Currency Conversion in the Anti-dumping Agreement

Author: 
Jong Bum Kim
Description: 
Public Access Documents
JEL codes: 
Abstract: 
A dumping margin calculation involves currency conversion of either the export price of the normal value. Although the Anti-dumping Agreement permits the conversion of currency when it is necessary for the price comparison, it does not provide a sufficient guideline to guard against potential distortion in the dumping margin calculation resulting from conversion. Unless the conversion is done with an appropriate exchange rate, an investigating authority's price comparison potentially results in a spurious estimate of dumping margin, in violation of the fair comparison requirement of Article 2.4 of the Anti-dumping Agreement. In particular, the distortion in the dumping margin calculation is magnified when the exchange rate moves significantly. This paper reviews the currency conversion clause of the Anti-dumping Agreement and suggests modifications in order to address the shortcomings.