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Trade defense instruments—such as anti-dumping, countervailing, and safeguard measures—are essential tools used by States to counteract unfair trade practices, distortive subsidies, or extraordinary circumstances that cause or threaten to cause injury to domestic industries. These measures serve a dual purpose: protecting the local economy and producers, while also contributing to the restoration of fair competition in international trade.
The implementation of such measures requires a formal investigation to determine the existence of unfair practices or market distortions. In Colombia, these investigations are conducted by the Ministry of Trade and involve a comprehensive analysis of economic, legal, and technical factors. Once the existence of the practice, the injury, and the causal link are established, the authority may impose trade defense measures, which may include anti-dumping duties, countervailing duties, or safeguard actions.
The Carvajal Case: A Recent Example
A notable recent case in Colombia involved Carvajal Pulpa y Papel S.A.S. ZFPE (“Carvajal”), a subsidiary of the Carvajal Group—one of Latin America’s most prominent business conglomerates with over 120 years of history. Carvajal produces paper from sugarcane bagasse at its own mills, supplying products widely used in printing, design, photocopying, and other graphic applications. The company plays a strategic role in the national production chain, generating hundreds of direct and indirect jobs and contributing significantly to the Colombian manufacturing sector.
Initiation of the Investigation
The investigation was triggered by preliminary findings indicating that imports of photocopy paper from Brazil, between May 10, 2023, and May 9, 2024, were being conducted under dumping conditions. These imports were found to have adversely affected domestic producers, particularly Carvajal, which experienced a sustained decline in market share.
In response, the Ministry of Trade initiated a formal investigation to verify the presence of dumped imports and assess their impact on the domestic industry.
Legal Requirements for Imposing Measures
Under the WTO Anti-Dumping Agreement and Colombian regulations, the imposition of anti-dumping measures requires the fulfillment of several conditions:
- The petition must be filed or supported by at least 50% of domestic producers.
- The imported product must be identical or similar to the locally produced product.
- The imports must be made at dumped prices—i.e., the export price is lower than the normal value (the price in the exporter’s domestic market under normal trade conditions).
- There must be evidence of material injury to the domestic industry.
- A causal link must be established between the dumped imports and the injury.
Findings and Outcome
The investigation confirmed that Carvajal represented more than 50% of the domestic photocopy paper industry. It also established that the imported product was sufficiently similar to the locally produced paper, regardless of differences in raw materials. The Ministry found that Brazilian exporters had sold photocopy paper at dumped prices, resulting in price suppression and injury to the domestic industry.
Evidence showed a decline in Carvajal’s sales, profits, and market share, and a direct causal link between these negative effects and the dumping practices.
As a result, the Ministry imposed an ad valorem anti-dumping duty on imports of photocopy paper classified under tariff subheading 4802.56.90.00 for a period of five years. The duties were applied differentially as follows:
- 22.62% for SUZANO S.A.
- 21.78% for SYLVAMO DO BRASIL LTDA. and SYLVAMO EXPORT LTDA.
- 30.30% for all other Brazilian exporters
To ensure effective enforcement and prevent circumvention through trade triangulation, non-preferential rules of origin were also established. These rules require that the product be manufactured exclusively with materials originating in the declared country or meet specific tariff shift criteria.
Impact and Significance
The Ministry’s decision marked a significant victory not only for Carvajal but for the broader Colombian paper industry, which can now compete under fairer market conditions against imports from Brazil.
Brigard Urrutia played a pivotal role in this process. Our team advised Carvajal throughout all stages of the investigation, providing rigorous technical analyses and compelling legal arguments that were instrumental in demonstrating the existence of dumping, the extent of injury, and the required causal link under both domestic and international law.
This case underscores the importance of combining specialized legal expertise with robust economic analysis in trade defense proceedings. Through our involvement in this and other cases, Brigard Urrutia has solidified its position as a leading firm in trade defense and international trade law.
Article by:
By José Francisco Mafla ([email protected]), Partner; Gerardo Chadid ([email protected]), Senior Associate; and Sarah Ramírez ([email protected]), Associate — Customs and International Trade Practice, Brigard Urrutia