The Law and Economics of Contingent Protection in the WTO
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The Law and Economics of Contingent Protection in the WTO

Petros C. Mavroidis, Patrick A. Messerlin and Jasper M. Wauters

In this important book, three of the leading authors in the field of international economic law discuss the law and economics of the three most frequently used contingent protection instruments: anti-dumping, countervailing measures, and safeguards. When discussing countervailing measures, the authors also discuss legal challenges against prohibited and/or actionable subsidies. The authors’ choice is mandated by the fact that the effects of a subsidy cannot always be confined to the market of the WTO Member wishing to react against it. Assuming there are effects outside its market, an injured WTO Member can challenge the scheme as such before a WTO Panel. Taking the three agreements for granted as a starting point, the book provides comprehensive discussion of both the original contracts, and the case law that has substantially contributed to the understanding of these agreements.
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Chapter 8: Procedural requirements relevant to the countervailing duty investigation

Petros C. Mavroidis, Patrick A. Messerlin and Jasper M. Wauters


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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