The effects of exchange rate fluctuations on the determination of anti-dumping measures in South Africa

Abstract

The main aim of this thesis is to investigate the effects of exchange rate fluctuations on the determination of anti-dumping measures in South Africa. The provisions of Article 2.4.1 of the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 (commonly referred to as “the Anti-dumping Agreement” or “ADA (1994)”), which explain how exchange rate fluctuations should be assessed in calculating anti-dumping measures, are problematic as they are opened to different interpretations. Due to the limited guidance in Article 2.4.1 of the ADA (1994), investigating jurisdictions evaluate each inquiry on a case-by-case basis and to their own advantage. This often results in an unfair calculation of various anti-dumping measures against foreign exporters and countries, leading to a large number of disputes and the lodging of appeals with the World Trade Organisation (WTO) Appellate Body. This thesis investigates these issues using two case studies based on information obtained from non-confidential applications submitted to the International Trade Administration Commission of South Africa (ITAC) by industries within the Southern African Customs Union (SACU). This study confirms that the way in which exchange rate fluctuations are calculated can have a significant effect on the size of the anti-dumping penalties applied by the authorities. The study also shows that the public interest and the welfare effects of anti-dumping measures on consumers are not considered by the authorities in determining such measures. The study recommends that policy makers review Article 2.4.1 of the ADA (1994) with a view to standardising the way in which exchange rate fluctuations are dealt with in the determination of anti-dumping duties and to consider the welfare effects of such measures on consumers and the public at large.