Trade
Defence
Anti-Dumping, Subsidies and Countervailing Measures and
Safeguards
The World Trade Organisation (WTO) agreement contains 3
principal trade defence instruments. These are the anti-dumping,
anti-subsidy and safeguard instruments.
Anti-dumping
is designed to allow countries to take action against dumped
imports that cause or threaten to cause material injury
to the domestic industry. Goods are said to be dumped when
they are sold for export at less than their normal value.
The normal value is usually defined as the price for the
like goods in the exporter’s home market.
Anti-subsidy
measures allow importing countries to take action against
certain kinds of subsidised imports. Broadly speaking, "subsidies"
are defined as financial assistance from a government to
a company or group of companies. Some types of subsidy (eg
export subsidies) are prohibited under the WTO Agreement;
others are "actionable", which means that an importing country
has to demonstrate that the subsidised imports have caused
damage to the domestic industry of the importing country.
Safeguards.
The rationale behind both anti-dumping and anti-subsidy
is that countries are entitled to take action in cases of
unfair foreign competition. Safeguards carry no such accusation
that the competition is unfair. Safeguards are designed
to protect countries from unforeseen surges in imports that
cause or threaten to cause serious injury to the domestic
industry.
The
WTO also provides a dispute settlement procedure for the
resolution of disputes over the use of the instruments.
The UK is party to all the WTO trade defence instruments,
namely the Anti-Dumping Agreement, the Agreement on Subsidies
and Countervailing Measures and the Agreement on Safeguards.
The
purpose of all these agreements is to ensure consistency
in the use of trade defence instruments by all WTO members.
The UK attends the separate WTO committee on Anti-dumping
measures, Subsidies and Countervailing measures and Safeguards,
although the European Commission speak for the EU in these
groups.
As
a result of the WTO agreement at Doha in November 2001,
there will be negotiations aimed at clarifying and improving
disciplines under the Anti-Dumping and Anti-Subsidy Agreements.
There will also be negotiations to address issues and concerns
that have been raised by developing countries over the implementation
of the existing instruments.
The
Anti-Dumping Agreement
The
Agreement on Implementation of Article VI of the General
Agreement on Tariffs and Trade 1994, the Anti-Dumping
Agreement, governs the application of anti-dumping measures
by Members of the WTO. Anti-dumping measures are unilateral
remedies which may be applied by a Member after an investigation
and determination by that Member in accordance with the
provisions of the AD Agreement, that the dumped imports
are causing material injury to a domestic industry producing
the like product. Measures usually take the form of additional
duties but occasionally take the form of an agreement by
the exporters of the product in question not to sell that
product below a certain price.
The
AD Agreement sets out certain substantive requirements that
must be fulfilled in order to impose an anti-dumping measure,
as well as detailed procedural requirements governing the
conduct of anti-dumping investigations and the imposition
and maintenance of anti-dumping measures. A failure to respect
either the substantive or procedural requirements can be
taken to the WTO’s Dispute Settlement Body and the offending
country may be required to bring the measure into conformity
with the Agreement and face retaliation if it fails to do
so.
Agreement
on Subsidies and Countervailing Measures
The
Agreement on Subsidies and Countervailing Measures (ASCM)
addresses two separate but closely related topics: multilateral
disciplines regulating the provision of subsidies (financial
assistance given to an enterprise by a government) and the
use of countervailing measures to offset injury caused by
subsidised imports. Multilateral disciplines are the rules
governing whether or not a subsidy may be provided by a
Member. They are enforced through the WTO dispute settlement
mechanism. Countervailing duties (CVDs)are a unilateral
instrument which may be applied by a Member after an investigation
by that Member and a determination that the criteria allowing
the application of CVDs, as set out in the ASCM, are satisfied.
The
Agreement forbids export subsidies and subsidies contingent
on the use of domestic over imported goods. Other subsidies
are permitted but subject to the right of other WTO Members
to challenge them in individual cases and, following an
investigation in accordance with the provisions of the Agreement,
to impose countervailing duties on the subsidised products
where they cause injury to domestic suppliers. The Agreement
also provides for much greater transparency through a system
of notifications and reviews of measures.
It
is important to note that the Agreement does not
apply to trade in agricultural products, where export subsides
are common in some countries. There are also special rules
for developing countries which provide some scope for the
maintenance of export subsidies under certain conditions.
Safeguards
Agreement
The
Agreement on Safeguards contains the rules for application
of safeguard measures provided for in Article XIX of the
General Agreement on Tariffs and Trade 1994.
Major
principles of the Agreement with respect to safeguard measures
are that such measures must be temporary; that they must
be imposed only when the imports are found to cause or threaten
serious injury to a competing domestic industry; that they
be applied to imports from all sources on a non-selective
basis; that they be progressively liberalised while in effect;
and that the Member imposing them may be required to compensate
the Members whose trade is affected.
Trade
Defence in the EU
The
WTO trade defence agreements are incorporated into European
law and are applied at a European level. The European Commission
are the investigating authority on behalf of member states.
Anti-dumping, anti-subsidy or safeguard investigations are
carried out by
Directorate General Trade of the European Commission
in response to complaints lodged by EU industry. Measures
are adopted by the Council of Ministers.
The
relevant EC legislation is as follows. Anti-dumping is covered
by Council
Regulation (EC) 384/96 as amended by Council Regulation
(EC) 2331/96, Council Regulation (EC) 905/98, Council Regulation
(EC) 2238/2000 and Council Regulation (EC) 1972/2002.Anti-subsidy
measures are covered by Council Regulation (EC) 2026/97
as amended by Council Regulation (EC) 1973/2002. Safeguards
are covered by Council
Regulation (EC) 3285/94 and 519/94 (state trading and
former state trading nations).
More
information on these trade policy instruments can be found
on the Commission website, Europa.
Other
information
The
DTI’s Trade Defence Unit co-ordinates UK government policy
on these trade defence instruments and are interested in
consulting all sides of business on the possible impact
of any measures.
Trade
defence measures are primarily complaint driven and the
Commission provide guidance on how
to lodge a complaint.
The
Commission also have a comprehensive list
of cases.
Download
a list
of anti-dumping and anit-subsidy cases 
(54 KB) impending changes.
The
current members of the DTI trade defence unit are:
Eugene
MacAleese – Senior Policy Adviser, Anti-Dumping
in other sectors.
Tel: 020 7215 5030
E-mail: eugene.macaleese@dti.gsi.gov.uk
Cynthia
Reid - Senior Policy Adviser, Anti-Dumping &
Anti Subsidy in the Steel and Chemicals sector
Tel: 020 7215 5139
E-Mail: cynthia.reid@dti.gsi.gov.uk
Nick
Hook – Administrative Support.
Tel: 020 7215 5331
E-mail: nick.hook@dti.gsi.gov.uk
Trade
defence unit fax: 020 7215 2234
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