Экономические науки/2. Внешнеэкономическая деятельность
Assosiate Professor Novikov M.V.,
The Russian Presidential Academy of National Economy
and
Public Administration, Russia
Assosiate Professor Zemlyanskaya S.V.
Volgograd State University, Russia
Special
protection of the internal market
One
of the main conductors of reinforcing the globalization process of the world
economy is the liberalization of the international trade, both at the
intercountry and interregional levels, which is achieved through the reduction
or abrogation of trade barriers. Reducing the protectionism level inevitably
leads to the increased competition between domestic and foreign manufacturers,
the results of which are often manifestations of unfair competition from the
foreign exporters’ side in the form of price discrimination of domestic goods.
Traditional tools to protect the domestic market in such cases involve the use
of special protective, antidumping and countervailing measures, each of which,
in spite of the goals communion, has its own characteristics.
The
practice of using special protective measures was caused by the need to
eliminate under the General Agreement on
Tariffs and Trade the so-called "gray zone measures", the use of
which was not regulated by any GATT rules, did not have a sufficient degree
of transparency and contradicted the
basic principles of the GATT and the WTO.
Special
protective measures are commonly understood as the measures to limit access to
the domestic market of a certain goods category used on a provisional basis,
provided these products import into the State customs territory in such
increased amount and on such conditions that it is detrimental to the domestic
industry or poses a threat of such damage.
Specificity
of special protective measures is that they are applied on a non-discriminatory
basis and in the form of either a special fee, or an import quota. While the
anti-dumping and countervailing measures are discriminatory and suggest
elimination of price discrimination only through anti-dumping or countervailing
duties.
Another
feature of special protective measures is that they can be introduced both for
economic and political reasons.
In
the first case, special protective measures are used as a defensive tool, if
the goods are imported into the customs state territory in the amounts and on
the conditions causing or threatening to cause damage to domestic manufacturers
of competing products.
In the second case, special
protective measures act as "punitive tariffs" used as a response to
discrimination and other actions that infringe upon the interests of the
country, from other states or their unions, i.e. wear retortion character.
The main objective of
introducing a special duty or import quota is not the adjustment of competition
as in the case of anti-dumping and countervailing measures, but providing
opportunities for domestic producers to adapt to changing economic conditions.
This point is reflected in paragraph 4 of art. 7 of the Agreement on special protective
measures, which states that a safeguard measure must be
cushioned by the competent authority in regular intervals throughout its
duration.
Non-discriminatory nature of a special protective measure suggests that
it is applied to goods imported into the customs territory, regardless of the
country of the goods origin.
Exceptions are goods originating from developing countries, enjoying the
national system of preferences, if the import share of the product does not
exceed 3% of its total import into the customs territory. At the same time the
total share of imports of this product from developing countries, whose
participation is less than 3%, must not exceed 9% of the total imports of such
goods in the state customs territory.
Specific duties may be imposed only on the basis of the results of
the conducted by the competent authority investigation, in the course
of which a causal link between increased imports and serious injury to sectors
of the national economy.
The investigation may be initiated if the share of the applicant and
supported him producers of similar or directly competitive goods, is at least
50% of the total output of the given product in the importing country.
Without investigation a special duty may be applied to
agricultural products till the end of the calendar year in which it was
introduced, and in an amount not exceeding one third of the current rate of
customs duty on such goods, provided that the import growth of the product on
customs territory exceeds the trigger level.
The trigger level is determined by the proportion of the product import
in the amount of domestic consumption in the importing country for the
preceding 3 years, proceeding from the following indicators:
1. If the import share of the product is less than or
equal to 10%, the basic level is 125%;
2. If the import share of the product more than 10%
but less than or equal to 30% the basic level is 110%;
3. If such import share of the good exceeds 30%, the
basic level is 105%.
Criteria for determining serious damage or threat of damaging are
considered such indicators as:
1. The rate and amount of import growth of the product under investigation
into the single customs territory in absolute and relative indicators to the
total volume of production or consumption in the member countries of directly
competitive goods;
2. The
share of imported product under investigation in the total sales of the product
and similar or directly competitive product in the market of the member
countries;
3. The
price level of the imported product under investigation compared to the price
of similar or directly competitive goods produced on the territory of the CU
member countries;
4. The
change in the output volume of the similar or directly competitive good,
productivity, capacity utilization rate, profits and losses amounts and the
level of employment in the sector of the economy of the member countries.
Validity special protective measure should not exceed
the time necessary to eliminate significant damage to industry or to prevent
the threat of such damage and to adapt the sector of the Russian economy to a
competitive environment. Thus the specified period may not exceed four years.
Validity of special protective measure may be extended
if as a result of the reinvestigation there will be established by the
competent authority that a substantial damage to the sector of the economy or
the threat of such damage persists, provided that there is evidence that the
relevant sector of the economy of the participating parties takes measures to
adapt it to changed conditions of competition.
However, the maximum total validity period of special
duty should not exceed eight years, taking into account the duration of the
provisional specific duty and the period for which the existing special
protective measure was extended. Within the framework of WTO rules a withdrawal
from this provision is made with regard to developing member countries, that
according to paragraph 2 of art. 9 of the Agreement on special protective
measures are allowed to extend the maximum period for
another two years, i.e. up to ten years.
A special protective measure may not be re-applied to the product, which
it has already applied to, for a period equal to the validity period of the
previous special protective measure. The minimum period during which the
special protective measure is not applicable, must be at least 2 years.
If the validity of special protective measure is 180 days or less, then
its re-use to the same product may not be earlier than one year after the
introduction of the previous special protective measure, and if such a measure
is not applicable to this product by more than 2 times during 5 years preceding
the date of introduction of a new special protective measure.
If the term of a special protective measure exceeds
three years, not later than eighteen months after its introduction there should
be held a retrial, which could result in a special duty extension, cancellation
or mitigation.
While prolongation of the special duty as a result of
the reinvestigation conditions for its application cannot be more restrictive
than the application conditions during the initial period of validity.
If the delay in the application of special protective
measures has caused or may cause serious damage to the economic sector that
will be hard to remove later on the basis of pre-established explicit causal
link between the increased import of the good into the customs territory and
serious injury or threat of such damage, special protective measures may be
applied by introducing a provisional specific duty, provided simultaneous
investigation in order to obtain the final conclusion. Validity of the
provisional specific duty should not exceed 200 days.
Provisional specific duty is used for more rapid
implementation of protective function.
If as the results of the investigation, the competent
authority has established that there is no basis for the application of special
protective measures, the provisional specific fees paid at the investigation
stage should be refunded to the payer.
If the investigation establishes the feasibility of
introducing specific duty with a lower rate than it was used in the provisional
stage, the difference between provisional and final specific duty should be
returned to the payer, and the balance should be credited to the budget in the
order established by agreement between member countries on the admission of
customs duties and other types of fees.
If the final specific duty rate is higher than
the provisional specific duty rate, the difference between them will not be
charged to the payer.
If on the results of the investigation it is decided to apply special
protective measure, the validity of the provisional specific duty is reckoned
towards the total period of a special protective measure, but the amount
provisional specific duty is transferred to the budget in accordance with a
separate agreement between the Parties governing the admission and distribution
of customs duties, other types of duties, taxes and charges having an
equivalent effect.
If the special protective measure is applied by establishing
import quotas, the level of such import quota should not be below the average
imports volume of the product under investigation in the 3 years preceding the
date of filing an application for investigation, in which statistics are
available, except cases of need to establish a lower level of import quota to
eliminate severe damage to economic sector of the Parties or the threat of such
damage.
Thus, special protective measures are an effective mechanism for the
protection of national industries and the economy in general excluding their
use in a discriminatory manner that does not undermine the basic principles of
international trade, embodied in international and intergovernmental
agreements.
Literature
1. Daniltsev A.V. International
trade: management tools. – М., 2004.
2. Dyumulin I.I. International
trade. Tariff and non-tariff regulation. – М., 2011.
3. Basics of trade policy and WTO rules. – М., 2006.
4. Agreement on the application of special protective, antidumping and
countervailing measures towards the third countries. URL:
http://tsouz.ru/Docs/IntAgrmnts/Pages/S_antidempmeri.aspx (Access Date October 3, 2013).
5. Agreement on Agriculture. URL:
http://www.wto.ru/documents.asp?f=sogl&t=13 (Access Date October 3, 2013).
6.Agreement on
special protective measures. URL:
http://www.wto.ru/documents.asp?f=sogl&t=13 (Access Date October 3, 2013).