Unfair practices and dumping: Trade remedies are a double-edged sword
Trade remedies are like a double-edged sword and need to be used in accordance with World Trade Organisation (WTO) rules which require a lot of exercise and precision since dumping and subsidized goods are considered unfair practices in international trade. This was stated by Seref Gokay Coskum, Technical Trade Specialist, WTO Geneva addressing a workshop on trade remedies held at the Ceylon Chamber of Commerce (CCC) auditorium recently. It was organised by the Department of Commerce in collaboration with the CCC.
T.M.K.B. Tennekoon, Secretary, Ministry of Industry and Commerce, making the opening address said that the private sector and the government should jointly discuss issues involving the country’s trade. This is pertaining to issues which require domestic legislation to ensure protection to cushion from injurious effects of imports from international market and non-market economic countries. He said that they would ensure the country’s industrial sustainability to make the country an industry and export hub.
Domestic legislation would be prepared in conformity with a multilateral rule-based system and draft legislation on trade remedies has now been submitted to the Cabinet office for approval, he remarked. Mr. Tennakoon noted that the challenge the country’s primary products face is market access to other countries because of unfair trade practices by competitors. Because of these unfair practices, subsidised products from other countries find easy access to Sri Lanka’s markets affecting the ability of local manufacturers to penetrate these sources with competitive pricing.
He pointed out that it is vital that the policy makers of this country adopt countervailing measures to help protect local manufacturers and enhance their competitiveness in the local and global trade environment. Mr. Coskum said that dumping and subsidization could be considered as unfair practices in international trade and the protection provided is conditioned on strict disciplines. He said someone has to use these double-edged trade remedies and someone has to implement them in line with internationally-agreed disciplines where national authorities are in between these competing concerns.
Thus, he stressed the need to use the ‘sword’ in accordance with the WTO rules which requires a lot of exercise and precision.
There are opponents and proponents of trade remedies, Mr. Coskum said, adding that the opponents argue that trade remedies are protectionist by nature and should be avoided to increase efficiency globally, while the proponents assert that dumping and subsidization are unfair practices in international trade. He said that if the rules are not adhered to then there should be domestic judicial proceedings.
This is followed by the WTO dispute settlement mechanism and if such an investigation is found inconsistent with set agreements, then a penalty would be recommended. He said that the investigation has a long process which requires submission of extensive information from domestic as well as foreign private parties and there cannot be investigation without domestic industry involvement. The party has to trust the investigating authority as there could be confidential information.