Exports to third country Sample Clauses

Exports to third country and the constructed value method According to paragraph 1(b) of the Article VI of GATT, if the normal value based on selling prices in the domestic market of the exporter is an unreliable value, then the export price is to be compared with “either (i) the highest comparable price for the like product for export to any third country in the ordinary course of trade, or (ii) the cost of production of the product in the country of origin plus a reasonable addition for selling cost and profit.” Paragraph 2.2 in the URAA makes the same provision in the event of an unreliable normal value (GATT Secretariat 1994: 168, 493; WTO Secretariat, 1995:220). The method described in paragraph 1(b)(i) of Article VI has not often been used. It is argued that if an exporter is dumping in one country, the chances are that it may be dumping in other countries. So the price of exports to a third country may not be a good reflection of the cost of production in the exporting country (Hindley 1988:448; Messerlin 1991:47). The method provided for in Article VI, paragraph 1(b)(ii) has been used extensively. This method has become known as the constructed value method. The logic of this method is that the full cost of production, including allowances for administrative, selling and general costs as well as for profits per unit, is calculated. In this way a correct or as near correct as possible proxy normal value, based on the cost structure of the exporting country, is determined, against which the export price will be compared. This method is open to a certain amount of manipulation and abuse and has been criticised for these reasons (Waer 1993:78-79; White 1997: 119). The determination of the normal value in a market economy country and the constructed value method will be discussed in detail in the following chapter.
Sample 1
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