Elgar International Economic Law series
Chapter 8: Procedural requirements relevant to the countervailing duty investigation
7. Conditions for imposition of countervailing measures Countervailing duty (‘CVD’) relief can be offered in case subsidized imports are causing injury to the domestic industry of the country of importation. In other words, for a CVD to be imposed, an investigation needs to establish the existence of (i) subsidized imports, (ii) injury to the domestic industry; and (iii) a causal link between the subsidized imports and the injury to the domestic industry. These conditions for imposition mirror those required for imposing antidumping measures. The obvious main difference is the fact that where, in anti-dumping, the dumping practice was the key, in an anti-subsidy action, it will be essential to demonstrate the existence of subsidization of the imported product. It is worth noting from the outset that the imports may well be subsidized and dumped at the same time. Depending on the kind of investigation initiated, the factual focus will be different, examining either subsidization or dumping. The two remaining conditions for imposition, injury to the domestic industry and the existence of the causal link between the (subsidized or dumped) imports are very similar, while not identical, in CVD and AD investigations. A SUBSIDIZED IMPORTS If there are no imports, or if it cannot be established that the targeted imported products have been subsidized, no countervailing duty can be imposed. A CVD measure thus stands or falls with the existence of a subsidy to the imported product. But what is a subsidy? The various GATT provisions dealing with subsidies, such as...
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