WTO Rules Against Morocco’s Anti-Dumping Duties on Tunisian School Notebooks

This dispute brought before the WTO concerns the anti-dumping duties set by Morocco, ranging from 15.69% to 27.71% on Tunisian school notebooks from January 2019. Tunisia filed its complaint with the WTO the following month. A panel of three WTO persons examined for Tunisia a series of points raised concerning Morocco’s examination of a possible undercutting of prices and its calculation of what should be a "normal" price.

The WTO has indeed ruled in favor of Tunisia, which contested the anti-dumping duties applied for four years by Morocco. The Panel, the WTO body responsible for this type of request, issued its decision in a press release made public on July 27, positioning each of the two parties.

The sticking points
According to the press release, Tunisia first contested several aspects of the calculation of the dumping margin by the Moroccan investigating authority. The first aspect concerned the composition of the normal value established by the Moroccan Ministry of Industry and in particular the question of whether the inclusion of certain distribution costs in the normal value was compatible with the Anti-Dumping Agreement.

The second aspect concerned the "reasonable amount for profits" and in particular whether Morocco could exclude certain domestic sales of notebooks from this amount on the grounds that these models were not exported.

Morocco’s unconvincing arguments
The Panel considers that "Tunisia has demonstrated that the amount of profits retained by the investigating authority for the construction of the normal value of the notebooks was not based on ’actual data on the production and sales, in the ordinary course of trade, of the like product by the exporter or producer under investigation’ and is therefore not in accordance with Article 2.2.2 of the Anti-Dumping Agreement.

Consequently, the figure retained by the MIICEN to establish the profit margin of the two Tunisian exporters was not a "reasonable amount" for profits within the meaning of Article 2.2 of the Anti-Dumping Agreement. "We conclude, however, that Tunisia has not demonstrated a violation of Article 2.1 of the Anti-Dumping Agreement."

In the Panel’s view, "Morocco has not demonstrated... that the fact of including sales of numbered and watermarked notebooks in the determination of the reasonable amount of profits would not result in a normal value allowing a ’fair comparison’ with the export price."

On the other hand, adds the same source, the fact of not taking into account the domestic sales of these notebooks has led to the reasonable amount of profits not being "based" on "actual data on the production and sales, in the ordinary course of trade, of the like product by the exporter or producer under investigation", within the meaning of Article 2.2.2 of the Anti-Dumping Agreement.

In conclusion, the Panel considers that Tunisia has demonstrated that MIICEN did not examine the accuracy and adequacy of the evidence of the export price, the normal value and the adjustment relating to the cost of transport in a manner consistent with the provisions of Article 5.3 of the Anti-Dumping Agreement. In accordance with Article 19:1 of the Understanding on Rules and Procedures Governing the Settlement of Disputes, the WTO recommends that Morocco comply with its obligations under the Anti-Dumping Agreement.

Furthermore, Morocco has appealed the decision by challenging several elements on which the WTO Panel based itself as well as its capacity to hear this type of request. Rabat has seized the WTO Dispute Settlement Body, currently on standby and therefore unable to rule.