Materi Kuliah Hukum Perdagangan Internasional
6/20/2016
SUBSIDIES &
COUNTERVAILING DUTIES
Subsidies are considered to be "unfair" when they
cause adverse effects. Therefore, Members are
allowed to apply countervailing measures when
subsidized products are imported to their market
at a "low" price in order to offset the impact of
subsidization on their domestic industry of like
products.
6/20/2016
DISCIPLINES ON SUBSIDIES
The SCM Agreement allows Members to seek the
withdrawal of the subsidy or the removal of its adverse
effects under certain conditions.
Subsidies under the SCM Agreement contains three
elements which must be satisfied in order for a subsidy
to exist:
a financial contribution;
by a government or any public body within the
territory of a Member;
which confers a benefit.
The disciplines in the SCM Agreement only apply
to "specific" subsidies
i.e. subsidies available
only to an enterprise, industry, group of
enterprises, or group of industries in the country.
Only a measure which is a specific subsidy is
subject to multilateral disciplines and can be
subject to countervailing measures.
The SCM Agreement defines two categories of
subsidies: prohibited and actionable.
6/20/2016
Prohobited Subsidies
Two categories of subsidies are prohibited.
1. The first category consists of subsidies contingent, in
law or in fact, whether wholly or as one of several
conditions, on export performance ( export
subsidies ).
2. The second category consists of subsidies
contingent, whether solely or as one of several
other conditions, upon the use of domestic over
imported goods ( local content subsidies ) or, in
other words, those subsidies that require recipients
to use domestic goods instead of imported goods.
Actionable Subsidies
Actionable subsidies are not prohibited. However,
they are subject to challenge, either through
multilateral dispute settlement or through
countervailing action, in the event that they cause
adverse effects to the interests of another Member.
The SCM Agreement defines damage they can
cause. One country's subsidies can hurt a domestic
industry in an importing country. They can also hurt
rival exporters from another country when the two
compete in third markets.
6/20/2016
The SCM Agreement states that a country can:
use the WTO dispute settlement mechanism to
seek the withdrawal of the subsidy or the
removal of its adverse effects; or
launch a domestic investigation and ultimately
apply countervailing measures ("countervailing
duties") on subsidized imports that are found to
be causing injury to domestic producers.
COUNTERVAILING MEASURES
An affected WTO Member can launch its own
investigation and ultimately charge extra duty
("countervailing duty") on subsidized imports that are
found to cause injury to domestic producers.
6/20/2016
A Member may not impose a countervailing measure
unless it determines in an investigation according to
the provisions set forth in the SCM Agreement that:
(i) imports are being subsidized;
(ii) there is material injury or thereof to the domestic
industry of like products; and,
(iii) there is a causal link between the subsidized
imports and the injury.
Note
Article VI:3 of the GATT 1994 defines
"countervailing duties":
"The term countervailing duty shall be understood
to mean a special duty levied for the purpose of
offsetting any bounty or subsidy bestowed,
directly or indirectly, upon the manufacture,
production or exports of any merchandise."
6/20/2016
Investigation
A countervailing duty (the parallel of anti-dumping
duty) can only be charged after the importing
country has conducted a detailed investigation
similar to that required for an anti-dumping measure.
There are detailed rules for deciding whether a
product is being subsidized, criteria for determining
whether imports of subsidized products are causing
material injury to the domestic industry, procedures for
initiating and conducting investigations, and rules on
the implementation and duration of countervailing
measures (normally five years).
Countervailing Measures
Countervailing duties may only be imposed pursuant
to investigations initiated and conducted in
accordance with the provisions of this Agreement
and the Agreement on Agriculture
Countervailing measures do not need to be preauthorized by the WTO membership before a Member
can impose them. However, the Member imposing
them must first conduct an investigation and meet the
criteria set in the SCM Agreement.
6/20/2016
The level of the countervailing duty should be
only as high as necessary to offset the
subsidization.
Countervailing duties are to be terminated
immediately where the amount of a subsidy is
de minimis (less than 1% ad valorem) or where
the volume of (actual or potential) subsidized
imports or the injury is negligible.
Investigations are to be concluded
within one year after they are imposed,
and should not last more than 18
months, except in exceptional
circumstances.
Countervailing duties have to be
terminated within five years of their
imposition (sunset clause) unless the
authorities determine, on review, that
the removal of the duty would be likely
to lead to a continuation or recurrence
of subsidization and injury.
6/20/2016
A Member may also want to complain
about the subsidized product in an export
market or in a third-market where two or
more Members' exports compete. In these
cases, the only way to redress and
recreate a "fair competitive environment
is for the country granting the subsidies is
to suspend or modify its subsidization
program.
SUBSIDIES &
COUNTERVAILING DUTIES
Subsidies are considered to be "unfair" when they
cause adverse effects. Therefore, Members are
allowed to apply countervailing measures when
subsidized products are imported to their market
at a "low" price in order to offset the impact of
subsidization on their domestic industry of like
products.
6/20/2016
DISCIPLINES ON SUBSIDIES
The SCM Agreement allows Members to seek the
withdrawal of the subsidy or the removal of its adverse
effects under certain conditions.
Subsidies under the SCM Agreement contains three
elements which must be satisfied in order for a subsidy
to exist:
a financial contribution;
by a government or any public body within the
territory of a Member;
which confers a benefit.
The disciplines in the SCM Agreement only apply
to "specific" subsidies
i.e. subsidies available
only to an enterprise, industry, group of
enterprises, or group of industries in the country.
Only a measure which is a specific subsidy is
subject to multilateral disciplines and can be
subject to countervailing measures.
The SCM Agreement defines two categories of
subsidies: prohibited and actionable.
6/20/2016
Prohobited Subsidies
Two categories of subsidies are prohibited.
1. The first category consists of subsidies contingent, in
law or in fact, whether wholly or as one of several
conditions, on export performance ( export
subsidies ).
2. The second category consists of subsidies
contingent, whether solely or as one of several
other conditions, upon the use of domestic over
imported goods ( local content subsidies ) or, in
other words, those subsidies that require recipients
to use domestic goods instead of imported goods.
Actionable Subsidies
Actionable subsidies are not prohibited. However,
they are subject to challenge, either through
multilateral dispute settlement or through
countervailing action, in the event that they cause
adverse effects to the interests of another Member.
The SCM Agreement defines damage they can
cause. One country's subsidies can hurt a domestic
industry in an importing country. They can also hurt
rival exporters from another country when the two
compete in third markets.
6/20/2016
The SCM Agreement states that a country can:
use the WTO dispute settlement mechanism to
seek the withdrawal of the subsidy or the
removal of its adverse effects; or
launch a domestic investigation and ultimately
apply countervailing measures ("countervailing
duties") on subsidized imports that are found to
be causing injury to domestic producers.
COUNTERVAILING MEASURES
An affected WTO Member can launch its own
investigation and ultimately charge extra duty
("countervailing duty") on subsidized imports that are
found to cause injury to domestic producers.
6/20/2016
A Member may not impose a countervailing measure
unless it determines in an investigation according to
the provisions set forth in the SCM Agreement that:
(i) imports are being subsidized;
(ii) there is material injury or thereof to the domestic
industry of like products; and,
(iii) there is a causal link between the subsidized
imports and the injury.
Note
Article VI:3 of the GATT 1994 defines
"countervailing duties":
"The term countervailing duty shall be understood
to mean a special duty levied for the purpose of
offsetting any bounty or subsidy bestowed,
directly or indirectly, upon the manufacture,
production or exports of any merchandise."
6/20/2016
Investigation
A countervailing duty (the parallel of anti-dumping
duty) can only be charged after the importing
country has conducted a detailed investigation
similar to that required for an anti-dumping measure.
There are detailed rules for deciding whether a
product is being subsidized, criteria for determining
whether imports of subsidized products are causing
material injury to the domestic industry, procedures for
initiating and conducting investigations, and rules on
the implementation and duration of countervailing
measures (normally five years).
Countervailing Measures
Countervailing duties may only be imposed pursuant
to investigations initiated and conducted in
accordance with the provisions of this Agreement
and the Agreement on Agriculture
Countervailing measures do not need to be preauthorized by the WTO membership before a Member
can impose them. However, the Member imposing
them must first conduct an investigation and meet the
criteria set in the SCM Agreement.
6/20/2016
The level of the countervailing duty should be
only as high as necessary to offset the
subsidization.
Countervailing duties are to be terminated
immediately where the amount of a subsidy is
de minimis (less than 1% ad valorem) or where
the volume of (actual or potential) subsidized
imports or the injury is negligible.
Investigations are to be concluded
within one year after they are imposed,
and should not last more than 18
months, except in exceptional
circumstances.
Countervailing duties have to be
terminated within five years of their
imposition (sunset clause) unless the
authorities determine, on review, that
the removal of the duty would be likely
to lead to a continuation or recurrence
of subsidization and injury.
6/20/2016
A Member may also want to complain
about the subsidized product in an export
market or in a third-market where two or
more Members' exports compete. In these
cases, the only way to redress and
recreate a "fair competitive environment
is for the country granting the subsidies is
to suspend or modify its subsidization
program.