in the RTC.
Dumping can be best addressed under international trade policy and the avenues/institutions that it provides for.
The subjects of dumping and competition policy enforcement are complex in nature and this letter represents my humble attempt at simplifying the rather complex topics, discussions and debates in this area.
There is much more that can be addressed on the issue but I will put my pen to rest here. Should further information, insight or clarification be required on the relationship between dumping and competition enforcement, Guyana’s competition legislation and the role of the CCAC in relation to competition law enforcement, I would be happy to assist.

Lusiean Chapman
Competition Policy Officer
Competition and Consumer Affairs Commission

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