Govt to safeguard local industries through anti-dumping duty, quantitative restrictions
KATHMANDU, June 5: The government has stepped up exercises to finalize a draft of Safeguard, Anti-dumping and Countervailing Act, aiming to provide protection to the local industries by imposing additional duty and quota restrictions for imported items that are sold at unfairly cheaper rates in the market.
The finalization of the Act has been rushed mainly as local manufacturers complained that cheaper goods mainly from neighboring China and India have flooded the market unfairly and was threatening some domestic industries.
The Act, once enforced, would allow the government to impose ´anti-dumping duty´ in case the import price of a product remained cheaper than its prices in the exporting country.
Similarly, the draft Act envisages to introduce an additional ´countervailing duty´ and ´safeguard measures´ that include safeguard duty or quantitative restriction if the dumped goods affected the domestic products, inflicting huge loss to the local producers.
Though Nepal was liable to introduce such laws before 2004 July as per the commitment with World Trade Organization (WTO), government apathy and lack of pressure from business community delayed the process.
“The draft act is chiefly aimed at protecting the local industries at a time when the dumped goods has been eroding the competitive capacity of domestic products and safeguarding the local goods by restricting the import quantity of competitor imported goods,” said a senior official at the MoCS. “We are finalizing the draft after one round of discussion with stakeholders and line ministries within one month.”
Goods that are produced in the exporter countries with subsidy are also to be restricted with additional duty.
However, the act has provisioned that no safeguard duty will be imposed if the quantity of the dumped competitor goods is less than three percent of the total imports of such goods from a single least developed country. Similarly, safeguard duty would not be imposed if the dumped goods imported from more than one least developed country constitute less than nine percent of total imports of such products to Nepal.
“Safeguard duty could be imposed for four years and could be extended up to 10 years if the government deems necessary,” said the source.
The act has also stipulated to impose special safeguard duty to set up necessary industry within the country in the case when serious decline is reported in the foreign currency reserve and serious problem emerged in balance of payment.
Likewise, special safeguard duty is slapped on imports of agriculture goods that go beyond the accepted limit at dumped price at domestic market.
Similarly, the government can execute anti-dumping and countervailing duties for five years each with provision to be extended to ten years if it is deems necessary in case of growing threat to domestic industry from dumped foreign products.
The government can slap interim duty on the dumped goods for two months since the investigation on the imports of such goods with the provision to be effective for up to nine months. The World Trade Organization (WTO) should be notified by the government about the imposition of the anti-dumping and countervailing duty for the dumped products.
“The duty for the dumped products could be ascertained among the dumping margin, subsidy margin and loss inflicted to the concerned domestic producer whichever is lower,” said the source.
The act also stipulates the completion of the government investigation on reported dumping of goods to complete within six months of its commencement subject to the extension for up to another six months if needed.