Chapter 9 Risk Prevention: Legal Power to Respond to Anti-dumping

Since my country’s export products of sodium saccharin and alarm clocks were complained by the European Union in 1979, my country’s export products have been subject to anti-dumping charges one after another abroad. By the end of 2006, more than 400 anti-dumping cases had occurred, ranking first in the world. China has become the hardest hit area of ​​anti-dumping. After joining the WTO, with the rapid elimination of various tariff and non-tariff barriers, anti-dumping will become a unique and effective trade policy tool for various countries, and its importance will become increasingly prominent.Many countries or regions will rely more on anti-dumping measures to crack down on Chinese products and protect their own industries.However, from a global perspective, the anti-dumping environment of my country's export enterprises is likely to further deteriorate. Therefore, the strategic research and practice of my country's export enterprises to deal with anti-dumping is urgent and imminent!

In world trade, encountering anti-dumping charges is sometimes unavoidable, but why is my country often the target of public criticism?In this regard, we can think about it from two aspects: external reasons and internal reasons. (1) External reasons 1.The economic situation of the importing country.In recent years, the economies of countries with which my country has trade relations (such as the European Union) have generally suffered from economic depression, rising unemployment, serious inflation, and even more difficulties in industrial restructuring.Therefore, in order to achieve the purpose of protecting the domestic market, trading countries frequently use anti-dumping measures to restrict the entry of foreign products.In addition, since the Uruguay Round Agreement requires countries to significantly reduce tariffs and cancel import quantity restrictions, in order to offset the impact of this negotiation result on their own industries, countries have adopted anti-dumping, a convenient and effective measure, to protect domestic industries.Since China has basically been in a surplus position in foreign trade in recent years, it will inevitably stimulate foreign competitors, and to a certain extent, it also prompts them to find ways to use the anti-dumping law to accuse my country of dumping of export commodities.Therefore, it is no accident that China has become one of the main targets of its anti-dumping.

2.The contradiction between the strong overall economic strength of the importing country and the lack of competitiveness of individual industries.Within the EU, for example, not all industries are as strong as the EU economy as a whole.The main reason is that the cost of the enterprise itself is too high and the management is not good, which leads to the lack of competitiveness of the products.In fact, this situation is definitely not caused by imports, but producers in the EU seem to be more willing to attribute these problems to the impact of foreign products, providing excuses for their trade protectionist actions.EU trade protectionists frequently file dumping charges against Chinese products, with the aim of excluding Chinese products from the EU market.In addition, because the Chinese companies did not actively respond to the lawsuit, to a certain extent, it gave the EU the illusion that Chinese companies did not dare to respond to the lawsuit and that it was easy to implement anti-dumping against China, so they frequently conducted anti-dumping investigations against China.What's more serious is that it will bring a bad implication to other countries that China is the "culprit" that caused the economic recession of other countries, which will lead to a chain reaction of anti-dumping of Chinese products worldwide.

(2) Internal reasons 1.Price competitiveness is strong.The price competitiveness of Chinese products is generally the main reason for anti-dumping investigations.In the fierce competition with similar products from importing countries, because our products have advantages in labor and raw material prices, they are often in an obvious advantageous position in the competition.Moreover, many countries in the world do not recognize my country as a market economy country, and do not recognize my country's domestic prices as market prices. This characterization makes Chinese products have to accept the "surrogate country" method and be levied high anti-dumping duties.

2.The order of foreign trade operation is chaotic.Due to the influence of extensive management ideas, a large number of enterprises are not focusing on quality, but are keen on price competition. They lack long-term development plans and focus on immediate interests. In order to expand exports, enterprises often compete viciously in exports and compete to lower prices, resulting in Prices keep falling, creating excessive competition.Due to the imperfect function of the industry associations and the lack of an effective control mechanism for illegal enterprises, it is easy for foreign importers to adopt various tactics to continuously lower the export prices of Chinese enterprises, and finally reduce the export prices below the domestic prices, and impose strict regulations on imports. This situation constitutes dumping.

3.Lack of courage and courage to deal with anti-dumping.Many enterprises in our country evaded, tolerated and kept silent on the anti-dumping allegations, which to a certain extent "encouraged" enterprises in importing countries to continuously use anti-dumping means to put pressure on China. As mentioned above, anti-dumping measures, as a trade policy tool allowed by the WTO, will exist for a long time within the WTO framework. Since the role of various tariff or non-tariff trade barriers has been greatly weakened or completely disappeared after my country's accession to the WTO, other countries or regions will More reliance on anti-dumping and countervailing measures to crack down on Chinese products and protect domestic industries.Therefore, the research on anti-dumping countermeasures of my country's export enterprises has far-reaching significance.In my opinion, enterprises should firstly prevent the occurrence of anti-dumping, secondly, actively respond to the anti-dumping investigations that have already been filed, and finally, after the dumping ruling is confirmed, they should pay attention to actively taking remedial measures, that is, from the anti-dumping prevention in advance, response in the event and compensation after the event. In one aspect, the Company actively established a legal risk prevention system to effectively respond to anti-dumping allegations.

(1) Prevention in advance 1.Follow the trade rules, correct the understanding, enhance the anti-dumping concept and awareness of enterprises, understand the nature and consequences of anti-dumping, and the countermeasures, encourage enterprises to actively respond to timely defenses, and take up anti-dumping weapons to protect themselves. 2.Establish and improve the anti-dumping early warning mechanism.Enterprises should establish a team of anti-dumping professionals with knowledge and business knowledge, and conduct special research and special prevention of anti-dumping.Closely following the international market conditions is an important link to prevent anti-dumping. In daily business activities, pay attention to studying the situation of competitors, including domestic production factors of their products such as sales prices, production costs, sales channels, etc., and accumulate relevant data and materials.In this way, it is possible to conduct a risk assessment on the possibility of new anti-dumping investigations, and establish a correction mechanism to limit exports or adjust export prices, thereby reducing the risk of anti-dumping investigations or reducing the extent of damage.It is suggested that enterprises can refer to foreign practices, determine a certain proportion of the fee share based on the export volume of each enterprise, and designate a special agency or customs to collect it, and establish a special fund, which is mainly used to support anti-dumping responses and provide enterprises with international market information. Eliminate the worries of the enterprise.

3.Standardize the corporate financial system. After the implementation of the new accounting system in 1993, my country's financial system is in line with international practice, but there are still a considerable number of enterprises that are not strict in terms of production costs and other financial accounting systems, and their accounts cannot withstand inspection, and some even have no original documents. and subsidiary accounts.These are precisely the key targets of anti-dumping investigations.Some enterprises are unable to provide accurate business information such as production and operation, and cannot provide sufficient evidence to prove that dumping is not constituted when filling out the question-and-answer sheet.

(2) Response in the event 1.Respond calmly and act proactively.After the anti-dumping accusation occurs, one should remain calm, actively respond to the lawsuit, and try to avoid the adverse consequences caused by the abuse of foreign anti-dumping measures.At this time, the measures that enterprises can take are: conduct a comprehensive investigation on the importing domestic manufacturers, such as production and business conditions, to consider whether the other party may file an anti-dumping lawsuit; Analyze our position and prepare for further measures; if the impact of anti-dumping cannot be avoided, try to increase or control the export price in order to have a good result in the process of responding to anti-dumping; pay attention to controlling export quotations Or counter-offer to prevent the other party from inducing our quotations in order to obtain information on our export prices; The export volume of each enterprise; strive to communicate and negotiate with the other party, give appropriate commitments, and try to avoid the occurrence of anti-dumping lawsuits.

2.Hire an experienced lawyer.In the selection of lawyers, we should choose those lawyers who have anti-dumping experience, are familiar with the basic knowledge of the industry, my country's basic national conditions and laws, and have strong public relations capabilities.Anti-dumping lawsuits are time-consuming, complicated and professional, and involve a series of issues such as product production, financial accounting, and management. Therefore, if a lawyer has anti-dumping experience, he will be able to understand the requirements and key points of each stage of anti-dumping investigations. Only by knowing it well can it be possible to give comprehensive, correct, timely and accurate guidance to enterprises in responding to lawsuits, and to improve the efficiency and quality of responding to lawsuits.In addition, when hiring a lawyer, the following issues should be considered: the anti-dumping experience of the law firm and the lawyer; the number of responding companies involved and the arrangement of the number of lawyers; whether the company hires individually or collectively; whether the lawyer knows the industry ; Whether there are better Chinese lawyers or consultants to participate; whether the lawyer's fees are reasonable, etc.In order to better cooperate with lawyers to carry out work, after hiring a lawyer, the company should ask the lawyer to give the company a detailed case schedule, as well as the main tasks and requirements of each stage, and explain the interrelationships and precautions between each stage. And timely pointed out the main tasks and problems to be solved at each stage, so that the enterprise can have a bottom-up mind, facilitate the timely arrangement of manpower and material resources, and prepare for responding to the lawsuit.

3.In order to avoid greater losses, you can actively seek out-of-court settlements.If it is estimated that there is no hope of winning the lawsuit, the importer can be entrusted to actively negotiate with the other party, make a commitment on the export quantity or price or reach an automatic restriction agreement, so as to avoid litigation.In the process of responding to an anti-dumping case, sometimes the importing country shows a desire to settle it out of court. After analysis, if the enterprise is not sure of winning, it can seize the opportunity to actively negotiate with the other party and make some necessary concessions to reach an agreement.In particular, it should be noted that one must not ignore the analysis, panic when encountering anti-dumping allegations, and immediately seek selfishness in order to seek peace and peace, because in this way, the other party will definitely raise prices on the ground and make more progress, and the losses suffered will be even greater. (3) Make up after the fact 1.Pay attention to review opportunities and strive to re-enter the market.The validity period of the final anti-dumping tax is generally five years, but this does not mean that within five years there is no effort to change the final anti-dumping ruling, so it is necessary to strive for the opportunity to re-enter the market.Enterprises should make full use of the review opportunity to overturn or change the original award. 2.Develop reasonable circumvention measures.According to the "Anti-dumping Agreement", once our products are subject to other countries' anti-dumping sanctions, it means losing the country's market for 5 years. Therefore, studying evasion measures in line with WTO rules will be an effective way to open up a second battlefield for exports.These reasonable circumvention actions can be to establish production, research and development, and sales systems on a global scale.Through foreign direct investment, mergers, acquisitions of local enterprises, etc., resource allocation is extended to foreign countries, so that exports are transformed into internal trade of enterprises, and anti-dumping trade barriers are effectively bypassed.Transform the export behavior of Chinese enterprises into domestic behavior with the nature of international cooperation in the country where the foreign businessman is located, thereby avoiding anti-dumping investigations. All in all, enterprises should pay attention to the establishment of an anti-dumping legal risk prevention system, and establish and improve my country's anti-dumping countermeasures by actively building a sound anti-dumping mechanism to reduce the losses caused by EU anti-dumping to my country's export enterprises and create more and greater trade. and investment opportunities, thereby ensuring the steady growth of China's overseas exports.