Dumping and Antidumping

Dumping and Antidumping 

Dumping is when a product is imported into a country’s market and sold at a price that is lower than the price charged in its own domestic market. This practice can cause serious harm to national production in Mexico.

The country’s foreign trade policy is very open, so special attention must be paid to prevent dumping and protect its industry. However, this is a task that many foreign trade operators do not always know how to manage. For this reason, Mexican producers, importers, and customs brokers have a major role to play in studying antidumping practices.

In order to counteract the effects of dumping, Mexico imposed several countervailing duties in the mid-1990s on products such as bicycles, shoes, textiles, clothing and accessories, steel and manufactured goods, toys, etc.

One of the clearest examples of antidumping regulations in Mexico was when products originating in China were prohibited entry for many years. Then, when China joined the World Trade Organization (WTO), Mexico signed an agreement to implement temporary transitional measures on imports of certain Chinese goods. Some of the countervailing duties were eliminated immediately with this agreement, but others were gradually written off over a period of four years, which ended on December 11, 2011.

Mexico has initiated the most antidumping investigations of almost any other WTO member country. Out of 301 total cases, 274 were related to dumping practices, 23 to undervaluation, and four were related to safeguarding. Products originating from the United States stand out at   25%, followed by China at 23% and Brazil with 9%.

By mid-2014 there were 47 countervailing duties currently in force: 44 antidumping measures and three related to safeguarding. The duties cover 39 products originating in 14 different countries, with China standing out as the target for 38% of these measures. Products with these duties have maintained the historical trend, many of them belonging to the basic metals and metal by-products industry.

Considering the past and current situation, it is likely that antidumping investigations will continue to result in the imposition of countervailing duties or other measures intended to compensate for damages to domestic production. It is important for importers and other foreign trade agents to be aware of these changes.

Reference: Estrategia Aduanera