Negotiating a Preferential Trading Agreement

Negotiating a Preferential Trading Agreement

Issues, Constraints and Practical Options

Edited by Sisira Jayasuria, Donald MacLaren and Gary Magee

Presenting a blend of economics and law, this book provides unique insights as well as practical guidance for negotiators considering major issues on the agendas of bilateral and regional preferential trading agreements (PTAs).

Chapter 11: Safeguards, Anti-Dumping Actions and Countervailing Duties

Martin Richardson

Subjects: asian studies, asian urban and regional studies, business and management, international business, economics and finance, international business, international economics


Martin Richardson INTRODUCTION In the interests of ‘fair trade’, the General Agreement on Tariffs and Trade/ World Trade Organization (GATT/WTO) multilateral trade agreement contains a number of provisions that swim directly against its general current and allow countries to protect their import interests.1 These provisions fall under the general heading of Administered Protection, meaning that a member country simply has to put in place the relevant administrative structure to operate in accordance with WTO guidelines, and the imposition of protective duties or quantitative restrictions then becomes an administrative matter. This is in contrast to the more usual tariff protection that generally requires legislative intervention each time and requires a country to consider its international obligations in each case. Consequently, administered protection provides a much easier and less costly route to protection for a firm and these measures have very much become the ‘new new protectionism’.2 Furthermore, once enabling legislation is in place, the imposition of trade restrictions via administered protection is essentially a unilateral decision with (at least for anti-dumping and countervailing duties) no obligations for compensation. This sits very uneasily in the WTO/GATT multilateral framework of reciprocity. The WTO/GATT provisions regarding so-called safeguards (SG), antidumping (AD) and countervailing duties (CVD), find no justification on purely economic grounds. The one rationale provided for AD – the prevention of predatory behaviour – in fact is not articulated in the GATT provisions at all, nor is it any longer contained in the enabling legislation of any countries of which I am aware. (It was...

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