GCC countries tackle 'dumping'

GCC countries have begun to look at industrial dumping activities by other countries in the UAE.

GCC countries are strengthening laws and actively investigating offenders to protect new and growing industries from a flood of cheap imports, according to a senior regional trade official. Oil producing countries want to diversify their economies by establishing their own industrial platforms; however, as their economies expand, they have also attracted a flood of cheap imports that compete with local manufacturers, some of which are allegedly sold in the region at below market prices - more commonly known as dumping.

Karim Toumi, the international trade law expert at the Technical Secretariat for Anti-Dumping in the GCC, said the body was currently investigating seven dumping allegations. "That's a lot because it takes a more than a year to investigate a case, and they're all very complicated," Mr Toumi said. He said foreign companies, especially many Indian manufacturers, produced more than they could sell at market prices at home and internationally. As a result, they dumped the produce at below-cost in countries such as the UAE. Infant domestic industries, such as ceramic and cement production, were especially vulnerable, he said.

Another complaint is that some imported goods, particularly those of Chinese origin, enjoy subsidies from their government. "We are forced to reduce our prices, and there were times when I had to sell below cost just to survive against the Chinese companies," said Ousama Hallak, sales and marketing manager at Al Khaleej Ceramics. "We have suffered for two years." Between 2003 and 2005, Mr Hallak said his company's sales in the GCC were reduced by as much as 70 per cent, which he blamed on the dumping practices of companies fighting to gain a share of the UAE market.

In the UAE, he said, the local tile manufacturers produced enough to meet the market's demand for 50 million square metres of tiles. But more than half of this was imported. He added that he believed 90 per cent of the 80 million square metres of imported tiles to Saudi Arabia were dumped products. The UAE and the other five GCC countries are members of the World Trade Organisation (WTO), and pursue anti-dumping measures with the WTO as a single body. The WTO allows member states to impose tariffs on another member country's exports if it can prove its companies have engaged in dumping.

The UAE itself has been subject to 31 anti-dumping measures, 16 of which have resulted in imposed tariffs on its manufactured exports. The other cases were being investigated, said Rihan M Fayaz, the GCC's director general of technical secretariat for anti-dumping. WTO states can begin imposing provisional anti-dumping duties 60 days after filing a complaint with the WTO and maintain the tariff for up to nine months during the investigation. The GCC has not yet imposed duties in any of its seven cases.

Anti-dumping laws did not apply to companies inside the free trade zones. Mr Fayaz said the WTO was debating how to treat such companies. [e-mail]