Last update - November 2012

TRADE REMEDIES: ANTI-DUMPING, SUBSIDIES AND MORE

Anti-dumping measures
If a company exports a product at a price lower than the price it normally charges on its own
home market, it is said to be “dumping” the product. Is this unfair competition? The WTO
"Anti-dumping Agreement" does not pass judgement. Its focus is on how governments can
or cannot react to dumping — it disciplines anti-dumping actions.

Under Doha negotiations

An informal group of 15 participants (Brazil; Chile; Colombia; Costa Rica; Hong Kong, China;
Israel; Japan; Republic of Korea; Mexico; Norway; Singapore; Switzerland; Chinese Taipei;
Thailand and Turkey), calling themselves “Friends of Anti-Dumping Negotiations”, believe
that the existing Anti-Dumping Agreement should be improved to counter what they consider
to be an abuse of the way anti-dumping measures can be applied. They have tabled many
proposals for tightening disciplines on the conduct of anti-dumping investigations.

The United States has emphasized the importance of ensuring that anti-dumping actions
and countervailing measures remain effective in addressing unfair trade. It has proposed a
number of amendments to the anti-dumping and countervailing rules.

Subsidies and countervailing measures

The WTO Agreement on Subsidies and Countervailing Measures disciplines the use of
subsidies, and it regulates the actions that countries can take to counter the effects of
subsidies. Under the agreement, a country can use the WTO’s dispute settlement procedure
to seek the withdrawal of the subsidy or the removal of its adverse effects. Or the country
can launch its own investigation and ultimately charge extra duty (“countervailing duty”) on
subsidized imports that are found to be hurting domestic producers.

Under Doha negotiations

While not yet attaining the same level of activity as anti-dumping, work on the Subsidies and
Countervailing Measures Agreement has steadily progressed.

Safeguard measures
A WTO member may take a “safeguard” action (i.e. restrict imports of a product temporarily)
to protect a specific domestic industry from an increase in imports of any product which is
causing, or which is threatening to cause, serious injury to the industry.

Safeguard measures were always available under the General Agreement on Tariffs and
Trade (Article XIX). However, they were infrequently used, and some governments preferred
to protect their industries through “grey area” measures (“voluntary” export restraint
arrangements on products such as cars, steel and semiconductors).

The WTO Safeguards Agreement broke new ground in prohibiting “grey area” measures and
setting time limits (“sunset clause”) on all safeguard actions.

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Fisheries subsidies - under Doha negotiations
An informal grouping of members calling themselves the “Friends of Fish” (Argentina,
Australia, Chile, Colombia, Ecuador, Iceland, New Zealand, Norway, Pakistan, Peru and the
United States) say that subsidies to the fisheries sector — estimated at $14-$20.5 billion
annually, or 20-25% of revenues — have led to over-capacity and over-fishing.

Japan, the Republic of Korea and Chinese Taipei, on the other hand, have expressed
scepticism over the link between subsidies and over-fishing.

The focus of the discussions has evolved significantly since the beginning of the Doha
Round. It is no longer on whether there would be any new disciplines but rather on the
approach to, and structure of, such disciplines.

The group has also discussed special and differential treatment for developing countries. A
number of small coastal states (Antigua and Barbuda, Barbados, Dominican Republic, Fiji,
Grenada, Guyana, Jamaica, Papua New Guinea, St. Kitts and Nevis, St. Lucia, Solomon
Islands, and Trinidad and Tobago) have jointly proposed that they be granted broad
exemptions from any new disciplines, pointing to the importance of fisheries in their
economies, and the artisanal and small-scale nature of their fisheries sector.