The Global Context of Trade Remedy Practice
Jamaica is a Member of the World Trade Organisation (WTO). Members of the WTO make the multilateral rules on Trade Remedies by negotiation and agreement. The Rules govern the disciplines practice of Trade Remedy disciplines by and between Members. Everything done at the WTO is born out of negotiations, that is, governments getting together to talk and to sort out the trade problems they face with each other. The Rules are contained in the following WTO Agreements:
- Article VI of the General Agreement on Tariffs and Trade 1994
- Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 (the Antidumping Agreement or ADA)
- Article XVI of the General Agreement on Tariffs and Trade 1994
- Agreement on Subsidies and Countervailing Measures (the Subsidies Agreement or SCMA)
- Article XIX of the General Agreement on Tariffs and Trade 1994
- Agreement on Safeguards (the Safeguard Agreement or SA)
Disciplines on trade remedies arose out of rounds of negotiation by Members, first under the General Agreement on Tariffs and Trade (GATT). Since 1995, the GATT arrangement gave way to the WTO, which is the international organization that regulates trade between the majority of nations under the web of agreements called the “multilateral” trading system.
The ultimate objective of the WTO is to foster free and fair trade between nations. In the pursuit of this objective, the WTO has a number of core principles. They include:
- National Treatment of all Members except in agreed upon circumstances.
- Most Favored Nation (MFN) treatment of all Members.
- Negotiated bindings of tariff levels beyond which members agree not to raise tariffs on imported products.
The move to liberalize trade between nations has first been an effort to reduce tariffs and other measures that prevent access to markets of internationally traded products and to a lesser extent, services. However, it has been recognized that in the move to liberalize trade by removing barriers, nations would face adjustment costs and there would be instances where unfairly priced imports would enter the markets of Members. Nations reacted to such challenges with methods which included antidumping and countervailing and measures referred to as “grey area” measures. The current rules or disciplines on how members should react were developed in a series of negotiating rounds. The disciplines were necessary to prevent individual nations undertaking action unilaterally. Unilateral action by Members would violate core WTO principles, including MFN and Tariff Bindings. The rules on trade remedies therefore arose as exceptions to these core principles of the WTO. They allow Members to continue to liberalise and still preserve room for action against imports in a Member’s interest in certain fairly narrowly prescribed circumstances.
There is no obligation on members to use these trade remedies. However every WTO member is entitled to use them and they have increasingly become popular as trade defence mechanisms. Canada was the first country to have trade remedy legislation in 1920, next was the United States. The international rules on trade remedies were influenced to a large extent by these countries, and in some cases the provisions of the agreements mirror their legislation.
1. Treating all members equally, essentially treating no nation better or worse than another.
2. Tariffs are bound, that is cannot go higher than a negotiated level.
3. There are other principles and exceptions. For more detailed information it is advisable to consult the WTO source documentation. See also www.wto.org
The WTO agreements are negotiated and signed by the vast majority of the world’s trading nations. They are at the heart of the WTO. They are based on the consensus of all participating members and are ratified domestically be each member. They provide the legal framework for international commerce, and each agreement deals with specific issues. The WTO provides the overarching global context for the work done by the Anti-dumping and Subsidies Commission, Kingston, Jamaica.
Visit the WTO website at www.wto.org