THE CASE OF ALLEGED DUMPING ON THE EXPORT OF INDONESIAN PAPER PRODUCTS TO SOUTH KOREA (Case Study)

Dumping in the context of international trade law is defined as a form of international price discrimination carried out by an exporting company or country, which sells its goods at a lower price in foreign markets than in its own domestic market with the aim of making a profit. In simple term, it is a trade practice carried out by exporters by selling commodities on the international market at a price less than the fair value or lower than the price of the goods in their own country. By far, there are at least four types of dumping which are seen from the point of view of exporters, market power, and import market structure;

1. Market Expansion Dumping,

2. Cyclical Dumping, State Trading Dumping,

3. Strategic Dumping, and

4. Predatory Dumping.


First of all, the practice of dumping is obviously unfair because for the importing nation (host country), it will cause losses to the business world or industry of similar domestic goods with a flood of goods from exporters whose prices are much cheaper than domestic goods; resulting in similar goods being unable to compete regionally which will kill the domestic market for similar goods in a host country.

The practice of anti-dumping is one of the pivotal issues in carrying out international trade in order to create a fair trade. Owing to this matter, the Anti-Dumping Agreement which is mentioned on the Implementation of Article VI of GATT 1994 has been enforced and strictly regulated. Therefore, by binding the product tariffs along with their implementations equally to all trading partners of WTO members are the key determining factor of such a smooth flow of trading goods internationally.


CASE STUDY: THE REPORT OF ALLEGED DUMPING ON THE EXPORT OF INDONESIAN PAPER PRODUCTS TO SOUTH KOREA

In the case of the Anti-Dumping Paper Products with South Korea, second of all, Indonesia as a country that conducts international trade is also a member of the WTO. The case began to stem from the South Korean paper industry filing an anti-dumping petition against Indonesian paper products to the Korean Trade Commission (KTC) in September 30th 2002. Several Indonesian companies that had been accused of dumping were PT. Indah Kiat Pulp & Paper Tbk, PT. Pindo Deli Pulp & Mills, PT. Tjiwi Kimia Tbk Paper Mill and April Pine Paper Trading Pte Ltd.

There were 16 types of Indonesian paper products which were charged with dumping ranging from uncoated paper and paper boards used for writing, printing, or other graphic purposes to carbon paper, self-copy paper and other transfer paper. For the first time, Indonesia as the main plaintiff finds it rather unfavorable over the application of trade regulations implemented by other WTO members. The country then filed an objection to the application of Korea's anti-dumping policy to DSM (Dispute Settlement Mechanism) and won the dispute afterwards.


CASE SETTLEMENT

In the case of dumping practice with South Korea, it involves several subjects of international law which clearly illustrates that this case is in international scope between two sovereign countries in Asia and they are both members of the WTO. As mentioned from the beginning, Dumping is an act of selling imported products at a price lower than the normal price which is considered an illicit business activity in the WTO agreement. The legal aspect lies in here is that such an act of violation cited in the articles of WTO agreement (especially, in the trade agreement and tariff decision covered in the GATT) has been breached by one party where South Korea was found and convicted by an international law not adhering the policy set.

While the previous DSB for the paper dumping case had favored Indonesia, such an act of retaliation for the defendant to appeal the case is also permitted under the WTO agreement. For example, The Secretary of the Directorate General of International Trade Cooperation at the Ministry of Trade in November 2005 said that South Korea must recalculate the dumping margin on the imported paper products from Indonesia and the time limit given to implement the decision must be no later than eight months after the decision was issued or ended in July 2006. Overall, the DSB Panel committee finally assessed and concluded that the South Korea importers had made a mistake in trying to prove the practice of paper dumping done by Indonesian exporters (accusing Indonesia as its trading partner to have carried out a dumping business practice on its exported paper products).


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