12 June
Misunderstandings and misinterpretations
•Other country export-ing their used products is dump-ing and it must be restricted
•In order to strengthenand protect local industries at an early stage of their develop-ment Anti-dumping Tax is to be collected on similar products imported into Myanmar
•Safeguard Measuresneed to be put in place by in-creasing tax on imports to pro-tect local industries
The above mentioned com-ments are the most common words heard when meetings between local businesses and policy makers were held. In oth-er words, it is a misunderstood and personal interpretation of Trade Remedies set down by World Trade Organization.
Free Trade or Fair Trade
Majority of the people think of WTO as an organization aim-ing for Free Trade. However, one should note that Free Trade is not always Fair Trade. Quot-ing directly from its website WTO say it is the only inter-national organization dealing with the global rules of trade. Its main function is to ensure that trade flows as smoothly, pre-dictably and freely as possible.
WTO ensure that trade is as fair as possible by negotiat-ing rules and abiding by them. The WTO’s rules — the agree-ments — are the result of nego-tiations between the members. The complete set runs to some 30,000 pages consisting of about 30 agreements and separate commitments (called sched-ules) made by individual mem-bers in specific areas, such as lower tariffs and services mar-ket-opening. The agreements also include remedial action or Trade Remedies in case of disruption of fair trade to an importing country as well as to a third country that was export-ing to the importing country.
Trade Remedies
In order to ensure fair trade WTO allow member countries to use Trade Remedies. The three Trade Remedies in brief are:
a.Anti Dumping or AD:Dumping occurs when a coun-try sells a product to another country at a price lower than its actual production cost. Some country practices this to gain market share. If this occurs, the importing country’s domes tic manufacturing sector will be affected. When the importing country finds out about this, it is permitted to conduct An-ti-Dumping measures meaning the collection of Anti-Dumping duty on the imported product.
b.Countervailing Duty or CVD: A government subsidize its manufacturers with cash or kind in order for the manufac-tured product to compete in the market. The outcome is that product gain market share as it can sell at cheaper rate than the same product manufactured at other country where the man-ufacturers were not subsidized. This will also affect the import-ing country’s manufacture of that product. If this happen the importing country conduct nec-essary investigations and take countervailing action in term of Countervailing Duty on the sub-sidized product.
c.Safeguard: Safeguard measure is defined as “emer-gency” action with respect to increased imports of particular product(s) that cause or threaten to cause serious injury to the importing country’s domestic in-dustry. In other word, it is raising the amount of tax collected on the imported product or place restriction on the amount of product that can be imported. The recent tax increase by EU on Indica Rice from Myanmar and Cambodia is the practice of the Safeguard mechanism. The important point here is that if the product exported by a country was not subsidized or was being dumped this was not an Unfair Trade and the country taking up Safeguard measure is liable to pay fair compensation to the exporting country if demanded. Furthermore, Safeguard is a tem-porary measure and could not be practiced for more than four years.
Practicing Trade Remedies
Requirements to practice Trade Remedies well include subject and technology wise expertise as well as being well versed in negotiating skills.
If our country encounters dumping, subsidized imports and import surge causing material or serious injury or threat to local industries an investigation must be conducted first.
Only after having firm ev-idences can we inform WTO about it and practice one of the three Trade Remedies. In do-ing this, countries enact laws, regulations, setup procedures and announcements on Trade Remedies. However of the 164 WTO member countries, 74 coun-tries hadn’t enacted laws and regulations on Anti-dumping, 73 countries hadn’t enacted laws and regulations on CVD and 120 coun-tries hadn’t enacted laws and reg-ulations on Safeguard. Most coun-tries were seen to have chosen the path of enacting law(s) and regulation(s)for a Trade Remedy that was most appropriate for it.
Among the ten ASEAN coun-tries Thailand, Malaysia, Indone-sia, Philippines and Viet Nam had enacted AD, CVD and Safeguard laws. Singapore had enacted AD and CVD laws but no law on Safe-guard. Cambodia and Laos were under the process of drawing up laws. Myanmar and Brunei had no laws on Trade Remedy.
Practicing Trade Remedies sometime leads to disputes and there were some instances when it went up to WTO Arbitration process. According to information up to 2019 there were 131 dis-putes on Dumping, 127 disputes on Countervailing and 61 disputes on Safeguard.
Legal frame
Relevant persons were found working together to strengthen legal frames related to businesses in Myanmar. Strengthening legal frames doesn’t mean Pyidaungsu Hluttaw enacting laws only. Rele-vant rules and procedures were to be established and announce-ments and notifications issued. The governmental entity that is implementing the law, rules, procedures, announcements and notifications must have the ca-pacity to do it.
Only when everything relat-ed to the law can be worked on can the legal frame considered as completed. Some international legal experts had pointed out that Myanmar was able to enact many laws but some hadn’t reached a stage to be practiced yet and ca-pacities of the law implementing governmental entities also need to be raised.
Laws on Trade Remedies were drawn up and enacted to protect the country’s local busi-nesses and to protect from unfair trade practices. The laws include in depth matters on related sub-jects as well as special matters and the majority of the countries were found to form specially es-tablished and trained entity to implement the laws.
When a review was conduct-ed on some countries, it was found that drawing up, enacting and implementing trade remedy laws took from three to five years to seven to ten years.
By Aung Naing Oo
(Translated by Handytips)
