Currently, countries around the world have trade remedy systems to protect their products from unfair competition from other countries and businesses belonging to those countries. This system includes measures such as imposition of anti-dumping duties, anti-subsidy duties, or import restrictions, in order to keep domestic products competitive in the market, free from pressure on value from other parties.
Some of the prominent countries in the application of the trade remedy system are the United States, China, the European Union (EU), and India.
The US is one of the countries with the strongest trade remedy system in the world, and often applies and uses the trade remedy system, anti-dumping measures as an effective tool to protect its products. China also applies many trade remedy measures, especially for products imported from the US.
This is part of a larger picture of a commercial tension between the US and China that has dragged on for years.
In addition, the European Union (EU) also has a fairly tight trade remedy system and India also applies many trade remedies to protect domestic products, especially in the agricultural sector.
However, the trade remedy system of these countries has also caused a lot of controversy and frustration for other countries, especially developing countries. Tariff decisions made by a country's trade remedy authority are not always agreed upon by the country being tariffed.
In such cases, those countries can sue the order to WTO and the WTO will consider the case from the perspective of a third party, unaffected by the dispute of interest between the two parties. One of the most prominent recent cases is Russia's lawsuit against Ukraine to the WTO in 2015 over an order to impose an ammonium nitrate fertilizer tariff, arguing that the order violated international trade regulations.
In 2018, a WTO panel ruled in favor of Russia. Ukraine appealed but in 2019, the WTO issued a final ruling in favor of Russia and that was the end of the case. However, the WTO decision is not binding.
Countries like Ukraine may not comply with the WTO ruling, but if so, the WTO would be able to approve trade sanctions from Russia to Ukraine for violating international trade remedy regulations.
The application of trade remedies can increase costs for consumers and reduce product choice, while also reducing competition in the international market. This is an important tool, but can have major impacts on businesses, consumers, the economy of an entire country and other countries with which it is related, so each trade remedy case are observed carefully by the countries concerned.
To ensure their rights, enterprises subject to duty investigation and imposition need to contact reputable law firms on anti-dumping, trade remedies and other competent authorities to receive timely assistance. In many cases, lawsuits may be supported by the Government to ensure the legitimate interests of businesses as duty orders from other countries may not be based solely on an economic point of view.
Trade remedy systems of some prominent countries in the world
Trade remedy systems of some prominent countries in the world include:
Malaysia
Legal system: Safeguard Act 2006; Countervailing and Anti-Dumping Duties Act 1993.
Trade Remedies Authority: Malaysian Ministry of Industry and International Trade, Trade Practices Section (MITI), Trade Practices Section.
Since 2010, Malaysia has been a frequent user of trade remedy tools but has also been the target of trade remedy investigations, especially in the steel products sector.
Recent cases include anti-dumping and safeguard cases against hot rolled coil, cold rolled coil, coil, steel belt, galvanized steel, etc. Ceramic tiles is also the subject of investigation in Safeguard cases recently.
Malaysia has so far not taken any countervailing action. The main countries that Malaysia is targeting for the period 2020-2021 are China, Vietnam, South Korea and Indonesia.
Countries investigating trade remedies on Malaysia over the past five years include Canada, India, the United States, Australia, Vietnam, the EU and Turkey.
Australia
Legal system: Customs Act 1901 (Customs Act, 1901); Customs Duty Act 1975; Customs Duty Regulation 2013
Australia is one of the largest users of trade remedies in the world, with cases involving steel and other metals accounting for about 70% of all cases today. Trade remedy measures applied to imports are monitored and disclosed quarterly by the Australian Anti-Dumping Commission, which administers trade remedies in the Australian territory.
Out of a total of 22 countries (84 cases) of anti-dumping and countervailing duty that Australia is applying, mainly with China (26 cases), Malaysia (7 cases), Thailand (7 cases), Taiwan (6 cases), Korea (5 cases), Indonesia (4 cases), Philippines (3 cases), Japan (2 cases) and Vietnam (2 cases).
Currently, Australia is applying temporary anti-dumping duty on zinc-aluminum alloy coated steel and anti-dumping duty on aluminum profiles from Vietnam.
Chile
Law on trade remedies: Law 18,525 (Law 18,525), Law on import of goods (Rules on the Importation of Goods); Decree No. 1314/2012 on Anti-Distortion Regulations
Law on Safeguard: Law No. 19,612 (Law No. 19,612); Amending Law No. 18,525 on Import Price Distortions for the Purpose of Establishing a Safeguards Procedure
Chile's trade remedy system is administered by the National Commission in Charge of Investigating the Existence of Distortions in the Price of Imported Goods.
Chile is a country that does not regularly use trade remedies, and currently there are no effective anti-dumping, countervailing and safeguarding cases. Anti-dumping duties are valid for not more than 1 year and safeguard measures are limited to 2 years.
Japan
Law on Trade Remedies: Foreign Exchange and Foreign Trade Act; the Customs Duty Act; Government Regulation on Anti-Dumping Duty (Cabinet Order Relating to Anti-Dumping Duty); Government Regulations on Countervailing Subsidies Duty; WTO Notifications.
Regulations to Govern Emergency Measures to be Taken in Response to an Increase in Importation of Goods; Government Regulation on Emergency Duties (Cabinet Order Relating to Emergency Duties)
Trade remedies legislation in Japan is managed with the Ministry of Economy, Trade and Industry and the Ministry of Finance. Japan has limited its use of trade remedies, and measures in force today include Potassium Hydroxide from China and Korea, and Potassium Carbonate from Korea.
Japan is currently investigating only one anti-dumping case for galvanized steel wire products imported from China and Korea.
New Zealand
Trade Remedies Law: Trade Act 1988 (Trade Act 1988)
Law on Safeguard: Trade Act 2014 (Trade Act 2014)
New Zealand trade remedies are administered by the Ministry of Business, Innovation and Employment and the New Zealand Customs Service.
New Zealand have taken very little trade remedy measures, averaging two to four investigations per year, and currently only five anti-dumping orders have been imposed on galvanized wire from China and Malaysia; peaches from Greece, Spain and South Africa.
Currently New Zealand is investigating anti-dumping on galvanized steel from Taiwan and South Korea, in which temporary anti-dumping duty applied to Korea will be effective until March 2022. New Zealand do not have countervailing and safeguard measures pending or in effect.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.