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Published online by Cambridge University Press: 04 July 2014
Jean Monnet Lecturer, Law Faculty and Department of International Relations, Hebrew University, Jerusalem. I would like to express my gratitude to Barak Medina, Dvora Milstein, Nellie Munin, Arie Reich, and to the anonymous referee for their very helpful comments and to my excellent research assistant Yehuda Herbst. Thank you to the Israel Law Review student editors for their fine work on this Article. I am also grateful for the generous support of the EU under the aegis of the Jean Monnet Action. The usual caveat applies. Comments are welcome to gharpaz@mscc.huji.ac.il.
1 See Harpaz, Guy, “Dumping” the Anti-Dumping Instruments in the Trade Relations between the European Union and the State of Israel?—The European Union's Perspective, 39(3) J. World Trade 445, 465–471 (2005)Google Scholar; see also infra note 13.
2 See Trade Levies Act (Amendment no. 3) 2005 SH no. 2012, 662; Draft Bill-Trade Levies Act (Amendment no. 3) (Dumping Levy and Countervailing Levy) (no. 140) 2004 HH, 246. See also the Draft Bill-Trade Levies Act (Amendment (Antidumping Measures and Countervailing Measures), 2004 (distributed on 20 June, 2004). The amendment addresses also the area of countervailing measures. This Article will, however, focus solely on the issue of Anti-Dumping. For comment, see the recent report of the WTO, Trade Policy Review—Israel: Trade Policies and Practices by Measures para. 35-38 (2006), available at http://www.wto.org/english/tratop_e/tpr_e/s157-3_e.doc (last visited September 20, 2006). See also Munin, Nellie, Trade Measures: Protective Measures or Trade Barrier in Breach of International Agreements? (2006) [in Hebrew], available at http://www.israelbar.org.il/article_inner.asp?pgId=31775&catId=287 (last visited September 20, 2006) [in Hebrew]Google Scholar.
3 See page 1 of the Explanatory Notes, id.
4 For a fascinating account, see Viner, Jacob, Dumping: A Problem in International Law (1923)Google Scholar.
5 See Viner, id.
6 Müller, W., Khan, N. and Neumann, H. A., EC Anti-Dumping Law—A Commentary on Regulation. 384/96 3(1998)Google Scholar.
7 Vermulst, Edwin A. & Waer, Paul, The EC Anti-Dumping Law and Practice 2 (1996)Google Scholar. The other countries that applied Anti-Dumping laws at that time were Mexico, Korea and New Zealand.
8 Hine, Robert C. & Padoan, P.C., External Trade Policy, in Competitiveness and Cohesion in EU Policies 64 (Hall, R., Smith, A., & Tsoukahs, Loukas eds., 2001)Google Scholar.
9 See Balassa, Bela, The ‘New Protectionism’ and the International Economy, 12 J. World Trade 409, 414 (1978)Google Scholar.
10 See., e g., Broude, Tomer, An Antidumping ‘To Be or Not to Be A New Agenda for Research and Reform, 37(2) J. World Trade 305 (2003)Google Scholar.
11 See Miranda, J., Torres, R.A., & Ruiz, M., The International Use of Antidumping - 1987-1997 32 (5) J. World Trade 5, at 7-9, 35 (1998)Google Scholar. For the division of Antidumping measures imposed according to the degree of development of the country imposing or affected by them, see id. at 39.
12 See Horlick, Gary N., How the GATT Became Protectionist An Analysis of the Uruguay Round Draft Final Antidumping Code 27(5) J. World Trade 5, at 6 (1993)Google Scholar, Miranda et al., id. at 6, 7, 31, 32, & 35 For recent statistics, see WTO Annual Review, 2005 (2006) 38-40, available at http://www.wto.org/english/res_e/booksp_e/anrep_e/anrep05_e.pdf. (last visited April 23, 2006).
13 See, e.g., Broude, supra note 10; Bierwagen, Rainer M., GATT Article VI and the Protectionist Bias in Anti-Dumping Laws (1990)Google Scholar; Down in the Dumps: Administration of the Unfair Trade Laws (Boltuck, Richard & Litan, Robert E. eds., 1991)Google Scholar; Dale, Richard, Anti-dumping Law in a Liberal Trade Order (1980)CrossRefGoogle Scholar; Barceló, J. J., The Anti-Dumping Law: Repeal it or Revise It, 1 Michigan Y.B. Int'l Legal Stud. 70 (1979)Google Scholar; McGee, R.W., The Moral Case for Free Trade, 29(1) J. World Trade 69 (1995)Google Scholar; Messerlin, Patrick A., Anti-Dumping Regulations or Pro-Cartel Law?: The EC Chemical Cases, 13 (4) World Economy 465 (1990)CrossRefGoogle Scholar; Nicolaides, Phedon, How Fair is Fair Trade?, 21(4) J. World Trade 147 (1987)Google Scholar; Nicolaides, Phedon, The Competition Effects of Dumping, 24(5) J. World Trade 115 (1990)Google Scholar.
14 Anti-Dumping Act 1977 SH 839, 53. Note that prior to enactment of the Act, the use of Anti-Dumping measures was possible through the use of the Emergency Regulations (Mandatory Payments) 1958.
15 Indeed, the background of the 1977 legislation reflects such a desire. See the Explanatory Notes to the 1977 legislation that stressed the compatibility of the Israeli legislation with that of the multilateral Anti-Dumping regime. 1975 HH 1195, 397.
16 For analysis, see Rom, Micha, In the Path of Israel's International Commercial Policy (1998) [in Hebrew]Google Scholar; Issues in Israel's Foreign Commercial Policy (Halevey, Nadav & Michaeli, Michael eds., 1972) [in Hebrew]Google Scholar; Hirschel, Ron, The “Constitutional Revolution” and the Emergence of a New Economic Order in Israel, 2 Isr. Stud. 136, 138–140 (1997)Google Scholar; Sharkansky, Ira, The Political Economy of Israel 3 (1987)Google Scholar; Plessner, Yakir, The Political Economy of Israel: From Ideology to Stagnation (1994)Google Scholar; Reich, Arie, Globalization and Law: The Future Impact of International Law on Israel's Commercial Law, 17(1) Bar-Ilan Legal Stud. 17, at 30–31 (2001) [in Hebrew]Google Scholar.
17 Einhorn, Talia, Reconciling Israel Antidumping Law with GATT/WTO Rules, 32(1) Isr. L. Rev. 81, 85–87 (1998)Google Scholar.
18 For a recent survey of Israel's trade policies, see WTO, Trade Policy Review: Israel (2006), available at http://www.wto.org/english/tratop_e/tpr_e/tp258_e.htm (last visited Sept. 20, 2006). For Israel and the bilateral and multilateral fronts, see Harpaz, Marcia, Israel's Policy Towards the Doha Round: An Insider Perspective, in The World Trade Organization and the State of Israel: Law, Economics and Politics 97 (Reich, Arie ed., 2006) [in Hebrew]Google Scholar.
19 WTO, Trade Policy Reviews: First Press Release, Secretary and Government Summaries, Israel: September 1999, PRESS/TPRB/112, 6 September 1999.
20 For critique, see Falk, Richard, Predatory Globalization: A Critique (1999)Google Scholar.
21 Trade Levies Act 1991 SH 1337, 38. The 1991 legislation was adopted to mitigate the Exposure Policy, unilaterally adopted by Israel, see Munin, supra note 2.
22 Draft Bill Anti-Dumping Act (no. 1859) 1988 HH, 56. For example, in the legislative proposal, published in 1987, it was stated that the intention of the legislation “is to broaden the list of targets of trade defense measures,” and to overcome some of the enforcement problems of the 1977 legislation.
23 See Einhorn, supra note 17.
24 For statistics, see Miranda et al., supra note 11.
25 See Zosman, Noam, Economic Aspects of Antidumping Law, 103 Isr. Tax Q. 69, at 70 (1999) [in Hebrew]Google Scholar.
26 For analysis, see Horlick, Gary N. & Shea, Eleanor C., The World Trade Organization Antidumping Agreement, 29 (1) J. World Trade 5 (1995)Google Scholar.
27 For analysis, see 2 Barak, Aharon, Interpretation in Law—Statutory Interpretation 575–578 (1993)Google Scholar.
28 See Reich, Arie, Institutional andSubstantive Reform ofthe Anti-Dumping and Subsidy Agreements—Lessons from the Israeli Experience, 37 (6) J. World Trade 1037, 1049, 1053 (2003)Google Scholar.
29 Id. at 1049.
30 Id.
31 CA 2313/98 Minister of Industry & Trade v. Mnikol Ltd [2000] IsrSC 54(1) 673, 679-680, dealing with safeguard measures.
32 See Series G/ADP/Q1/ISR and G/ADP/W-295-299.
33 Supra note 19.
34 See, e.g., Einhorn, supra note 17.
35 Euro-Mediterranean Agreement establishing an association between the European Communities and their Member States, on the one part, and the State of Israel, of the other part, Official Journal L 147, June 21, 2000, 0003-0171 [hereinafter the Association Agreement]. For analysis, see especially Munin, Nellie, The EU and Israel: State of the Play 145–226 (2003) [in Hebrew]Google Scholar; Reich, Arie, From Diplomacy to Law: The Juridicization of International Relations in the Framework of GATT and Israel's Free Trade Agreements, 22 T.A. L. Rev. 351, 398–403 (1999) [in Hebrew]Google Scholar; Inbar, Eyal, Improving Israel-EU Relations: the European Economic Area as a Possible Model, 5 (1) Isr. Aff. 109 (1999)CrossRefGoogle Scholar; Sadeh, Tal, The European Union and Israel: The Customs Union Alternative, 5 (1) Isr. Aff. 87 (1999)CrossRefGoogle Scholar; Tovias, Alfred, Mapping Israel's Policy Options Regarding its Future Institutionalized Relations with the EU (2003)Google Scholar; Hirsch, Moshe, The 1995 Trade Agreement between the European Communities and Israel: Three Unsolved Issues, 1 (1) Eur. Foreign Aff. Rev. 87 (1996)Google Scholar.
36 See Article 22 of the Association Agreement, id. This Article allows for the imposition of Anti-Dumping measures in the context of reciprocal trade, subject to the provisions of the GATT, and subject to procedural mechanism provided by the Association Agreement.
37 Id. at Section 32(18).
38 Id. at Section 4.
39 Article 15 of the Uruguay Agreement on Anti-Dumping requires that developed countries give special regard to the unique situation of developing countries, and that constructive remedies be preferred This Article was not incorporated into the new legislation.
40 The Association Agreement, supra note 35, at Section 21.
41 Id. at Section 24.
42 Id. at Section 29.
43 Id. at Section 32(12)-(17).
44 Id. at Section 32(7) and 32(12).
45 Id. at Section 32(8).
46 Id. at Sections 6-8.
47 Id. at Section 32(11).
48 Id. at Section 32(18).
49 Id. at Section 32(18).
50 Reich, supra note 28, at 1044.
51 The Association Agreement, supra note 35, at Section 32(18)(c).
52 Id. at Section 21 (a). The domestic industry need not comprise all domestic producers, see Section 24(a)(1).
53 Id.
54 Id. at Section 24(a)(2) and Section 24(b).
55 Id. at Section 32(4)-(6). The Commissioner sends questionnaires to producer, complainant, exporter, importer, and others, requesting them to furnish elaborate sets of facts, See Section 32(b).
56 Id. at Section 32(c). Under Section 32(1) an interested party's refusal to supply information, or obstruction of the investigation, may lead to the adoption of findings on the basis of the facts available. The same is true with respect to the supply of false or misleading information.
57 Id. at Section 32(8)(a) and 32(24). Proceedings must be concluded, in principle, within fifteen months of initiation In rare circumstances an extension of three months may be provided But See the criticism, See Munin, supra. note 2 and see also supra. note 2.
58 Id. at Section 32(7). For analysis of similar provisions under the EC Anti-Dumping regime, See Muller et al., supra. note 6, at 310-315.
59 Id. at Section 28.
60 Id. at Sections 28-29. The provision of the guarantee is a pre-condition for the release of the products concerned for free circulation, see Section 29(e).
61 Id. at Section 32(19). For analysis of similar provisions under the EC regime, See Muller et al., supra. note 6, at 403-405.
62 Id. at Section 32(18)(a).
63 Id..
64 I. e. only to products which will be released from the hands of the customs authority as of the day in which the decision to apply measures was adopted, Section 32(24)(a). But see id. at Section 32(24)(b)-(c), which provides for the possibility of retroactive application of measures For analysis of similar provisions under the EC regime, see Muller et al, supra note 6, at 326-329.
65 Id. at Section 32(16)(b).
66 Id. at Section 32(21).
67 Id. at Section 32(25). The need for the continued imposition of measures may be reviewed during their life span For analysis of similar provisions under the EC regime, see Muller et al., supra note 6, at 344-352. The outcome of an interim review is the revocation of the measures in force, their maintenance or amendment.
68 Section 32(26). Measures can be extended beyond the five year period, if failing to do so would be likely to lead to a continuation or recurrence of injurious dumping For analysis of similar provisions under the EC regime, see id. at 332-344.
69 Under Section 32(27), individual margins of dumping are determined for those exporters who have not exported the product during the period of investigation on which the original measures were based For analysis of similar provisions under the EC regime, see id. at 352-357.
70 Section 32(32) If the dumping margin on the basis of which duties were paid, has been reduced to a level which is below that of the duty in force, the importer is entitled to reimbursement of the duties collected See The Association Agreement, supra note 36.
71 In 1988 the EC established a legislative scheme for the application of Anti-Dumping measures to practices whose main aim is the circumvention of measures. This was done despite the fact that the regime of the GATT did not authorize the application of measures in those circumstances. The EC provisions were found to be in breach of GATT's principle of national treatment, see Torremans, Paul, Anti-circumvention Duties after the Screwdriver Panel Report, 18 Eur. L. Rev. 288 (1993)Google Scholar The Uruguay Agreement on Anti-Dumping failed to regulate this area. This did not prevent the EC from introducing revised provisions. Under Article 13 of the Basic Regulation the application of measures may be extended to imports from third countries of like products, when any form of circumvention of the measures in force is taking place. The same article defines the notion of circumvention, to include the practice of assembly operations For analysis, see Holmes, S., Anti-Circumvention under the European Union's New Ann-Dumping Rules, 29(3) J. World Trade 161 (1995)Google Scholar, McNamara, T. & Vermulst, Edwin A., Special Trade Law Issues in the EC for Assembly Products, 28(4) J. World Trade 83 (1994)Google Scholar, O'Dwyer, U., Chinese Walls—Will the Amendment to the E C 's Basic Anti-dumping Regulation Make a Difference?, 4(6) Int.'l Trade L. & Reg. 195 (1998)Google Scholar.
72 The EC provided for such a regime in order to face the situation where the exporter absorbs the duty instead of passing it on.
73 See., eg., Sections 22-23, 26-28, 30-31, and 32(2).
74 For the concept of “like product,” see Bronckers, Marco & McNelis, Natalie, Rethinking the ‘Like Product“ Definition in WTO Antidumping Law, 33(3) J. World Trade 73 (1999)Google Scholar.
75 The Association Agreement, supra note 35, at Section 10.
76 Id. at Section 10. For analysis of similar provisions under the EC regime, see Vermulst & Waer, supra note 7, at 177-186.
77 The sufficiency of sales is determined under Section 11 by the “five percent rule”: Sales of the like product intended for domestic consumption shall normally be used to determine normal value if such sales volume constitutes five percent or more of the volume of the product under consideration exported to the State of Israel. However, a lower volume of sales may be used when, for example, the prices charged are considered representative for the market concerned.
78 Provided that those prices are representative, Section 10(b)(1).
79 Id. at Section 10(b)(2).
80 Id. at Section 13(a).
81 Id. at Section 13(b). The choice of the analogous country is critical, as the like product may be sold in different market economies for substantially different prices. Contrary to the EC regime, the new Israeli legislation fails to provide a detailed regime as to the choice of that country.
82 Id. at Section 14(a).
83 Id. at Section 14(b).
84 Id. at Section 15. This comparison is to be conducted at the same level of trade and in respect of sales made as nearly as possible at the same time Contrary to the EC, the Israeli legislation fails to provide a non-exhaustive list of indicators that may affect price comparability and instructions as to how they ought to conduct adjustments in order to reflect those differences.
85 Id. at Section 32(5).
86 Id. at Section 32(5), especially Section 32(5)(c). The determination of injury must be based on positive evidence and shall involve an objective examination of both (i) The volume of the dumped imports and their effect on prices in the Israeli market for like products, and (ii) The consequent impact of those imports on the Israeli industry Section 32(5)(c) assists in identifying “material injury” by calling upon it to examine the impact of the dumped imports on the Israeli industry, to include an evaluation of all relevant economic factors and indices having a bearing on the state of the industry, including in particular actual and potential decline in sales, profits, output, market share, productivity, return on investments, utilization of capacity, factors affecting prices, actual and potential negative effects on cash flow, inventories, employment, wages, growth and ability to raise capital or investments, and the magnitude of the actual margin of dumping The finding of threat of a material injury is a speculative exercise and thus is open to abuse. Hence, Section 32(5)(a)(3) provides that such a finding shall be based on facts and not merely on allegation, conjecture or remote possibility. The change in circumstances likely to lead to injurious dumping must be clearly foreseen and imminent Guidelines are provided by the same Section to assist in determining whether the dumped goods pose a real threat of material injury.
87 Id. at Section 32(7)(c)(1). Less than two percent of the Export Price.
88 Id. at Section 32(7)(c)(2). Where the imports concerned arrive from the exporting county whose imports represent less than three percent of the overall imports of the like product, unless the imports from the various exporting countries collectively account for more than seven percent of the overall imports of the like product, or where the Commissioner determines that the imports are not de minimis.
89 Id. at Section 32(6).
90 Id. These factors include the volume and prices of other imports not sold at dumping prices, contraction in demand or changes in the patterns of consumption, restrictive trade practices of, and competition between, third country and Israeli producers, developments in technology and the export performance and productivity of the Israeli industry.
91 Section 32(5)(d). Yet the same Article provides that cumulative assessment can only be conducted if (i) The margin of dumping established in relation to the imports from each country is more than de minimis and that the volume of imports from each country is not negligible; and (ii) Cumulative assessment is appropriate in light of the conditions of competition among imported products and among the imported products and the like Israeli product. For analysis of similar provisions under the EC regime, see Müller et al., supra note 6, at 230-236.
92 Section 32(18).
93 Id.
94 Id. at Section 32(12).
95 Boodman, Martin, The Myth of Harmonization of Laws 39 Am. J. Comp L. 699, 718 (1999)Google Scholar. Jurisdictions which do not want to devote resources to lengthy law reform projects can “free-ride” upon the law reform project of other jurisdictions.
96 Id.
97 See Avi Nov., Wider Europe The EU State Aid Regime and its Opportunity for the Southern Mediterranean Countries, a paper presented in the Sixth Mediterranean Social and Political Research Meeting, Montecatini Terme, 16-20 March, 2005, at 7-8 “it may be beneficial for a country that provides tax incentives to FDI as a result of political pressure, to relinquish its sovereignty and be bound by a global or regional regime that will require that country to abstain from providing tax incentives.”
98 See Geradin, Damien & Petit, Nicholas, Competition Policy and the Euro-Mediterranean Partnership 8 Eur. Foreign Aff. Rev. 153, 174 (2003)Google Scholar for the application of this argument in the area of competition law.
99 Supra notes 71-72. Yet once must note that the inclusion of such procedures would have enhanced the protectionist nature of the new legislation.
100 See Article 21 of the EC Basic Regulation on Anti-Dumping, which provides that measures are to be imposed against injurious dumping, unless such imposition is not in the Community interest.
101 See Article 21.1 of the EC Basic Regulation on Anti-Dumping which requires that a determination to that effect “shall be based on an appreciation of all the various interests taken as a whole, including the interests of the domestic industry and users and consumers… In such an examination, the need to eliminate the trade distorting effects of injurious dumping and to restore effective competition shall be given special consideration.” Articles 21.2-21.7 provide the above-mentioned procedural framework. The locus standi of those permitted to submit their representations was extended under the EC regime to include the complainants, importers, users, consumer groups and their respective trade associations entitled to make their views known on this issue. Special “Community interest questionnaires” are dispatched in which the complainants, industrial users and importers are asked to detail the manner in which the proposed measures will affect them. The non-confidential version of their reply is communicated to other parties, which may reply to it.
102 Supra note 39. For further criticism, see Munin, supra note 2.
103 Supra note 91.
104 Ben-Israel, Hedva, Summing Up, in Troubled Waters: Europe and its Relations with the United States and Israel 93 (Kühnel, B. ed., 2003)Google Scholar.
105 Ambassador Giancarlo Chevallard, in Kühnel, id. at 15.
106 In 73 CE the Romans put under siege the Massada Fortress, situated close to the D ad Sea, which was settled by the Hebrews. The odds were not on the Hebrews' side and the decisi n was to fight till the end, including collective suicide.
107 For such an approach see Steinberg, Gerald, Kantian Pegs into Hobbesian Holes: European's Policy in Arab-Israeli Peace Efforts, (Working Paper 2005/04 The Israeli Association for the Study of European Integration), available at http://www.biu.ac.il/SOC/iasei/ (last visited September 20, 2006)Google Scholar.
108 Einhom, supra note 17, at 85-87.
109 See Late Prime Minister Yitzhak Rabin, Opening Speech before the Knesset, 13 June 1992, 126 Divre Haknesset 8: “We are no longer an isolated nation, and it is no longer true that the entire world is against us. We must rid ourselves of the feeling of isolation that has afflicted us for almost fifty years. We must join the campaign for peace, reconciliation, and international cooperation, lets we miss the train and be left alone at the station;” Hirschel, supra note 16, at 138-139, 146; Reich, supra note 16.
110 But cf. Harpaz, Guy, The Israeli Supreme Court in Search of Universal Legitimacy, 65(1) Cambridge L. J. 7 (2006)CrossRefGoogle Scholar; Shany, Yuval, Capacities and Inadequacies: A Look at the Two Separation Barrier Cases 38(1–2) Isr. L. Rev. 230, 234–235 (2005)Google Scholar.
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113 Harpaz, Guy, The Europe Neighborhood Policy and its Impact on the Israeli-European Union-United States Triangle, 6(2) San Diego Int'l L. J. 295 (2005)Google Scholar.
114 Supra note 35.
115 Reich, supra note 16, at 21. See contra, Boodman, supra note 95.
116 For critical analysis of this phenomenon, see Stephan, Paul B., The Futility of Unification and Harmonization in International Commercial Law, 39 Va J. Int'l L. 743 (1999)Google Scholar; Leebron, David, Claims for Harmonization: A Theoretical Framework, 27 Can. Bus. L. J. 63 (1999)Google Scholar.