Trade Remedies Flashcards
How is normal value calculated?
Normal value is calculated based on:
* Price of the product in the exporter’s domestic market (definition)
* Price charged by the exporter in another country
* Combination of the exporter’s production costs, other expenses, and normal profit margins
When should the investigation stop regarding dumping?
The investigation should stop when:
* Margin of dumping is less than 2% of export price
* Volume of dumped imports is negligible (less than 3% of total imports of that product)
What are the two types of subsidies?
The two types of subsidies are:
* Prohibited subsidies (require recipients to meet certain export targets)
* Actionable subsidies (complaining country must show that the subsidy has adverse effects on its interests)
What is the GATT Article 19 about?
GATT Article 19 allows countries to raise tariffs or restrict imports of a specific product if the import is causing “serious injury” to the domestic industry.
What actions can exporting countries take under safeguards?
Exporting countries can:
* GATT Art. 19
* Voluntary agreements
* Quotas, but cannot target countries
* Retaliate equivalently if compensation is not provided
What is the distinction between fair and unfair actions leading to trade remedies?
Fair actions do not lead to trade remedies, while unfair actions, such as dumping, can trigger protective measures.
What is meant by tariff binding?
Tariff binding refers to a limit on tariffs that a country promises not to exceed.
What is the Anti-Dumping Agreement?
The Anti-Dumping Agreement is a WTO agreement that allows governments to act against dumping when it causes material injury to the domestic industry.
What must be shown to demonstrate dumping?
GATT Art. VI(1) Elements: “dumping [imports] is to be condemned if”
a) causation (cause, threat of cause to established industry, or “materially retards the establishment” of industry)
b) material injury
c) countries (specific exporters)
d) level (cannot be greater than amount of duty necessary to offset the normal value)
Investigate:
1) Are the prices universal?
2) Are specific countries targeted?
What are the elements of countervailing measures?
The elements of countervailing measures include:
* Subsidies
* Material injury
* Causation
* Focused on particular countries/exporters
What is GATT Article VI about?
GATT Article VI creates rules on anti-dumping and countervailing measures and the processes/limits by which retaliation may occur.
What is the duration of anti-dumping measures?
Anti-dumping measures can remain in place as long as necessary, with periodic reviews every 5 years.
What is a key characteristic of safeguards compared to anti-dumping and countervailing measures?
Safeguards are global measures not aimed at unfair behavior, while anti-dumping and countervailing measures are specific to unfair trade.
What are the elements for GATT Art. XIX’s emergency action on imports to be taken?
The elements for GATT Art. XIX are:
a) unforseen developments/effect of oblications
b) increased imports
c) serious injury
d) causation or threat of causation
e) level (no higher than necessary to eliminate the injury)
Different than AD & CVM because you have protection without unfair behavior and, thus, will be a global measure
What is the duration of countervailing measures?
May be in place as long as necessary, with a periodic review every 5 years.
How long may safeguards under GATT Art. XIX be in place?
4+4 rule, which creates a time limitation of 4 years (because no unfair behavior) with the ability to add on 4 years (after new investigation showing serious injury) if the problem is not addressed within the first period of time.
Thus max of 8 years total
