Anti-Dumping Duty On PTA Abolished – Economics – Free PDF Download

 CURRENT AFFAIR

• The government has abolished anti-dumping duty on a chemical called Purified Terephthalic  Acid (PTA).

Purified Terephthalic Acid (PTA)

• PTA is an important raw material which is used in making various products, including polyester
• PTA makes up for around 70-80% of a polyester product and is, therefore, important to those  involved in the manufacture of man-made fabrics  or their components.
• The latest move has come after persistent demand from the manufacturing and textile  industry to source PTA at an affordable rate.

Anti Dumping Measures

• Dumping is said to occur when the goods are exported by a country to another country at a  price lower than the price it normally charges  in its own home market.
• This is an unfair trade practice which can have  a distortive effect on international trade.
• Anti-dumping is a measure to rectify the situation arising out of the dumping of goods  and its trade distortive effect.
• Many countries impose stiff duties (known as anti-dumping duties) on products they believe  are being dumped in their national market,  undercutting local businesses and markets.
• The use of anti-dumping measure as an instrument of fair competition is permitted by  the World Trade Organisation (WTO)

Background

• The anti-dumping duty on PTA was imposed after domestic manufacturers approached the  Directorate General of Trade Remedies (DGTR)  in October 2013.
• DGTR imposed anti-dumping duties on PTA imported from South Korea, Thailand, China,  Indonesia, Taiwan, Iran and Malaysia between  2014 and 2016.
• However, companies using PTA to manufacture polyester products claimed that  the move left them with limited domestic  suppliers of PTA.
• The companies alleged that the cost of PTA became more expensive domestically, which  made their own products pricier and less  attractive for their domestic and international

Directorate General of Trade Remedies

• It is the apex national authority under the Ministry of Commerce and Industry for  administering all trade remedial measures  including anti-dumping, countervailing duties and  safeguard measures.
• It provides trade defence support to the domestic industry and exporters in dealing with increasing  instances of trade remedy investigations  instituted against them by other countries.

TARIFF

• A tariff or customs duty is a financial charge in the form of a tax, imposed at the border on goods going from  one customs territory to another.
• Tariffs applied to imports are usually collected by customs officials of the importing country when goods  are cleared through customs for domestic
• Tariffs can also be imposed on exports also but the import tariffs are the most common type of tariffs and  have been the main focus of attention of GATT/WTO

Non-tariff measures (NTMs)

• Non-tariff measures (NTMs) are policy measures — other than ordinary customs  tariffs — that can potentially have an  economic effect on international trade in  goods, changing quantities traded, or prices or

Similar Case of Mono Ethylene Glycol

• Mono Ethylene Glycol (MEG) is another such raw material used in the manufacturing of polyester and is under anti-  dumping duty investigation initiated by the DGTR, recently.
• The manufacturers of MEG have argued that top MEG exporters like Kuwait, Saudi Arabia, Singapore and the  United Arab Emirates (UAE) have been dumping the  product because of which the domestic industry is
• Textile companies have approached DGTR against the imposition of anti-dumping duties on MEG as the step  would lead to the same situation that developed after  imposing anti-dumping duty on PTA.

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