Glossary of commonly used trade terms

A

Arm's length
A transaction is at arm's length if the price is not affected by any relationship between the buyer and seller. Or if there is no compensation or reimbursement, other than price.

C

Causal link
An injury suffered by the New Zealand industry must be linked to the effects of dumping of the imported goods.

Countervailing duty
A duty imposed to remedy injury caused by subsidies.

Constructed value
A constructed value can be used where a price in the ordinary course of trade cannot be used as a normal value in the country of export. A constructed value includes the cost of production and reasonable costs for administration and selling, delivery, other costs incurred in the sale, and an amount for profit.

Country of export/country of origin
The country that goods are exported from is the country of export. The country of origin may be different if there is no process of manufacture or packing carried out in the country of export.

D

Dumping
A situation where the export price of goods imported into New Zealand is less than the normal value of the goods in the country of export.

Dumping margin
The difference between the normal value in the country of export and the export price.

E

Earnings before interest and taxation (EBIT)
Earnings refers to the operating surplus arising from normal operations, and excludes extraordinary items, distributions to owners, and contributions from owners.

Export price
The price an importer in New Zealand pays for goods, and adjusted by export costs.

G

Gross profit
A surplus found by deducting manufacturing costs from sales over a given period. Manufacturing costs include manufacturing overheads but exclude selling, administration and financial expenses.

L

Like goods
Goods that are like other goods in all respects. Or in the absence of such goods, goods that have characteristics closely resembling other goods.

N

Net profit
For the purposes of this glossary, net profit has the same meaning as EBIT.

Normal value
The usual selling price of allegedly dumped goods in their country of export or their constructed value, or the price to a third country.

P

Price depression
A situation where prices in New Zealand are reduced because of allegedly dumped goods.

Price suppression
A situation where price increases that would otherwise have taken place do not occur because of the dumped goods. This could mean that, for example, cost increases are not fully recovered.

Price undercutting
A situation where prices of allegedly dumped product are sold on the New Zealand market at lower prices than like goods produced by the New Zealand industry.

R

Related party
A person is deemed to be related to another if:

• one directly or indirectly controls the other
• both are directly or indirectly controlled by a third person
• together they directly or indirectly control a third person.

A person controls another person if they are in a position, whether legally or operationally, to exercise restraint or direction over the other.

S

Specific subsidy
A subsidy limited to an enterprise, industry or group of enterprises or industries. A subsidy can be limited to certain enterprises or industries by being available only in particular regions of a country. All export related subsidies, and subsidies related to the use of domestic over imported goods, are specific. Subsidies can also be specific if they are provided, in practice, only to certain enterprises or industries, even though the law may not explicitly limit their application in such a manner.

Subsidies agreement
The World Trade Organization Agreement on Subsidies and Countervailing Measures.