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The Rediff Business Interview / Edmund W Sim

'In these times of dumping, the WTO will always benefit developing countries'

Edmund W Sim of White and Case, the global corporate consulting firm specialising in international trade law, has an unusual achievement: he has experience in international trade disputes on virtually every aspect of the import trade and customs laws of the United States. (An aside: While attending college and law school, Sim worked in the office of Vice-President George Bush.) He specialises in trade remedies related to anti-dumping, countervailing duty, customs, foreign investment, intellectual property and other issues.

Sim's cases have involved products from semiconductors to flowers and economies as diverse as China, Japan, Taiwan, Hong Kong, Malaysia, Singapore, Indonesia, India, Thailand, Canada, Brazil, Colombia, Mexico, Ecuador and the Ukraine.

Based in Singapore, Sim represents Asian exporters, governments, organisations in international trade disputes at the US department of commerce and the US International Trade Commission. Syed Firdaus Ashraf interviewed Sim on his visit to Bombay to attend a meeting on anti-dumping organised by the Confederation of Indian Industry.

How do you define dumping?

Dumping is something that you sell outside your home market. This is something where the business grows at a low pricing and that's economic reality. But that, unfortunately, under the World Trade Organisation's rules, is called dumping. Dumping is selling a foreign product in a local market at an uncompetitive price, when you sell foreign goods at prices lower than the domestic market's.

How does a government decide what is dumping and what is not?

Unfortunately this can be decided only on a case-by-case basis. So, the laws have to be very clear in dumping cases. The laws must be very clear and people really need education on these things. So it is up to the government as to how it decides what is dumping and what is not.

What is your opinion on the anti-dumping laws in India?

Every country has a right to protect its industries. In some cases, it is very essential that the local industry is protected against the foreign companies. I feel India needs more proper laws to protect its local industries. You see, there are only four people involved in the entire commerce ministry who look into the anti-dumping cases. Same is the case with China which has only two people to look into dumping matters.

I think the problem is limited resources. India needs to improve on the resource front to improve its dumping laws. The government must certainly set up certain trade laws to look into these matters to protect the Indian industry.

You mean, there is a need for some more anti-dumping laws?

Yes, I feel more expertise is needed in India. You see in Mexico, they have completely given a new look to the dumping issue. At present, there are many people involved in anti-dumping.

Do you think only the developed countries have clear rules, that the developing countries suffer because they lag behind?

Yes, that's true to some extent. I think the developing countries need to fight very vigorously for their rights. And sometimes it works and sometimes it does not. I believe that the developing countries must work together as a force in the World Trade Organisation.

But the WTO's critics say it is discriminatory. For example, the USA has not abolished Super 301 and Special 301, in spite of being a WTO member..

(Super 301: The so-called Super 301 law of the US gives countries one year to remove trade barriers or face retaliatory sanctions. Special 301: The "Special 301" provisions of the Trade Act of 1974, as amended, require the US Trade Representative to determine whether the acts, policies and practices of foreign countries deny adequate and effective protection of intellectual property rights or fair and equitable market access for US persons who rely on intellectual property protection.)

I think Super 301 and Special 301 are major political, not economic, decisions. And in the end, I hopefully think that the Americans will refer more to the WTO rather than using Super 301 and Special 301. So in the real sense, I don't think the 301 factor will be effective after 2005.

India feels it is being discriminated against by the European Union and the US by such punitive laws.

No, the WTO is a place where every country can bring its problems. The WTO is the best mechanism for India. It equalises all the countries at one level. India exports more goods to the US and not the other way round. So the WTO in a way helps India and it equalises the playing rule. So it will always benefit the developing countries.

After signing the WTO agreement, do you think India has gained?

In terms of immediate gain, it is not very clear. But the benefit is that there is a forum for India where it can bring countries that are not keeping their obligations. So the WTO is an independent forum where India can come with its problems.

Take the example of sea turtles. India was exporting sea turtles to some countries. These countries then felt threatened by the Indian seafood and sea turtles. So India complained to the WTO and won the case. Had there been no WTO, India would have been banned from exporting the seafood. So the WTO keeps all the countries under one umbrella and the developing world will not lose.

There is a view that India has opened up very fast to the world compared to other European countries.

It depends on how you look at. The Europeans have reduced the official tariff rates and India has not. Also, you have to look at the structural differences between any two countries. So there are a lot of things involved in this process. So every country has opened up in different ways.

Coming back to dumping, you say it means goods become available at a cheaper price. Now, isn't this what the consumer want?

That's right. The whole purpose of globalisation is that everyone should be better off. But unfortunately the dumping law is a political decision and not economic.

Why is it important to protect domestic industry in times of globalisation and liberalisation?

You have to guard against unfair trade practices of the foreign companies. For example, countries like China and Russia are selling cheap goods in the Indian market. They are in transition and have jumped from control economy to market economy. So anti-dumping laws are important and that is why one of the major countries against whom the Indian government has filed dumping cases is China.

But how does it help? It is believed the whole WTO procedure is very complicated.

No, it works. The International Monetary Fund, the World Bank, the United Nations -- all of them are working. So, I don't think there will be a problem in the functioning of the WTO.

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