Evolution and Limitations of the Lesser Duty Rule Under the WTO Anti-dumping Agreement

Abstract

Under the Lesser Duty Rule (LDR) of the World Trade Organization (WTO) Anti- Dumping Agreement (ADA), anti-dumping duties are imposed as the lower of the two: dumping margin and injury margin. It has been established to impose anti-dumping duties only to the amount necessary to eliminate injury on domestic industries caused by dumping. Most WTO members have long advocated the mandatory application of the LDR The LDR was first proposed during the Kennedy Round and was adopted in the Tokyo Round Anti-Dumping Code without major changes. The rule has not changed since then and still remains a discretionary rule. Although the LDR is theoretically an ideal rule, it may cause many flaws when applied to actual anti-dumping cases. Furthermore, the European Union (EU), Australia, and Korea, the countries that have used the LDR most actively, have shown a more flexible application of the LDR in recent anti-dumping investigations. Given these changes and the limitations of the rule, the LDR under the WTO ADA must be improved in line with the new trade order. WTO, Anti-Dumping Agreement, lesser duty rule, anti-dumping duty, dumping margin, injury margin