The countries that are part of the World Trade Organization (WTO) account for 98% of world trade. The signing of the Marrakesh Agreement, which established the WTO on January 1, 1995, was the closing point of a multilateral negotiation process that deepened the old GATT system and shaped a set of international trade regulations. More than 160 countries internalized its regulations, with the objective of granting greater openness in the circulation of goods and services at a global level, within a framework of predictability, transparency and non-discrimination. These commitments redesigned the actions of its members, who had to adjust to the provisions of the WTO.
The general principles of the WTO are central to international trade relations, in order to achieve fair and undistorted competition. Thus, Article I of the GATT refers to thethe Most Favored Nation (MFN) clause In order to ensure equal treatment among members, the conditions granted to any contracting party, whether tariff or non-tariff, must be extended to all other WTO members. For its part, the principle of National Treatment, whose central rule is Article III of the GATT, seeks to avoid discrimination between national and foreign products through discriminatory practices within the market of each Member country, to which is added tariff consolidation, as a legal commitment of the parties not to exceed tariffs at a certain level, thus preventing the increase of tariffs above the same (bound tariff).
The WTO Agreements are based on these principles, which also allow for exceptions, such as the possibility of applying trade defence measures (anti-dumping, anti-subsidy and safeguard measures, detailed below). The Safeguards Agreement allows for the application of “emergency measures” to neutralise the adverse effects on national production caused by an untimely increase in imports, which cause serious damage to national producers. These measures temporarily limit imports regardless of their origin and are intended to “safeguard” the affected production branches and facilitate their readjustment.
The Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade of 1994 of the WTO (Anti-Dumping Agreement) and the Agreement on Subsidies and Countervailing Measures authorize governments to adopt anti-dumping measures or countervailing duties against unfair practices in international trade. The very purpose of applying this type of measures is to establish fair conditions of competition between imports from specific countries and goods produced in Argentina.
This remedy normally involves adding an anti-dumping or countervailing duty to the import price that may be applied to the imported unit (specific rights), as a percentage of the value of the imported product (ad valorem duty) or establishing a minimum value per unit of the product at which imports must enter the Argentine market (Minimum FOB).
In the case of compensatory measures, they are applied to counteract a specific, direct or indirect subsidy granted by the authorities of the exporting country, with the aim of adjusting the artificial advantage that the subsidized good has and equalizing its import price to what it would have been if the subsidy did not exist in its market of origin.
Anti-dumping measures are applied if price discrimination between the domestic market and the export market by a private company is proven, and it must be established that these dumped imports cause or threaten to cause significant damage to the national production branch that produces a good similar to the imported one.
From all of the above, it can be seen that the trade defence measures adopted by the WTO Agreements have the objective of re-establishing, in the face of unfair conduct, non-harmful trade conditions, contributing to protecting the activities of the national production branch and therefore the employment of the affected companies.
It is essential to observe the principles to which the members of the WTO subscribed, but above all not to lose sight of the fact that, in the event of the configuration of any of the unfair practices described, there are specific Agreements that enable trade defence, complying with a procedure that provides guarantees of defence for the parties involved and analysing a series of economic and financial variables that ultimately allow corrective measures to be imposed.
Trade protection measures enable the authorities of the countries that implement them to maintain a prosperous economy by safeguarding jobs, since the impact on the national production sector translates into affected national employment, which is a very relevant indicator for any country. Thus, developing countries have benefited from protection instruments, with the Antidumping Agreement being the most widely applied.
Lawyer from the University of Buenos Aires (UBA). Specialization in State Law - Treasury Attorney of the Nation. Manager of Commercial Standards and Instructions of the National Commission of Foreign Trade (CNCE), a decentralized body within the Ministry of Economy. Professor of the Bachelor's Degree in International Trade, the Diploma in Customs Law and the Postgraduate Specialization in Global Business at CAECE University.
