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Thailand Anti-Dumping Law and Practice 101

For those of you who wish to get an overview of Thailand's anti-dumping law and practice, i am posting below an excerpt from my article posted last year in the Expert Guides. 

 

Overview of Thailand’s Antidumping Law

 

By Apisith John Sutham

On October 9, 1991, Thailand enacted antidumping and countervailing duty laws known as the Ministry of Commerce Notification on Principal and Procedure to Collect Surcharge on Unfairly Priced Imports and Subsidized Imports, B.E. 2534 (“1991 MOC Notification”).  The 1991 MOC Notification borrowed much of its content from the U.S. unfair trade statutes, but was not well known.  It was employed only twice in its five-year existence, both times in 1994 antidumping investigations: hydrogen peroxide from India (affirmative) and sorbitol from France (negative).

The 1991 MOC Notification was in effect when the antidumping cases on H-beams from Poland and hot-rolled steel sheet from Russian and the Ukraine were initiated in 1996.  These cases, however, were being administered under the 1991 law’s replacement: the September 14, 1996 Ministry of Commerce Notification on Collection of Surcharge in Response to Dumped and Subsidized Imported Products, B.E. 2539 (“1996 MOC Notification”). 

It could be said that the modern era of Thailand’s anti-dumping history came into existence when Poland decided to challenge Thailand in the World Trade Organization (WTO) for allegedly violating numerous provisions of WTO Anti-dumping Agreement. Because of this and the obsolescence of its anti-dumping law, Thailand in 1999 finally enacted the Anti-dumping and Subsidized Import Act, B.E. 2542 (the “1999 Act” or “Act”). The 1999 Act is largely based on the wording of the WTO Anti-dumping Agreement. To date Thailand has carried out 13 anti-dumping investigations under the Act.  Some of the import products investigated by Thailand under the Act included cold-rolled steel, hot-rolled steel, wire rod steel, phthalic anhydride, citric acid, color television tubes and glass blocks. Not surprisingly, China appears most frequently as the target country.

The Act provides that the Minister of Commerce shall be the government agency responsible for conducting anti-dumping investigations and to issued relevant rules, regulations and procedures. In practice, the Bureau of Trade Interest and Remedy (the “Bureau”) of Department of Foreign Trade (“DFT”) conducts anti-dumping investigations for both dumping and injury. Dumping and injury are investigated simultaneously by Bureau’s different case handlers within the same team. After completing an anti-dumping investigation, the Bureau will submit its recommendations to the Committee on Dumping and Subsidy (the “Committee”) for its deliberation and decisions. The Committee is made up of representatives from various government agencies. In addition, the Act requires that the Cabinet must appoint to the Committee six experts from the following disciplines: international trade, economics, accounting, law, agriculture and industry. The Committee is responsible for initiating an investigation and deciding whether to impose preliminary and final measures.

 

1.         Basics of Thailand’s Antidumping Law and Practice

            In comparison with the antidumping laws and practices of certain developing country WTO members, Thailand’s law is relatively advanced.  As required by the WTO Agreements, Thailand’s antidumping law requires that two basic findings must be reached before antidumping duties may be imposed.  First, there must be a determination that the imports are entering the country at dumped prices.  Second, There must be a determination that the dumped imports are either a cause of material injury or threat thereof to a domestic industry producing a product like the dumped imports, or that the imports are a cause of material retardation to the establishment of the domestic industry. 

Antidumping investigations are initiated and conducted in response to an antidumping petition being filed by a domestic industry or the government self-initiating an investigation.  The DFT prepares reports on the factual and legal findings from their respective investigations and submit them to the Committee for further deliberation and final decision. The Committee – which consists of representatives from the Ministry of Finance, Ministry of Foreign Affairs, Ministry of Industry and the Director-General of the DFT – has ultimate responsibility for the determinations of dumping and injury, and is empowered to adopt, disregard or modify the findings and recommendations of the DFT.

Although required by the WTO Agreement, Thailand has not yet established an independent appellate body to which appeals may be taken on decisions of the Committee (nor, especially given the DFT’s representation on the Committee, could the Committee itself be reasonably viewed as meeting the requirement as an independent entity to review the findings of the DFT). It may be possible that Thailand’s existing court system, in particular, the Central Intellectual Property and International Trade Court, could handle such appeal, but it has no specialized expertise in this area. Until such an avenue of appeal is established in Thailand, every antidumping or countervailing duty determination by the Committee may be at risk of challenge through WTO complaint procedures.

Consistent with WTO requirements, the Committee’s dumping determination is concerned with whether the imported product is being sold at “less than fair value.”  Basically, for market economies, sales are less than fair value when the weighted average, adjusted, ex-factory prices of the imports into Thailand (i.e. “export price”) are less than the weighted average, adjusted, ex-factory prices of above-cost sales of similar or identical merchandise in the exporter’s home or largest third country market (i.e., “Normal value”). In non-market economy cases, export price is calculated the same way, but normal value is not based on the exporter’s price or costs.  Instead, normal value is derived from prices and costs of factors of production incurred in surrogate market economy countries. 

In calculating both normal value and export price, contemporaneous sales are to be compared at the same level of trade, if possible, with adjustments made for differences that directly affect price comparability.  Dumping margins, therefore, must be calculated largely from information supplied to the DFT by the exporter under investigation. To better ensure exporters’ cooperation in an investigation, Thailand has adopted the WTO-sanctioned rule that, if an exporter fails to provide adequate information, the Committee may determine the exporter’s antidumping rate based on “facts available” (otherwise known as “best information available” or “BIA”) which can be a punitive measure consisting of, among other options available, simply accepting the domestic industry’s allegations.

            The Committee’s determination of material injury to a domestic industry must be based on “positive evidence” involving an objective examination of (a) the volume of the dumped imports and the effect of the dumped imports on prices in the domestic market for like products, and (b) the consequent impact of these imports on domestic producers of such products.  Mere claims by domestic producers that they are injured without underlying data to substantiate that their alleged injury was actually caused by the dumped imports are not sufficient to support an affirmative determination of injury.

            Other than its lack of an established independent appellate entity, Thailand’s antidumping law in general tracks and comports with the basic WTO requirements.  Prior to international adopting of the WTO and the detailed requirements of its Antidumping Agreement, general comportment with the GATT’s antidumping code was sufficient and, besides, there was no effective dispute resolution mechanism by which one country could seek to compel another to change its antidumping law and practices.  All of that has changed with adoption of the WTO Antidumping Agreement, and Thailand – like all WTO member countries – will now be held to a more rigorous and enforceable set of international antidumping rules.

 

 

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