Abstract
This chapter focuses on the relationship between competition and international trade. Competition policy is aimed at achieving the most efficient allocation of resources and thereby the maximization of national welfare. The primary goal of trade defense policy, on the other hand, is to assist domestic producers in recovering from the injury caused by imports. In other words, whereas the focus of competition policy is on preserving competition rather than protecting competitors, the main purpose of trade remedies is protecting domestic competitors. The latter often generates negative effects on competition. The chapter looks at the origin of such inconsistency in objectives, which could be found in both World Trade Organization (WTO) and Ukrainian law, and argues that both policies can nevertheless be complementary. To reconcile the conflicting objectives, it is proposed to introduce competition considerations into the trade defense policy of Ukraine by strengthening one of the elements of trade remedy investigations, namely the public interest requirement.
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Notes
- 1.
Marrakesh Agreement Establishing the World Trade Organization 1994, No. 31874.
- 2.
General Agreement on Tariffs and Trade 1947, 61 Stat. A-11, 55 UNTS 194 (GATT), art II.
- 3.
John Howard Jackson et al., Legal Problems of International Economic Relations: Cases, Materials and Text on the National and International Regulation of Transnational Economic Relations (West Academic 6th ed. 2013) 831; see also Peter Van der Bossche and Werner Zdouc, The Law and Policy of the World Trade Organization: Texts, Cases and Materials (Cambridge University Press 4th ed. 2017) 1625.
- 4.
Marrakesh Agreement Establishing the World Trade Organization 1994, No. 31874, annex 1A Preamble for the Agreement on Safeguards.
- 5.
Mitsuo Matsushita et al., The World Trade Organization: Law, Practice, and Policy (Oxford University Press 2nd ed. 2006) 438–439; Simon Lester et al., World Trade Law: Text, Materials and Commentary (Hart Publishing 2nd ed. 2012) 537.
- 6.
John Howard Jackson, The World Trading System: Law and Policy of International Economic Relations (MIT Press 2nd ed. 1997) 256.
- 7.
Kenneth Dum, The GATT: Law and Economic Organization (University of Chicago Press 1970) 177.
- 8.
Ibid 174.
- 9.
Robert O’Brien, Subsidy Regulation and State Transformation in North America, the GATT and the EU (Palgrave Macmillan 1997) 107 (noting that “[t]hey successfully argued that since their law predated the GATT and did not contain an injury measure, the GATT provisions were not applicable”).
- 10.
Protocol of the Provisional Application of the 1947 GATT (U.N.T.S. 308, BISD IV/77, TIAS 1700) (Part II of the GATT applied only “to the fullest extent not inconsistent with existing legislation”).
- 11.
Contracting Parties to the General Agreement on Tariffs and Trade, ‘On Antidumping and Countervailing Duties’ (Second Report of the Group of Experts) L/1141, 1960, para 32. See also John James Barceló III, ‘A History of GATT Unfair Trade Remedy Law: Confusion of Purposes’ (1991) 517 Cornell Law Faculty Publications 311 (324) (“GATT’s failure to link countervailing duties to the direct regulation of subsidies in Article XVI compounds the unboundedness of the Article VI language”).
- 12.
Ukraine became a WTO Member on 16 May 2008. See Ukrainian Law on Ratification of the Protocol on Accession of Ukraine to the World Trade Organization 2008, 250-VI.
- 13.
Ukrainian Law on Protection of National Producer against Dumped Imports 1999, 330-XIV, arts 7–10; World Trade Organization Agreement on Implementation of art VI of the General Agreement on Tariffs and Trade 1994 (Anti-Dumping Agreement), 1868 U.N.T.S. 201, arts 2, 3; General Agreement on Tariffs and Trade 1994 (GATT 1994), 1867 U.N.T.S. 187, art VI:6(a) (“[n]o contracting party shall levy any anti-dumping […] duty on the importation of any product of the territory of another contracting party unless it determines that the effect of the dumping […], as the case may be, is such as to cause or threaten material injury to an established domestic industry, or is such as to retard materially the establishment of a domestic industry”).
- 14.
Similarly, according to art 2(1) Anti-Dumping Agreement the product is “dumped, i.e. introduced into the commerce of another country at less than its normal value, if the export price of the product exported from one country to another is less than the comparable price, in the ordinary course of trade, for the like product when destined for consumption in the exporting country”.
- 15.
World Trade Organization, Anti-Dumping Agreement (n 13) arts 7, 8, 9.
- 16.
Ukrainian Law on Protection of National Producer against Dumped Imports 1999, 330-XIV, art 18(1).
- 17.
Ibid art 18(2).
- 18.
Ukrainian Law on Protection of National Producer Against Subsidized Imports 1999, 331-XIV, arts 6–14; World Trade Organization Agreement on Subsidies and Countervailing Measures (SCM Agreement) 1869 U.N.T.S. 14, arts 1, 2, 15; General Agreement on Tariffs and Trade 1994 (GATT 1994), 1867 U.N.T.S. 187, art VI:6(a) (“[N]o contracting party shall levy any […] countervailing duty on the importation of any product of the territory of another contracting party unless it determines that the effect of the […] subsidization, as the case may be, is such as to cause or threaten material injury to an established domestic industry, or is such as to retard materially the establishment of a domestic industry”).
- 19.
Ukrainian Law on Application of Safeguard Measures against Imports to Ukraine 1999, 332-XIV, arts 10(3) and 16(1); World Trade Organization Agreement on Safeguard 1869 U.N.T.S. 154, art 2(1); General Agreement on Tariffs and Trade 1994 (GATT 1994), 1867 U.N.T.S. 187, art XIX:1(a) (“[i]f, as a result of unforeseen developments and of the effect of the obligations incurred by a contracting party under this Agreement, including tariff concessions, any product is being imported into the territory of that contracting party in such increased quantities and under such conditions as to cause or threaten serious injury to domestic producers in that territory of like or directly competitive products, the contracting party shall be free, in respect of such product, and to the extent and for such time as may be necessary to prevent or remedy such injury, to suspend the obligation in whole or in part or to withdraw or modify the concession”).
- 20.
See eg Marco Bronckers, ‘Private Remedies Against Foreign Subsidization: A European View’ in Jacques Bourgeois (ed), Subsidies and International Trade: A European Lawyers’ Perspective (Kluwer Law International 1991) 187 (192); Sungjoon Cho, ‘Anticompetitive Trade Remedies: How Antidumping Measures Obstruct Market Competition’ (2009) 87 North Carolina Law Review 357 (360) (arguing that “[w]hile internal competition is highly protected in the domestic market, external competition from foreign producers has been largely neglected and, thus, has avoided antitrust scrutiny. In fact, the government, through its trade policies, often hampers foreign competition, protecting domestic producers at the expense of all the benefits that foreign competition might bring to the economy”).
- 21.
See the list of all current trade remedy measures at the official website of the Department of Foreign Economic Activity and Trade Defense at the Ministry of Economy of Ukraine https://td.me.gov.ua/en/zaxodyzovn/ accessed 19 January 2022.
- 22.
Interdepartmental Commission of International Trade, Notice on Initiating and Conducting a Safeguard Investigation on Imports of Some Nitrogen Fertilizers to Ukraine Regardless of a Country of Origin and Export, No. CП-425/2019/4411–03, 21 August 2019.
- 23.
‘Ukraine’s Economy May Lose up to $238 Million from the Introduction of Quotas on Imports of Mineral Fertilizers’ Kyiv School of Economics https://kse.ua/ua/about-the-school/news/ekonomika-ukrayini-mozhe-vtratiti-do-238-mln-dol-ssha-vid-zaprovadzhennya-kvot-na-import-mineralnih-dobriv/ accessed 19 January 2022; See also Natalia Datskevych, ‘Dangerous Quotas: Limiting Fertilizer Imports Might Kill Competition, Benefit Oligarchs’ Kyiv Post (11 July 2020) https://www.kyivpost.com/business/dangerous-quotas-limiting-fertilizer-imports-might-kill-competition-benefit-oligarchs.html accessed 19 January 2022.
- 24.
Ibid.
- 25.
Interdepartmental Commission of International Trade, Notice on Application of Definitive Anti-dumping Measures on Imports of Cement from the Russian Federation, the Republic of Belarus and the Republic of Moldova to Ukraine, 28 May 2019.
- 26.
Decree of the Cabinet of Ministers of Ukraine on a Ban on Imports into the Customs Territory of Ukraine of the Goods Originating from the Russian Federation, 30 December 2015, No. 1147.
- 27.
Antimonopoly Committee of Ukraine, Recommendation to Domestic Cement Producers Not to Raise Prices, 13 April 2021.
- 28.
Interdepartmental Commission of International Trade, Notice on Initiating and Conducting an Antidumping Investigation on Imports of Cement Originated from the Republic of Turkey to Ukraine, AД-463/2020/4411–03, 2 September 2020.
- 29.
Antimonopoly Committee of Ukraine, Recommendation to Domestic Cement Producers Not to Raise Prices, 13 April 2021 (n 27).
- 30.
Ibid.
- 31.
Interdepartmental Commission of International Trade, Notice on Application of Definitive Anti-dumping Measures (n 25).
- 32.
Matsushita et al. (n 5) 335; Lester et al. (n 5) 477–478.
- 33.
Michael Cartland et al., ‘Is Something Going Wrong in the WTO Dispute Settlement?’ (2012) 46 Journal of World Trade: Law, Economic Policy, Public Policy 979 (992).
- 34.
Se e.g. John Howard Jackson, World Trade and the Law of GATT (Bobbs-Merrill Co. 1969), Chap. 16.
- 35.
Alan Sykes and Richard Cooper, ‘Antidumping and Antitrust: What Problems Does Each Address?’ in Robert Zachary Lawrence (ed), Brookings Trade Forum (Brookings Institution Press 1998) 1 (25–27) (arguing that “the injury test was crafted to permit duties in any case of actual or threatened “injury” to an industry and was in no way limited to circumstances in which foreign competitors were in a position to extinguish domestic competition and acquire monopoly power”); see also Luka Rubini, The Definition of Subsidy and State Aid: WTO and EC Law in Comparative Perspective (Oxford University Press 2009) 382–385; Gene Grossman and Petros Mavroidis, ‘Here Today, Gone Tomorrow? Privatization and the Injury Caused by Non-Recurring Subsidies’ in Henrik Horn and Petros Mavroidis (eds), The WTO Case Law of 2001 (Cambridge University Press 2003) 170 (180–186); Sungjoon Cho (n 20) 357 (370–371).
- 36.
Joseph Stiglitz, ‘Dumping on Free Trade: The U.S. Import Trade Laws’ (1997) 64(2) Southern Economic Journal 402 (418).
- 37.
Of 33 trade remedy measures which are currently in force in Ukraine, 29 are anti-dumping measures https://td.me.gov.ua/en/zaxodyzovn/ accessed 19 January 2022.
- 38.
For more historical context see Alan Sykes and Richard Cooper, ‘Antidumping and Antitrust: What Problems Does Each Address?’ in Lawrence (n 35) 1 (17–18); Sungjoon Cho (n 20) 357 (364–367); Chad Bown and Rachel McCulloch, ‘Antidumping and Market Competition: Implications for Emerging Economies’, 2015 European University Institute Working Papers 1 (2–4).
- 39.
The World Bank, ‘The Origin and Evolution of Antidumping Regulation’, (Working Papers) WPS 783, 1991, 1 (24–25).
- 40.
Jacques Bourgeois and Patrick Messerlin, ‘The European Community’s Experience’ in Robert Zachary Lawrence (ed), Brookings Trade Forum (Brookings Institution Press 1998) 127 (133–144).
- 41.
Hyun Ja Shin, ‘Possible Instances of Predatory Pricing in Recent U.S. Antidumping Cases’ in Robert Zachary Lawrence (ed), Brookings Trade Forum (Brookings Institution Press 1998) 81 (87–94).
- 42.
Matsushita et al. (n 5) 396–399.
- 43.
Dum (n 7) 168.
- 44.
Tariff Act 1897, (Dingley Tariff) ch. 11, § 5, 30 stat 151, 205.
- 45.
David Palmeter and Stanimir Alexandrov, ‘Inducing Compliance in WTO Dispute Settlement’ in Daniel Kennedy and James Southwick (eds), The Political Economy of International Trade Law: Essays in Honor of Robert E. Hudec (Cambridge University Press 2002) 646 (646–647).
- 46.
John James Barceló III, ‘The Antidumping Law: Repeal It or Revise It’ (1979) Michigan Journal of International Law 53 (54–57); Bernard Hoekman and Petros Mavroidis, ‘Dumping, Antidumping and Antitrust’ (1996) 30(1) Journal of World Trade 27; Alan Sykes, ‘Countervailing Duty Law: An Economic Perspective’ (1989) 89 Columbia Law Review 199 (199–263).
- 47.
Paragraph 20 of the Singapore Ministerial Declaration established a Working Group on Trade and Competition Policy.
- 48.
See e.g. Martyn Taylor, International Competition Law: A New Dimension for the WTO? (Cambridge University Press 2006) 177.
- 49.
Special Import Measures Act R.S.C., 1985 c. S-15, art 45.1.
- 50.
Provisions with the exact same language can be also found in art 35(1) Law on CVD and art 17(1) Law on Safeguards.
- 51.
Interdepartmental Commission of International Trade, Notice on Application of Safeguard Measures on Imports of Cable to Ukraine Regardless of a Country of Origin and Export, 23 April 2021.
- 52.
Interdepartmental Commission of International Trade, Notice on Review of the Decision of Commission on Application of Safeguard Measures on Imports of Cable to Ukraine Regardless of a Country of Origin and Export, 24 September 2021.
- 53.
Ministry and Committee of Digital Transformation of Ukraine, Imposition of Duties on Imports of Cable May Result in Increasing Costs for Internet Connection for Ukrainians, 27 April 2021.
- 54.
Interdepartmental Commission of International Trade, Notice on Reversal of the Decision of Commission on Application of Safeguard Measures on Imports of Cable to Ukraine Regardless of a Country of Origin and Export, 11 October 2021.
- 55.
WPS 783 (n 39), 1 (23); Simone Maciel Cuiabano, ‘When Anti-dumping Meets Antitrust: Brazil’s Innovative Experience Analyzing Public Interest in Commercial Defense Investigations’ (2020) 21 Journal of International Law and Trade Policy 41 (45–49).
- 56.
Draft Law on Protection Against Dumped Imports 2020.
- 57.
Draft Law on Protection Against Subsidized Imports 2020.
- 58.
Draft Law on Safeguards 2020.
- 59.
Draft Law on Protection Against Dumped Imports 2020, art 23(1), Draft Law on Protection Against Subsidized Imports 2020, art 18(1), Draft Law on Safeguards 2020, art 12(1).
- 60.
Anzhela Makhinova, ‘Export Markets are Closing, so Ukrainian Companies Must be Ready to Defend Their Place under the Sun’ Yurydychna Hazeta (26 August 2020) https://yur-gazeta.com/interview/eksportni-rinki-zakrivayutsya-tomu-ukrayinski-kompaniyi-mayut-buti-gotovi-vidstoyuvati-svoe-misce-pi.html accessed 1 June 2022.
- 61.
World Trade Organization, ‘United States – Definitive Safeguard Measures on Imports of Certain Steel Products’ (Dispute Settlement Report) DS248(2003) para 273, 289–291.
- 62.
Anzhela Makhinova, ‘Trade Defense Remedies: The Most Frequently Used Protectionist Measures of 2020’ (11 August 2021) https://sk.ua/publications/trade-defense-remedies-the-most-frequently-used-protectionist-measures-of-2020/ accessed 1 June 2022.
- 63.
World Trade Organization, ‘Ukraine – Definitive Safeguard Measures on Certain Passenger Cars’ (Panel Report) WT/DS468/R, 2015, para 7.36 (it is important to note, however, that the panel made this conclusion for the purpose of establishing which documents comprise the competent authorities’ “published report” within the meaning of art 3(1) only. Exercising judicial economy, the panel decided against making a finding regarding whether Ukraine acted inconsistently with art 3(1) by failing to provide a reasoned and adequate explanation as to how the facts support the findings).
- 64.
World Trade Organization, ‘European Union – Anti-Dumping Measures on Certain Footwear from China’, (Panel Report) WT/DS405/R, 2012, para 7.844.
- 65.
World Trade Organization, ‘China – Countervailing and Anti-Dumping Duties on Grain Oriented Flatt-Rolled Electrical Steel from the United States’ (Appellate Body Report) WT/DS414/AB/R, 2012, paras 256–257.
- 66.
Oleksiy Pustovit, ‘Tariffs Behind the Shadow: What is Wrong with Trade Defense in Ukraine’ Ekonomichna Pravda (8 October 2021) https://www.epravda.com.ua/columns/2021/10/8/678549/ accessed 1 June 2022.
- 67.
World Trade Organization, ‘Ukraine – Definitive Safeguard Measures on Certain Passenger Cars’ (n 63) para 6.11.
- 68.
Official website of the Department of Foreign Economic Activity and Trade Defense at the Ministry of Economy of Ukraine https://td.me.gov.ua/ accessed 1 February 2022.
References
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Opeida, Z. (2023). Competition and International Trade: Complementing Trade Defense Policy with Effective Competition Policy in Ukraine. In: Richter, H. (eds) Competition and Intellectual Property Law in Ukraine. MPI Studies on Intellectual Property and Competition Law, vol 31. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-662-66101-7_3
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