Countervailing duties
Encyclopedia
Countervailing duties also known as anti-subsidy duties, are trade import duties imposed under WTO
Rules to neutralize the negative effects of subsidies. They are imposed after an investigation finds that a foreign country subsidizes
its exports, injuring domestic producers in the importing country. According to World Trade Organization
rules, a country can launch its own investigation and decide to charge extra duties, provided such additional duties are in accordance with the GATT
Article VI and the GATT "Agreement on Subsidies and Countervailing Duties".
Since countries can rule domestically whether domestic industries are in danger and whether foreign countries subsidize the products, the institutional process surrounding the investigation and determinations has significant impacts beyond the countervailing duties.
Countervailing duties in the U.S. are assessed by the International Trade Administration
of the U.S. Department of Commerce which determines whether imports in question are being subsidized and, if so, by how much. If there is a determination that there is material injury to the competing domestic industry, the Department of Commerce will instruct U.S. Customs and Border Protection
to levy duties in the amount equivalent to subsidy margins.
Petitions for remedies may be filed by domestic manufacturers or unions within the domestic industry, however the law requires that the petitioners represent at least 25% of the domestic production of the goods for which competition is causing material injury.
World Trade Organization
The World Trade Organization is an organization that intends to supervise and liberalize international trade. The organization officially commenced on January 1, 1995 under the Marrakech Agreement, replacing the General Agreement on Tariffs and Trade , which commenced in 1948...
Rules to neutralize the negative effects of subsidies. They are imposed after an investigation finds that a foreign country subsidizes
Subsidy
A subsidy is an assistance paid to a business or economic sector. Most subsidies are made by the government to producers or distributors in an industry to prevent the decline of that industry or an increase in the prices of its products or simply to encourage it to hire more labor A subsidy (also...
its exports, injuring domestic producers in the importing country. According to World Trade Organization
World Trade Organization
The World Trade Organization is an organization that intends to supervise and liberalize international trade. The organization officially commenced on January 1, 1995 under the Marrakech Agreement, replacing the General Agreement on Tariffs and Trade , which commenced in 1948...
rules, a country can launch its own investigation and decide to charge extra duties, provided such additional duties are in accordance with the GATT
General Agreement on Tariffs and Trade
The General Agreement on Tariffs and Trade was negotiated during the UN Conference on Trade and Employment and was the outcome of the failure of negotiating governments to create the International Trade Organization . GATT was signed in 1947 and lasted until 1993, when it was replaced by the World...
Article VI and the GATT "Agreement on Subsidies and Countervailing Duties".
Since countries can rule domestically whether domestic industries are in danger and whether foreign countries subsidize the products, the institutional process surrounding the investigation and determinations has significant impacts beyond the countervailing duties.
Countervailing duties in the U.S. are assessed by the International Trade Administration
International Trade Administration
The International Trade Administration is an agency in the United States Department of Commerce that promotes United States exports of nonagricultural U.S...
of the U.S. Department of Commerce which determines whether imports in question are being subsidized and, if so, by how much. If there is a determination that there is material injury to the competing domestic industry, the Department of Commerce will instruct U.S. Customs and Border Protection
U.S. Customs and Border Protection
U.S. Customs and Border Protection is a federal law enforcement agency of the United States Department of Homeland Security charged with regulating and facilitating international trade, collecting import duties, and enforcing U.S. regulations, including trade, customs and immigration. CBP is the...
to levy duties in the amount equivalent to subsidy margins.
Petitions for remedies may be filed by domestic manufacturers or unions within the domestic industry, however the law requires that the petitioners represent at least 25% of the domestic production of the goods for which competition is causing material injury.
See also
- World Trade OrganizationWorld Trade OrganizationThe World Trade Organization is an organization that intends to supervise and liberalize international trade. The organization officially commenced on January 1, 1995 under the Marrakech Agreement, replacing the General Agreement on Tariffs and Trade , which commenced in 1948...
- Trade sanctions
- Non-tariff barriers to tradeNon-tariff barriers to tradeNon-tariff barriers to trade are trade barriers that restrict imports but are not in the usual form of a tariff. Some common examples of NTB's are anti-dumping measures and countervailing duties, which, although they are called "non-tariff" barriers, have the effect of tariffs once they are...
- Antidumping
- Safeguards
External links
- Countervailing law news and advice
- WTO on Anti-dumping, subsidies, safeguards: contingencies, etc
- http://go.usa.gov/KxK"Countervailing duties" in the Global Legal Information NetworkGlobal Legal Information NetworkThe Global Legal Information Network is a cooperative, not-for-profit federation of government agencies or their designees that contribute national legal information to the GLIN database. It is an automated database of statutes, regulations and related material that originate from countries in the...
] - http://go.usa.gov/KxkWorld legislation on "countervailing duties" in the Global Legal Information NetworkGlobal Legal Information NetworkThe Global Legal Information Network is a cooperative, not-for-profit federation of government agencies or their designees that contribute national legal information to the GLIN database. It is an automated database of statutes, regulations and related material that originate from countries in the...
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