Trade Remedy
Trade remedy is a border measure applied by governments on imports of a product where the total imports have surged (safeguards) or the imports are dumped or subsidized (anti-dumping and countervailing measures, respectively).
Trade remedy is typically implemented in response to specific trade distortions, such as unfair subsidies, dumping (selling goods below their normal value), or the surge of imports that harm domestic industries. Furthermore, these measures are intended to provide temporary relief and enable affected industries to adjust, regain competitiveness, and protect jobs.
Trade Remedy Measures
Anti-Dumping Measures
Anti-dumping measures are implemented to counteract the practice of dumping. Dumping occurs when foreign companies flood a market with their products at prices significantly lower than their production costs or the prices charged in their home market. Anti-dumping measures, such as anti-dumping duties, aim to offset the price advantage created by dumping and restore fair competition in the affected industry.
Countervailing Duties
Countervailing duties levied on imported goods that receive subsidies from their country of origin, which can come in different forms, including direct grants, tax incentives, or subsidized loans. The purpose of countervailing duties is to offset the advantages conferred by these subsidies and ensure fair competition for domestic producers. By neutralizing the impact of subsidies, countervailing duties establish an equitable environment in which both domestic and imported goods can compete on a level playing field.
Safeguard Measures
Finally, safeguard measures serve as temporary trade remedies implemented to safeguard domestic industries from abrupt surges in imports that could potentially result in significant harm. These measures encompass import quotas, tariffs, or a combination thereof. By implementing safeguard measures, domestic industries are granted temporary relief, enabling them to adapt to heightened competition and regain their competitive edge.