Antidumping, Countervailing Duties and Non-Market Economies

In the context of international trade in goods, antidumping duties and countervailing measures are the so-called defensive measures that every World Trade Organization (WTO) member state may apply against imported products under certain conditions. They are qualified as defensive measures because they normally consist of additional customs duties which are applicable when, in the case of dumping, the foreign products are imported at a price less than a reference price, that is, normal value, and, in the case of countervailing measures, when the products benefited, in the country of origin or exportation, from a subsidy granted by the government, by local governmental entities, or in other forms. Antidumping duties and countervailing measures may be applied only after the authorities of the importing states have investigated the existence of the margin of dumping or the value of the subsidy, the existence of a risk or of an effective injury to a domestic industry, and the causal link between these. The duties that may be applied must not exceed the level of the margin of dumping, which is the difference between the export price and the normal value, or subsidy. WTO rules provide special procedures that national authorities must follow in deciding whether to impose such measures. The rules are provided in The General Agreement on Tariffs and Trade (GATT)1 Article VI and, in much greater detail, in the agreement on implementation of Article VI of the GATT, the so-called Antidumping Agreement, and in the Agreement on subsidies and countervailing measures, the Subsidy Agreement.