If a country restricts its imports to protect its domestic producers, there must in principle be something for it. The agreement stipulates that the exporting country or countries may claim compensation through consultations. If no agreement is reached, the exporting country can retaliate, for example by taking equivalent measures, it can increase customs duties on exports from the country applying the safeguard measure. In certain circumstances, the exporting country must wait three years after the introduction of the safeguard measure before it can retaliate in this way, i.e. if the measure complies with the provisions of the agreement and if it is taken following an increase in the volume of imports from the exporting country. Dumping and subsidies, as well as anti-dumping and countervailing duties, have a number of similarities. Many countries treat both under a single law, apply a similar procedure for dealing with them, and assign responsibility for investigations to a single authority. Occasionally, the two WTO committees dealing with these issues meet. 21.2 The authorities shall verify the need to continue collecting the duty, where justified, by the authorities themselves or, where a reasonable period of time has elapsed since the imposition of the definitive countervailing duty, at the request of an interested party providing positive information in support of the need for verification. Interested parties have the right to request the authorities to examine whether the subsequent imposition of the duty is necessary to offset the subsidy, whether the injury would be likely to persist or recur if the duty were to be removed or modified, or both. If, following the verification referred to in this paragraph, the authorities find that the countervailing duty is no longer justified, it shall be repealed without delay. What is the name of this agreement? Agreement on Implementation of Article VI [i.e. 6] of the General Agreement on Tariffs and Trade 1994 Legal definitions are more precise, but overall, the WTO Agreement allows governments to take measures against dumping where there is actual (substantial) injury to competing domestic production.
To do so, the government must be able to demonstrate dumping, calculate the magnitude of dumping (the extent to which the export price is lower than the exporters` domestic market price), and demonstrate that the dumping is causing or threatening to cause injury. Binding tariffs and their equal application to all trading partners (most-favoured-nation treatment or most-favoured-nation law) are the key to the smooth movement of goods. The WTO Agreements respect the principles, but also provide for exceptions in certain circumstances. Three of these topics are: Introduction to Subsidies and Countervailing Measures in the WTO Section On Links to Subsidies and Countervailing Measures in the WTO Guide « Understanding the WTO ». .