Posted: 4 years ago

Does Georgia Need an Antidumping Law –The Opinions of Specialists and World Experiences

The Georgian authorities plan to enforce antidumping laws on January 1, 2020.

The antidumping law will protect domestic production from import dumping. The law was prepared in compliance with World Trade Organization (WTO) principles and requirements, with the aim of safeguarding domestic production from dumping imports and the accompanying losses, Deputy Economy Minister Genadi Arveladze said. 

What does dumping mean? Dumping is a trading operation when this or that product is supplied to the market with a lower price when compared to the original cost, with the aim of ejecting competitors from the market. Economic experts explain that, primarily,  major importers are able to carry out similar market interventions. Some domestic manufacturers think that the absence of an antidumping law helps shape a more favorable environment for imports when compared to domestic production. This factor is one of the reasons why Georgia’s negative trade balance has exceeded 4 billion USD, economic experts noted. 

Does Georgia need an antidumping law? Field specialists have two different positions regarding this issue. Those who object to the antidumping law assert that law enforcement will critically narrow the interest of foreign investors. Moreover, Georgia has already adopted an antitrust law, and no additional regulations are required. 

In 2017, the WTO deputy director general Yi Xiaozhun  expressed skepticism regarding the antidumping law. Antidumping law enforcement has not increased trade turnover in any WTO member country, he noted during his visit to Georgia. 

“You should not expect the antidumping law to increase trade turnover, or protect industry”, the WTO Deputy Director General noted. 

As for supporters of the antidumping law, Shota Gulbani, the President of the Association of Young Financiers and Economists (AYFB) says that the necessity of antidumping law enforcement in Georgian arose many years ago.  Domestic egg and poultry manufacturers, as well as the grain and flour industry face problems with overcoming dumping prices. Any business or industry may face the same problems without protective measures in trade, Shota Gulbani said. 

Vakhtang Charaia, the head of Tbilisi State University Center for Analysis and Prognosis, also backs the enforcement of the antidumping law. The antidumping law means that foreign importers will not be able to stifle domestic manufacturers through dumping tariffs, he said. Eventually, domestic business will get an opportunity to develop, create new jobs,  and strengthen the economy, he noted. 

As for the global practice, according to specialists, the existing theories regarding trade hold that  dumping is an unfair trade practice, but, according to WTO regulations, this practice is not banned. According to WTO regulations, the country hoping to combat  a dumping is entitled to enforce protection mechanisms, if dumping cases and the correlation between dumping imports and losses to domestic industry are confirmed. 

According to specialists, the General Trade Directorate of the European Commission supervises dumping charges in the EU, the International Trade Commission, in the USA, the Ministry of Trade in China, the Frontier Agency in Canada, the Trade and Industry Ministry Department for Commerce in India, and the Economic Ministry handles  imports in Turkey. The US President Donald Trump instructed the International Trade Commission to retaliate for Chinese dumping steel imports.  In the event of the adoption of the antidumping law, the Competition Agency will supposedly provide supervision for dumping activities. All other details about the antidumping bill remain unknown.