Business Law environment essay
farhm9
Ch11ImportReguKemp_041613.pptxBA177: Legal Environment of World Cultures
Chapter 11: Regulating Import Competition and Unfair Trade
Kemp lecture
Double edged sword of import competition
Competing national political interests
Protectionism vs. free trade
“International rules serve as a check on these competing national political interests.”
Safeguards Against Injury
= “emergency actions used to protect a domestic industry that produces a like or competing product from increasing volumes of imported goods.” Like tariffs, quotas, etc.
GATT Escape Clause from 1947 allows temporary corrective action to correct an industry when 1. unforeseen development, 2. due to tariff obligation, 3. increased amounts of imported product and 4. threatens “serious injury to domestic” producers of the product.
WTO Agreement on Safeguards – U.S. does by ITC investigation.
Global safeguards means restrictions on product, not based on the nation of import.
Temporary and restrictions
Trade compensation to affected nation may be imposed.
WTO Committee on Safeguards
U.S. Safeguards Against Injury
Section 201 of 1974 Trade Act
Standard for relief similar to GATT
ITC safeguard investigation more detailed than GATT – substantial cause
Remedies are time to retool, modernize, etc.
Heavyweight Motorcycles, pp.344-345
Employees may get trade adjustment assistance if
lot of workers laid off,
Decrease in sales or production, and
Import competition contributed substantially
Dumping and Antidumping Duties
“Selling products in foreign country for less tan the price charged for the same…goods in the producer’s home market.”
National laws and GATT “permit the importing country to impose antidumping duties on dumped products to offset the unfair low price and to prevent injury to a domestic product.
Dumper is trying to get monopoly power and will raise prices after drives competition out of business.
GATT 1994 and WTO 1994 Antidumping Agreement
U.S. has ITA and ITC determine whether there is dumping, what the dumping margin is, defining like product, calculating export price, etc.
Material injury requirement
Chilean Salmon case
Subsidies and Countervailing Duties
Governments pay nationals to “help” due to some governmental policy. Result is damaging to free trade in the subsidized product.
WTO Agreement on Subsidies and U.S. law
“There must be a financial contribution from government that confers a benefit.”
Specific subsidies only = financial aid to select companies or industries (eg, wheat)
Actionable subsidies must be either prohibited or actionable, the latter not being per se illegal and needing to show “serious prejudice.”
Dispute settlement through WTO or U.S. procedures.
European Steel case. Was U.S. law really different from WTO law?
Chapter Summary
Right of nation to protect domestic industries
WTO allows global safeguards, ones that apply to industry without regard to country
In U.S. ITC and ITA determine whether safeguards are appropriate.
Trade adjustment assistance for workers
Dumping is unfair trade practice of selling goods in foreign country for less than sell same goods in own country.
Subsidy is government financial contribution to domestic industry. Illegal ones include export, import and adverse effects subsidies.
Countervailing duties can now be applied to non-market economies, especially Chinese products.
WTO decisions have caused U.S. to change some of its unfair trade law.
Problems
5. Smith-Corona v. Brother typewriter case
6. American winemakers v. French and Italian wine makers. Ignore the question and explain from the text what the U.S. would have to show to prevail. Compare U.S. law and WTO law.
