Anti-Dumping and Countervailing Duties
Legislation
The Dumping and Countervailing Duties Act 1988 provides the legal basis for investigating dumping and subsidisation, and for the imposition of anti-dumping and countervailing duties. The Act provides a mechanism for maintaining fair levels of import competition for New Zealand producers when the dumping or subsidisation of imported goods causes material injury, or threatens to cause material injury to an established New Zealand industry, or materially retards the establishment of a new industry.
New Zealand's legislation reflects the provisions of the World Trade Organisation (WTO) Anti-Dumping Agreement and Subsidies and Countervailing Measures Agreement.
The Act does not provide an alternative to normal tariffs, but is intended to be used only as a means of dealing with dumped or subsidised goods which are causing injury to domestic producers.
What Is Dumping?
Goods are dumped if their export price when imported into New Zealand is less than their normal value in the country of export.
The export price is the price the importer in New Zealand pays for the goods.
The normal value is the price the goods sell for in the country of export.
There has to be a fair comparison of export price and normal value. This means they must be compared at the same level of trade and for sales made at as nearly as possible the same time. The comparison is normally made at the ex-factory level in the country of export. Adjustments can be made for differences in terms and conditions of sale, levels of trade, taxation, quantities, physical characteristics, and any other differences that affect price comparability.
If there are no domestic sales in the country of export that can be used to determine a normal value, constructed values or sales made to a third country can be used.
If the export price is less than the normal value (after adjustments have been made to ensure the price comparison is fair) then dumping has occurred.
What Is Subsidisation?
Subsidisation involves the provision of specific assistance, directly or indirectly, by a Government, in respect of goods exported to New Zealand.
A subsidy can be an export subsidy, aimed specifically at assisting exports, or it can be a domestic subsidy, which provides assistance irrespective of whether or not the goods are exported.
An investigation must seek to establish the extent to which the goods benefit from government assistance. This means identifying the subsidy programme concerned, and its nature and operation, including the product coverage and the form of assistance provided.
Countervailing duties are imposed to offset injury caused by a subsidy. Under WTO rules, not all subsidies can be countervailed.
New Zealand Producers
An application for a subsidy or dumping investigation is made by or on behalf of a New Zealand industry.
The New Zealand producers making the application must represent a significant proportion of New Zealand production of like goods.
Minimum degrees of industry support for an application are required by the legislation. Further information on the qualifying criteria is shown on the Application Forms available on this site (Subsidy Investigation Guide or Dumping Investigation Guide).
Like Goods
Like goods are goods that are identical to the imported goods or which have characteristics closely resembling those goods.
Material Injury
Material injury includes current material injury, threat of material injury or material retardation of the establishment of an industry. The New Zealand industry must be able to show that dumped or subsidised imports are causing such injury.
The Act sets out the areas that must be examined in relation to material injury. These are:
- Volume of dumped or subsidised imports;
- Price effects resulting from dumped or subsidised imports;
- Consequent economic impact resulting from the volume and price effects of the dumped or subsidised imports.
Investigations
Once an application is received by the Trade Rules, Remedies and Tariffs Group of the Ministry of Economic Development it goes through the following stages:
Acceptance
Upon receiving an application the Ministry will advise the applicant promptly on whether requirements for acceptance are met. If an application is accepted the Ministry must advise the governments of the exporting countries concerned. In the case of a subsidy application an opportunity for consultation with governments must also be provided.
Initiation
Applicants will be advised as soon as possible after acceptance whether the Ministry is satisfied that there is sufficient evidence to justify the initiation of an investigation.
The initiation of the investigation is then made public through notification in the New Zealand Gazette and to all known interested parties, including government representatives of the exporting countries, importers, exporters, and New Zealand producers who are not parties to the application.
Investigation
On initiation of a dumping or subsidy investigation known exporters and New Zealand importers are contacted by the Ministry and requested to provide information to assist the investigation. This may include:
- General information about the company
- Cost of production information
- Sales, pricing and distribution information
The full investigation involves thorough checking of the evidence in the application document, and extensive gathering and analysis of industry and trade data to establish whether dumping or subsidisation is causing injury.
Within 150 days of initiating an investigation, the Chief Executive of the Ministry of Economic Development is required to inform all interested parties of the facts and conclusions likely to form the basis for any final determination. This gives parties an opportunity to comment.
An investigation cannot take longer than 180 days from initiation. Within that time the Minister must make a final determination of whether or not the goods are dumped or subsidised and are causing material injury to the domestic industry.
Remedies
Action to impose anti-dumping or countervailing duties can be taken by the Minister of Commerce only when the Minister is satisfied that injury to the domestic industry is being caused by the dumped or subsidised imports.
Anti-dumping and countervailing duties may not exceed the level of the dumping margin or the amount of the subsidy. The level of duty should not be greater than is necessary to prevent material injury.
Anti-dumping or countervailing duties are collected by the New Zealand Customs Service.
Anti-dumping or countervailing duties cease to be payable on the goods five years from the date first imposed unless at that date the goods are subject to a review. A review examines whether the expiry of the duty would be likely to lead to a continuation or recurrence of dumping or subsidisation and injury. The duty remains in place pending the outcome of the review. If a review finds that the duty should stay in place the duties remain in place for a further 5 years and can be subject to further 5 yearly reviews.
Provisional Measures
The Minister of Commerce may impose provisional measures when satisfied that there is reasonable cause to believe that:
- The goods are being dumped or subsidised; and
- As a result, material injury to an industry has been or is being caused or is threatened, or the establishment of an industry has been or is being materially retarded; and
- Action is necessary to prevent material injury being caused during the remaining period of investigation.
Retrospective Measures
The Minister of Commerce may impose anti-dumping or countervailing duties retrospectively for the period for which provisional measures, if any, have been applied.
In addition, in special circumstances, the Minister may levy anti-dumping or countervailing duties retrospectively on goods entered for home consumption not more than 60 days prior to the date of the application of provisional measures.
Undertakings
The Minister of Commerce may accept undertakings by the government of the country of export, or by the exporters of the goods, that future trade to New Zealand will be conducted so as to avoid causing or threatening to cause material injury. or materially retarding the establishment of a New Zealand industry.
Any price increases resulting from undertakings cannot exceed the margin of dumping or amount of subsidisation.
Undertakings cannot be considered unless the Minister is satisfied that there is reasonable cause to believe in relation to the importation or intended importation of goods into New Zealand, that -
- The goods are being dumped or subsidised; and
- By reason thereof material injury to an industry has been or is being caused or is threatened or the establishment of an industry has been or is being materially retarded.
Following acceptance of an undertaking, the investigation of injury can be completed if the Minister or the Government of the country of export or the exporter so desire.
Undertakings are subject to the same time limits as anti-dumping or countervailing duties.
Reviews and Reassessments
Once anti-dumping or countervailing duties are in place any interested party may request that a reassessment or review take place. To do this the request must be supported by evidence justifying the need for a review or reassessment.
The Chief Executive may initiate a reassessment of any rate or amount of anti-dumping or countervailing duty on the Chief Executive's own initiative.
A review involves a re-examination of material injury and the need for the continued imposition of anti-dumping or countervailing duties.
The Chief Executive has up to 180 days to complete the review.
A reassessment is a re-examination of the rate or amount of anti-dumping duty or countervailing duty, including any formula used to establish such a rate or amount. There is no statutory time limit for completing a reassessment.
Notices
Notices are published in the New Zealand Gazette, including the Customs edition, and are given for:
- Initiation of investigations, reviews and reassessments;
- Imposition of provisional duties;
- Final determinations;
- Termination of investigations (including termination on acceptance of an undertaking);
- Reassessment and revocation of duties.
Third Country Dumping and Subsidisation
If requested by the government of a third country, the Minister may impose anti-dumping or countervailing duties on dumped or subsidised goods imported into New Zealand. This requires an investigation to establish that such imports are causing injury to an industry in the third country.
International Obligations
World Trade Organisation
The WTO Agreement on Implementation of Article VI of GATT 1994 (the WTO AD Agreement) and the WTO Agreement on Subsidies and Countervailing Measures (the WTO SCM Agreement), provide the international framework of rules and obligations on which the New Zealand legislation is based.
ANZCERTA
Australia and New Zealand have agreed to dispense with anti-dumping action in relation to goods produced in either country. This applies only to goods which qualify for duty free access under ANZCERTA.
It is still possible to take countervailing action against subsidised goods from Australia.
New Zealand - China Free Trade Agreement (due to come into effect on 1 October 2008)
Existing WTO rights and obligation on anti-dumping and countervailing duty procedures are retained. See Trade Remedies under the New Zealand - China Free Trade Agreement.
New Zealand-Singapore Closer Economic Partnership Agreement
New Zealand and Singapore may take anti-dumping and countervailing action against each other, but in the case of anti-dumping action higher de minimis dumping margin and negligible import volume thresholds apply for initiation and termination purposes. Anti-dumping and countervailing duties will cease after three years unless reviewed, rather than after five years as provided for under WTO rules. See Agreement between New Zealand and Singapore on a Closer Economic Partnership [link to MFAT website].
New Zealand-Thailand Closer Economic Partnership Agreement
Existing WTO rights and obligations on anti-dumping and countervailing duties procedures are maintained. See Trade Remedies under the New Zealand-Thailand Closer Economic Partnership Agreement.
Trans-Pacific Strategic Economic Partnership
Existing WTO rights and obligations on anti-dumping and countervailing duty procedures are retained. See Trans-Pacific Strategic Economic Partnership Agreement [link to MFAT website].
Other Agreements
New Zealand has trade agreements with Pacific Forum Island Countries and Canada, which require certain notification and consultation procedures to be carried out in relation to anti-dumping and countervailing actions.
Further information is available from the Trade Rules, Remedies and Tariffs Group.
Applications
Application Forms set out the information required for a subsidy or dumping investigation.
Application Forms are available on this website at: Subsidy Investigation Guide or Dumping Investigation Guide.
Advice and assistance in completing the application can be provided by the Trade Rules, Remedies and Tariffs Group.
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