Antidumping and Countervailing Duties, Subsidies, and Safeguards

• Author: Jon R. Johnson
• Pages: 146-169

CHAPTER

6

ANTIDUMPING

AND

The

international trade agreements

to

which Canada

is a

party permit

member

countries

to

levy

special duties

to

offset

the

effect

of

dumping

or

subsidizing goods.

The

concept

in

international trade

law of

what consti-

tutes

dumping

has

always been

fairly

clear. Goods

are

"dumped" when they

are

sold

at a

price

in the

importing country that

is

lower than

the

price

at

which they

are

sold

in the

country

in

which they

are

produced,

or at a

price

that

is

insufficient

to

recover

costs.

Dumping

that

causes

material injury

to

domestic producers

of

like goods

can be

offset

with

an

antidumping duty.

Until

the

Subsidies

Agreement

became

effective,

there

was

little con-

sensus

as to

what subsidies were

unfair

trade practices and,

as

such,

actionable.

The

Subsidies

Agreement

establishes guidelines

for

ascertain-

ing

which subsidies

are

actionable

and

which

are

not.

If a

subsidy

is

actionable

and if

imports

of the

subsidized goods cause material

injury

to

domestic producers

of

like goods,

the

subsidization

can be

offset

by

a

countervailing duty.

Dumping

actions

are

governed

by the

Antidumping

Agreement

and

subsidy actions

by the

Subsidies

Agreement.

NAFTA

does

not

alter

the

substantive

antidumping

or

countervailing

duty

laws

of the

NAFTA

countries

or

their respective obligations under these

WTO

agreements.

However,

NAFTA

provides

for

binational review

of

certain important

determinations made

in the

course

of

antidumping

and

countervailing

duty cases.

CCFTA

provides

for the

elimination

of

antidumping investi-

gations once certain events occur,

but

otherwise does

not

alter

the

rules

established

by the

Antidumping

Agreement

and the

Subsidies

Agreement.

146

COUNTERVAILING

DUTIES,

SUBSIDIES,

AND

SAFEGUARDS

Antidumping

and

Countervailing Duties,

Subsidies,

and

Safeguards

147

Subsidies create

a

variety

of

problems under international trade law.

Massive

domestic

and

export subsidies

of

agricultural goods

of the

Euro-

pean Union,

the

United States,

and

Canada have resulted

in

oversupply

and

depressed

prices.

The

Uruguay Round

of

negotiations

came close

to

failure

over

the

question

of

agricultural subsidies.

GATT

1994 prohibits

export

subsidies other than

for

primary products

and the

Subsidies

Agree-

ment

elaborates upon

the

theme

of

prohibited

subsidies.

The

Agriculture

Agreement

establishes commitments

from

member countries respecting

both

domestic

and

export

subsidies

of

agricultural

goods.

NAFTA

and

CCFTA

also contain disciplines respecting agricultural subsidies.

Safeguard

or

emergency actions

differ

from

antidumping

and

coun-

tervailing

duty actions

in

that they

are not

based

on the

existence

of an

unfair

practice

of

another member country but, rather,

the

existence

of

volumes

of

imports

from

another member country

in

such increased

quantities that serious injury

to

domestic producers

is

caused

or

threat-

ened.

The

importing country

may

impose duties

or

quantitative restric-

tions

but the

action must

be

preceded

by

consultations,

and the

country

against

which

the

action

is

taken must receive compensation

in the

form

of

substantially equivalent concessions. Several

of the

trade agreements

to

which Canada

is a

party contain special safeguard provisions that

apply

to

agricultural goods

and to

textile

and

apparel goods.

A.

ANTIDUMPING

AND

COUNTERVAILING

DUTIES,

SUBSIDIES

DISCIPLINES

Antidumping

or

countervailing duty

actions

begin

with

an

investigation

that

is

initiated upon

the

filing

of a

complaint

or

petition

or

application

by

a

person

or

persons representing

the

domestic industry. Occasion-

ally,

investigations

are

self-initiated.

The

investigation results

in a

deter-

mination

of

whether

or not

imports have been dumped

or

subsidized

and,

if a

dumping

or

subsidization

determination

is

made, administra-

tive

authorities initiate

a

second investigation

to

determine whether

the

domestic

industry

has

suffered

material injury

as a

result

of the

dump-

ing or

subsidization.

If the

investigation determines that material injury

has

occurred, antidumping

or

countervailing duties

are

levied.

Article

VI of

GATT 1994

sets

out

general

requirements

that apply

to

both antidumping

and

countervailing duty actions.

The

Antidumping

Agreement

establishes procedural requirements

for

antidumping actions.

The

Subsidies

Agreement sets

out

procedural requirements respecting

countervailing

duty actions,

as

well

as

disciplines that apply

to the

granting

of

subsidies.