Monday, February 02, 2009

What procedure can you follow to protect your business from unfair competition?

What procedure can you follow to protect your business from unfair competition?

Our text is not very encouraging regarding this topic. Under the terms of most favoured nation (MFN) status there can be no discrimination among WTO nations between imported and domestic goods which might prove a good argument for the importer in question. The local small business can first investigate the percentage basis tariffs levied on the competitor product to determine if it has been properly assigned and whether or not invoices represent transaction value as opposed to some lower independent value. Further investigation of product origin might determine whether import tariffs are appropriate. However this research may be expensive and beyond the means of the local business.

The best recourse would be to make enquiries to SIMA the Canadian Border Services Agency's "Special Import Measures Act" to perform an investigation to determine whether the competitor's products are being dumped and at what margin or processes. Then initiating an investigation with CITT or "The Canadian International Trade Tribunal" would decide whether or not the goods were being dumped and what material injury or retardation of locally produced goods and trade could be revealed. If dumping is judged to have occured a levying of a preliminary duty on the competitor's product remains until investigation is completed.

CITT would then evaluate the small business's concerns, such as: order losses, market and profit share losses, excess inventory, employment losses, deteriorating or supressed prices, erosion of margins, delayed or cancelled plant construction, distribution cost increases, research and development losses, reduced real estate valuations and bankruptcies. Then CITT would conclude the extent of material injury resulting from a proven case of dumping.

It is possible that the competitor's product is not being dumped illegally. It could also be found that point of origin subsidies would reveal unfair trade practices at a governmental or regulatory level. SIMA might choose to levy higher duties upon the imported product and initiate countervailing duties.

However gathering specific evidence in foreign origin markets could be difficult. However it would not be likely that any small business could influence the government to challenge serious GATT or WTO violations unless a powerful lobby group could be formed to protest for government actions.

"Anti-dumping and Countervailing"

"Canadian International Trade Tribunal"

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