Introduction: general considerations on Anti-dumping and WTO law and summary of the legal issues in this case
The WTO rules on dumping and anti-dumping reflect a political bargain, negotiated in the context of a fundamental normative dissensus as to whether dumping is a “wrong” practice and why.
In the GATT, there is an apparently strong statement against dumping, which can be defined as the sale of a product in the country of importation at a lower price than in the country of exportation, or at below cost. Dumping, the GATT says, is to be “condemned.” However, this is immediately followed by the qualification “if it causes or threatens material injury to an established industry in the territory of a contracting party or materially retards the establishment of a domestic injury”(Article VI.1: emphasis added).
Even though dumping with these injurious effects is to be “condemned,” the GATT contracting parties obviously did not agree on making dumping illegal in the GATT. Thus, there is no prohibition on dumping in the GATT, however much it may be “condemned,” and no remedy available under Article XXIII against dumping. Instead, the GATT permits the unilateral imposition of anti-dumping duties against the dumped products, as long as these do not exceed the margin of dumping.
It is extremely unclear, on any plausible normative theory of multilateral trade liberalization, why price discrimination of the kind “condemned” as dumping undermines the gains from bargained trade concessions.