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This chapter outlines the history of trade remedies in New Zealand, and summarises the procedures involved in trade remedy actions. It deals separately with anti-dumping, countervailing duties, and safeguards.

Anti-Dumping Law and Practice in New Zealand

History

New Zealand was one of the first countries to adopt anti-dumping legislation. In 1905 domestic and British manufacturers of agricultural implements complained about the efforts of an American harvester trust to monopolise the New Zealand market by systematic price-cutting to New Zealand purchasers. As a result, the Agricultural Implement Manufacture, Importation and Sale Act was passed, which made provision for a special duty to be applied to the unfairly traded imports. This Act continued in effect until 1915.

The first full anti-dumping legislation appeared as section 11 of the Customs Amendment Act of 1921. This Act gave the Minister of Customs the power to impose anti-dumping duties, with only a limited requirement to carry out any sort of injury test.

This law remained in force until 1965, when the Customs Amendment Act 1965 broadened the scope of the "prejudice or injury" requirement. The Customs Amendment Act 1971 extended the number of circumstances under which duties could be applied.

In 1983 a review of the legislation was carried out. By this time, New Zealand was a signatory to the GATT Subsidies Code, but not to the GATT Anti-Dumping Code, and the revised law, which became Part Va of the Customs Act, was more closely aligned to the Codes.

The economic reforms initiated in New Zealand in 1984 saw the progressive removal of import licensing by 1992 and the phased reduction of tariffs. In 1986 the decision was made to join the GATT Anti-Dumping Code, and a full review of New Zealand's trade remedy legislation was carried out. The result was anti-dumping legislation which conformed fully with the Code.

In 1988 the responsibility for the administration of the legislation was transferred from the Customs Department to the newly-established Ministry of Commerce, and the legislation was enacted as the separate Dumping and Countervailing Duties Act 1988.

In 1990, anti-dumping action was removed from trans-Tasman trade, on the grounds that with the removal of restrictions on trade in goods, and with the application of competition law to relevant anti-competitive conduct, commerce between the two countries had taken on more of the characteristics of domestic trade, and anti-dumping measures would be inappropriate. Up to that point, most of the anti-dumping actions taken against Australia or New Zealand had been initiated by the other country.

In 1994, the Dumping and Countervailing Duties Act was further amended to take into account the WTO Agreement on Implementation of Article VI of GATT 1994 (the AD Agreement).

Anti-Dumping Actions

Since 1982, New Zealand has initiated 76 anti-dumping investigations, calculated on the basis of one country by one product. The following tables provide information on these investigations.

* "Terminated" means that the investigation did not proceed to a final determination, generally on the grounds that the investigation failed to establish either or both of dumping and injury.

The figures also indicate that over the period since 1982, around 40 percent of investigations were terminated without a remedy being provided. Of the 56 investigations initiated since the Ministry of Commerce took over administration of the legislation, 22 have been terminated. The reasons for these terminations include findings of no injury in fourteen cases, no dumping in five cases, negligible imports in two cases, and no like product in one case.

In the period up to 1990, investigations involving Australian goods dominated, with 10 of the 26 investigations initiated, and six of the ten anti-dumping duties imposed. Increased activity involving Asian countries in recent years reflects the increasing share of New Zealand’s import trade held by these countries, which in turn is indicative of the removal of import licensing and the lowering of tariff protection, as well as the shift in world production and trade patterns.

* Investigations in progress (January 1998): China - 2, EU (Greece) - 1, Thailand - 1, Indonesia - 1.

As at 31 December 1997, anti-dumping duties applied in 27 cases to:

• Hog Bristle Paint Brushes from China.
• Refined Sugar from Belgium, Denmark, Germany, Malaysia, the Netherlands and Thailand.
• Plasterboard from Thailand (three products).
• Lead Acid Batteries from Indonesia, Korea, Malaysia, Singapore and Taiwan.
• Certain Non-Leather Women's Footwear from China.
• Certain Men's Footwear from China, Indonesia and Thailand.
• Automotive Oil Filters from the USA.
• Sweetened Condensed Milk from Thailand.
• Abrasive Discs and Wheels from Korea and Taiwan.
• G-Clamps from the United Kingdom.
• Canned peaches from South Africa
• Canned apricots from South Africa

Anti-Dumping Practice in New Zealand

The Dumping and Countervailing Duties Act 1988 (the Act) is administered by the Trade Remedies Group of the Ministry of Commerce. The powers and responsibilities of the Secretary of Commerce, as set out in the Act, have been delegated to the Manager of the Trade Remedies Group.

Applications

An anti-dumping investigation is based on an application lodged with the Trade Remedies Group. The application must include the information required by section 10(2) of the Act, which reflects the provisions of Article 5.2 of the AD Agreement. This information includes details of the New Zealand industry, information on imports of the allegedly dumped goods and the exporters and importers involved, price information on normal values and export prices, and the injurious effects of the allegedly dumped goods.

When an application is received by the Trade Remedies Group it is immediately checked to ensure it is a properly documented application. The industry is advised within 5 days of the Ministry's receipt of the application whether it does meet these requirements, and the government of the exporting country is notified.

The evidence in the application is checked to establish if there is sufficient evidence to justify initiation of an investigation, and also to determine the standing of the applicant. This requires that the Trade Remedies Group be satisfied that the application is made by or on behalf of the industry, and has the level of support required, as set out in section 10(3) of the Act, which reflects Article 5.4 of the AD Agreement. During this checking the applicant may be asked to clarify the information provided, and the Trade Remedies Group may also take into account other information available to it in order to check the accuracy and adequacy of the information provided.

If the Trade Remedies Group is satisfied that there is sufficient evidence to initiate an investigation, the decision is notified in the New Zealand Gazette, and to the applicant industry, as well as to the representative of the country of export and to known exporters and importers.

Investigations

The full investigation involves thorough checking of the evidence in the application document, and extensive gathering of industry and trade data to establish whether dumping is causing injury. The investigation of both dumping and injury is carried out by the Trade Remedies Group.

Investigations are carried out through questionnaires to exporters, importers and the domestic industry, supported by on-site verification visits to check the information provided. Verification Reports are provided to the parties visited, as required by Article 6.7 of the AD Agreement.

Information that is considered to be confidential will not be released to other parties, but otherwise the Trade Remedies Group places all information on a Public File, including non-confidential summaries of confidential information.

If information requested is not received or not received in a timely fashion or to the extent required, then the Trade Remedies Group can rely on the facts available, subject to the provisions of Article 6.8 and Annex II of the AD Agreement. Information considered unreliable can be disregarded.

The Minister of Commerce must make a final determination within 180 days of the initiation of an investigation. Disclosure of the essential facts and conclusions likely to form the basis for the final determination must be made within 150 days of initiation.

An investigation must be terminated where there is insufficient evidence of dumping or injury, or where the domestic industry has withdrawn its application, or the application no longer has the required degree of support from the domestic industry. Evidence of dumping is insufficient if the margin of dumping is less than 2 percent, or where the volume of imports of dumped goods is negligible, having regard to New Zealand’s obligations under the AD Agreement.

Dumping

Dumping means the situation where the export price of goods imported into New Zealand is less than the normal value of the goods in the country of export.

The investigation of dumping requires the establishment of export prices and normal values, and the evaluation of any adjustments required to ensure a fair comparison between the two.

Normally, the Trade Remedies Group bases its investigation of dumping on actual imports over the most recent twelve month period for which information is available, and which can be related to information on injury to the industry. Actual data is used where it is made available.

Where possible, the dumping investigation is based on a transaction-to-transaction comparison of transactions made at the same time. Where there are large numbers of exporters, a sampling process is used, normally by using a list in descending order of exporters responsible for up to 60 percent of exports.

Export prices are calculated by adjusting transaction prices to the ex-factory equivalent to take account of costs, charges and expenses which are additional to those generally incurred on sales in the domestic market, and for any costs, charges and expenses resulting from the exportation of the goods or arising after their shipment from the country of export.

Where the export transaction was not at arm’s length, a constructed export price may be established by taking the first arm’s length transaction in New Zealand and deducting any duties or taxes, costs or charges arising after exportation, and an amount for profit.

Normal values are usually based on arm’s length sales in the market of the exporting country by the exporter concerned. If the exporter does not sell on the domestic market then prices of other sellers are used. Where there are no relevant sales of the like goods on the domestic market, or where the situation in the relevant market is such that any sales are not suitable for use in determining normal values, then a constructed value or a third country price can be used.

Constructed values include the cost of production, plus reasonable amounts for administrative and selling costs and other charges, and an amount for profit, having regard to the rate of profit normally realised on sales of goods of the same general category in the domestic market of the country of export.

Prices to third countries have not normally been used by New Zealand because of the difficulties involved in determining whether or not such prices are also dumped, i.e. to do so effectively requires the construction of a value.

New Zealand has removed from its legislation specific provisions relating to establishing normal values in non-market economies. In the light of developments in recent years, it was considered that it would be difficult to meet the conditions referred to in the Interpretative Note 2 to paragraph 1 of Article VI of GATT 1994. Accordingly, the standard provisions of the Act are used on a case-by-case basis, taking into account the extent to which prices or factor costs might not be based on market considerations, and therefore might not be suitable for use in determining normal values. In some situations, information regarding prices or cost elements in surrogate countries might still be used where exports from a non-market economy are being investigated, but it is expected that such situations will be the exception rather than the rule.

In order to ensure that there is a fair comparison between export prices and normal values, they are compared at the same level of trade, normally at the ex-factory level, in respect of sales made at as nearly as possible the same time, with due allowances made as appropriate for any differences in terms and conditions of sales, levels of trade, taxation, quantities, and physical characteristics, and for any other differences that affect price comparability.

In considering differences in indirect expenses, such as some advertising costs, the Trade Remedies Group does not normally make adjustments, since it considers that such expenses are incurred irrespective of whether a particular sale or group of sales is made, and therefore any difference does not affect the price. Where adjustments can be made is in respect of promotional activities where it is clearly demonstrated that the costs involved were related to specific sales and affect the price of the transaction, since it could be considered that such costs are directly related to the price paid by the buyer, and were a factor of which the buyer was aware. Fixed expenses are generally not considered to bear a direct relationship to the sales under consideration. No adjustment for differences in profit is made.

The comparison between export prices and normal values on a transaction-to-transaction basis establishes the extent of dumping, and identifies the shipments which are dumped. The consideration of injury is consequently based on the volume and extent of dumping so determined. Non-dumped imports are not averaged with dumped imports.

Injury

Material injury must be caused by reason of the dumping of goods. Section 8 of the Act requires an examination of the volume of dumped goods, their effect on prices in the New Zealand market for like goods, and the consequent impact of the dumped goods on the relevant New Zealand industry.

The Act goes on to set out a number of factors and indices which the Trade Remedies Group shall have regard to, although noting that this is without limitation as to the matters the Trade Remedies Group may consider. These factors and indices include:

• The extent to which there has been or is likely to be a significant increase in the volume of dumped goods, either in absolute terms or relative to production or consumption;
• The extent to which the prices of dumped goods represent significant price undercutting in relation to prices in New Zealand;
• The extent to which the effect of the dumped goods is or is likely significantly to depress prices for like goods of New Zealand producers or significantly to prevent price increases for those goods that otherwise would have occurred;
• The economic impact of the dumped goods on the industry, including actual or potential decline in output, sales, market share, profits, productivity, return on investments, and utilisation of production capacity; the margin of dumping; factors affecting domestic prices; and actual and potential effects on cash flow, inventories, employment, wages, growth, ability to raise capital, and investment.

In addition, the Trade Remedies Group must have regard to factors other than dumping which may be injuring the industry, since injury caused by these other factors must not be attributed to the dumped imports. Factors which may be relevant in this respect include, inter alia, the volumes and prices of non-dumped imports of the product in question, contraction in demand or changes in the patterns of consumption, trade restrictive practices of and competition between the foreign and domestic producers, developments in technology, the export performance and productivity of the domestic industry, and the nature and extent of importations of the dumped goods by New Zealand producers.

An investigation could establish that there may be both volume and price effects, but an analysis of the consequent impact on the industry could lead to the conclusion that the industry is not suffering material injury, particularly if important indices of that impact, such as output, sales, and profits, are not showing any actual decline. A determination of whether or not there is material injury caused by dumping is based on consideration of all of the factors involved, including an evaluation of the industry’s position but for the dumping, and an assessment of the extent to which the totality of the evidence leads to the conclusion that a domestic industry is being materially injured by the dumped goods. The existence of a decline in one or several of the injury factors or indices does not require a determination that material injury is being caused by the dumped imports, if the totality of the evidence does not support such a conclusion.

It is important to note that each investigation must be approached on the basis of the facts pertaining to that particular case. An approach which may be relevant in one case will not necessarily be appropriate in another case.

Consideration of volume effects is limited to imports found to be dumped, and is based on the extent to which dumped imports have increased, in both absolute and relative terms.

In considering price undercutting, the Ministry will normally seek to compare prices at the ex factory and importer’s store levels, to ensure that differences in distribution costs and margins do not confuse the impact of dumping. Accordingly, the Ministry’s position is generally to compare importers’ prices, including relevant selling and administration costs, which involve similar cost elements to those in the New Zealand manufacturer’s ex-factory price, but not including cost elements relating to the distribution of goods.

Price depression exists when the industry’s prices are lower than the level of the previous period. Price suppression occurs when dumping prevents price increases that would otherwise take place. The Trade Remedies Group has generally based its assessment of price suppression on positive evidence, in particular the extent to which cost increases have not been recovered in prices. Cost increases not recovered in prices will be reflected in declines in gross profit expressed as a percentage of sales. Where cost savings have been made, the lack of any price increase will not normally be regarded as price suppression. While the inability to recover cost increases is the main indicator of price suppression, the Trade Remedies Group will consider any other factors raised as positive evidence of price suppression.

The main injury factors for assessing economic impact include declines in output and sales, market share and profits, but the other factors identified in the Act and in the AD Agreement are also taken into account.

Injury is assessed on the basis of the impact of dumped goods on the domestic industry. The source of the dumped goods will not necessarily affect this impact. Accordingly, the injurious effect of dumped goods from a variety of suppliers in a variety of countries can be considered cumulatively. The Trade Remedies Group carries out this consideration in accordance with Article 3.3 of the AD Agreement, and on the basis of the injury effects identified above, i.e. volume and price effects and the consequent economic impact.

The Trade Remedies Group considers threat of injury on the basis set out in Article 3.7 of the AD Agreement, which requires consideration of factors such as the rate of increase of dumped goods, the capacity of the exporter to increase dumped exports, the prices of imports, and inventories of the product being investigated. The change in circumstances which would create a situation in which dumping would cause injury must be clearly foreseen and imminent.

Actions

If there is reasonable evidence of injury from dumping, provisional measures can be imposed by the Minister after 60 days from the date an investigation was started. Provisional measures will be applied only if they are necessary to prevent further injury from occurring during the remaining period of the investigation.

Anti-dumping duties may not exceed the margin of dumping, and are applied as ad valorem rates, specific amounts, or under a price mechanism which sets a price level below which anti-dumping duties are payable. New Zealand also operates a lesser duty rule, by which the Minister is required to have regard to the desirability of ensuring that the amount of anti-dumping duty is not greater than is necessary to remedy the material injury. Anti-dumping duties will normally be set for each exporter concerned, although in some cases the duty may be applicable to the supplying country as a whole.

Undertakings may be entered into by which the exporter agrees to so conduct future export trade to New Zealand to avoid causing or threatening material injury. If an undertaking is accepted, the investigation of the extent of injury may be completed, while amendments to undertakings because of altered circumstances can be accepted.

In certain circumstances, as set out in Article 10 of the AD Agreement, retrospective measures can be applied.

There is provision in the New Zealand legislation for third country dumping actions to be taken, subject to the conditions set out in Article 14 of the AD Agreement.

Where an anti-dumping duty on a product is in place, that duty can be applied to all imports of the goods in question from the country or countries investigated. Where there may be efforts to circumvent the purpose of the duty through changes in the product or in the supplying country, the anti-dumping duties may be applied only if the product remains a like product to the original product and if there is no change of origin of the supplying country. In all other cases a new investigation would be required.

Reviews and Reassessments

Anti-dumping duties cease to be payable after five years from the date of the final determination, unless the goods are subject to a review.

A review may be initiated on the initiative of the Trade Remedies Group or on request from an interested party. In accordance with Article 11.2 of the AD Agreement, the purpose of a review is to determine whether the injury would be likely to recur if the duty were removed or varied.

A reassessment of the duty may be carried out on the initiative of the Trade Remedies Group or on request, or following the completion of a review, and the Minister may determine a new rate or amount of duty. Where a reassessment results in a lower duty being imposed a refund can be made. A reassessment permits the adjustment of duties in order to ensure that they do not exceed the margin of dumping, and also permits separate duties to be established for new exporters or exporters not investigated.

Parties to an investigation can seek judicial review of decisions made by the Minister and by the Trade Remedies Group, through application to the High Court.

Countervailing Duty Law and Practice in New Zealand

History

New Zealand’s countervailing duty law has generally followed the same track as anti-dumping law, and the Dumping and Countervailing Duties Act 1988 and its predecessors applied to subsidised goods. There are some differences, for example, countervailing duty action can still be taken on trans-Tasman trade. It is also noteworthy that New Zealand joined the GATT Subsidies Code several years before joining the Anti-Dumping Code, reflecting its concerns over subsidisation per se rather than with the response of countervailing duties.

In 1994, the Dumping and Countervailing Duties Act was further amended to take into account the WTO Agreement on Subsidies and Countervailing Measures (the SCM Agreement).

Countervailing Duty Actions

New Zealand has conducted few countervailing duty investigations, as shown by the table below. This reflects international experience, since apart from the United States few other countries have any significant number of countervailing duties in force. During the period 1982-1998 six actions have been taken, one involving acceptance of an undertaking.

The goods involved in investigations have been limited to transport equipment and foodstuffs. In two cases involving tugs and catamarans, the action related to the purchase of a piece of capital equipment.

The table below shows that Australia and EU countries have been the main targets of investigations.

As at 31 December 1997, countervailing duties applied to canned spaghetti from Italy, canned peaches from the EU, while there is an undertaking on alloy wheels from Australia.

Countervailing Duty Practice in New Zealand

The provisions of the Dumping and Countervailing Duties Act relating to processes and injury apply equally to dumping and subsidy investigations, with some additional notification and consultation requirements in subsidy cases, as required by Article 13 of the WTO SCM Agreement.

Definitions

The 1994 amendments to the Act introduced a number of new or revised definitions relating to subsidies. These included definitions of "foreign government", which includes sub-national authorities as well as bodies exercising authority for an association of foreign countries; and "specific subsidy", which reflects the definition found in Article 2 of the SCM Agreement.

Subsidies

The determination of whether there is a subsidy and the amount of the subsidy is made on the basis of the SCM Agreement and section 7 of the Act. Information is required on the existence, amount and nature of the subsidy. This information permits the Ministry to identify the subsidy programme concerned, to determine if there is a financial contribution by a government, and to gauge the extent to which it provides a benefit to the exported product.

In investigating subsidies, information is sought from the government concerned as well as from exporters.

Actions

Countervailing duties may not exceed the amount of subsidy on the goods, and as in the case of dumping a lesser duty rule applies, the Minister is required to have regard to the desirability of ensuring that the amount of countervailing duty is not greater than is necessary to remedy the material injury.

In applying a countervailing duty, the Minister must ensure that the products concerned are not subject to both anti-dumping and countervailing duties to compensate for the same situation of dumping or export subsidisation (Article VI:4 of GATT 1994). The New Zealand Court of Appeal has interpreted this to mean that no anti-dumping duty can be applied to deal with a situation of export subsidisation, which means that the price differentiation impact of an export subsidy must not be attributed to dumping when considering injury in a dumping case, and vice versa.

The SCM Agreement sets out the conditions under which certain subsidies are non-actionable. In addition to non-specific subsidies, certain subsidies relating to regional development, research and development and adaptation to environmental regulations, are non-actionable when the conditions laid down in the SCM Agreement are met. The Act does not reiterate these conditions, but section 14(3) provides that no countervailing duty may be imposed if to do so would be inconsistent with New Zealand’s obligations as a party to the WTO Agreement. This provision would also apply in cases where certain agricultural subsidies are non-actionable under the WTO Agreement on Agriculture.

Provisions for termination are similar to those for anti-dumping, but with the addition of the requirement in section 11(1)(c) that there should be termination where the imposition of a countervailing duty would be inconsistent with New Zealand’s obligations as a party to the WTO Agreement, and the requirements of section 11(2)(c) relating to negligible imports. This covers the situation where termination is required under the Agreement if the amount of subsidy is less than one percent of the value of the goods, or less than two percent for goods from developing countries, or less than three percent for goods from least-developed countries.

Safeguard Law and Practice in New Zealand

History

Prior to the passage of the Temporary Safeguard Authorities Act in 1987, safeguard action was taken under the Industries Development Commission Act 1961, and more specifically, by the Emergency Protection Authority (EPA), established under that Act.

If a domestic industry considered that it was suffering damage from an increase in imports it could put a case for the restriction or other restraint on imports to the EPA. If the EPA decided that emergency action was appropriate, there was an automatic reference to the Industries Development Commission (IDC), which would then make recommendations on appropriate longer term industry assistance measures.

In light of the completion of industry-specific development plans, the removal of import licensing and the reduction of normal tariff levels, which largely removed the role of the IDC, it was not considered necessary to maintain it. The Temporary Safeguard Authorities established under the Temporary Safeguard Authorities Act were intended in many respects to operate in much the same way as the EPA, but with additional definitions of industry, like goods, and injury, which were closely aligned with the GATT Anti-Dumping Code. In addition, if the Minister decided to take action as a result of TSA recommendations, this decision would be final and would not be referred to the IDC after 12 months.

Following the negotiation of an Agreement on Safeguards (SG Agreement) in the Uruguay Round, it became necessary to amend the Temporary Safeguard Authorities Act to reflect the obligations of the new Agreement. In particular, it was necessary to reflect the SG Agreement requirements for "serious injury" and to permit safeguard action on behalf of industries producing "like or directly competitive goods". Also, the Act was amended to ensure that the SG Agreement requirements regarding the duration and conditions of any safeguard action were met.

It should be noted that, unlike anti-dumping and countervailing duties which are imposed on individual exporters or countries, safeguard action can normally be taken only on an MFN basis, and deals with the consequences of increased imports, not their cause.

Safeguard Actions

Since the passage of the Temporary Safeguard Authorities Act in 1987, only four applications for such action have been referred to a TSA. Two other applications, one for safeguard action under SPARTECA, were declined or withdrawn. The inquiries undertaken by a TSA have included footwear, in 1989, when the TSA recommended a range of actions but the Minister’s decision was that the issues should be dealt with in the context of the general review of industry assistance for the footwear industry; men’s and boys’ underpants, in 1992, when the Authority’s recommendation for a temporary duty was accepted; and used tyres, in 1993 and abrasive discs in 1995, when the Authority’s recommendations that no action be taken were also accepted.

Safeguard Practice in New Zealand

The Temporary Safeguard Authorities Act 1987 (TSA Act) provides for the appointment of Temporary Safeguard Authorities to inquire into references made to an Authority by the Minister of Commerce.

The Minister may request an Authority to undertake an inquiry in relation to the importation of goods when it appears to the Minister that the importation of goods has caused or may cause serious injury to an industry. An Authority is required to report on whether the industry has suffered or is likely to suffer serious injury as a result of the importation of the goods, and if so, whether urgent action is necessary to protect the industry and the nature of the protection considered appropriate. The request to the Authority, and any statement of Government policy transmitted to the Authority, are required to be published in the New Zealand Gazette.

The TSA Act defines serious injury as "... significant overall impairment to the economic viability of a domestic industry". An industry is defined in terms of New Zealand producers of like or directly competitive goods, with "directly competitive goods" being "... goods that, as a matter of fact and commercial common sense, are substitutable for imported goods".

In carrying out its inquiry, an Authority is required to call for submissions from interested parties. Provisions regarding the confidentiality of information are similar to those in the Dumping and Countervailing Duties Act. An Authority has 30 working days in which to report to the Minister.

In determining whether an industry is being injured, an Authority is required to evaluate the rate and amount of increase in imports in terms of both volume and value, in absolute and relative terms; the economic impact of the increased importation including actual or potential declines in output, sales, market share, profits, productivity, employment and utilisation of production capacity; factors other than imports which may be injuring the industry; and the nature and extent of imports by New Zealand producers.

An Authority may report to the Minister that urgent action is required only if it is satisfied that the imports are causing or threatening serious injury; that serious injury is not attributable to other causes; and that it is not practicable for the industry to reduce the injury by other adjustment measures.

An Authority may recommend safeguard measures if such measures are compatible with New Zealand’s obligations as a party to the WTO Agreement, including the imposition or variation of any duty, the restriction of imports, or any other action considered appropriate. The reference to WTO obligations is intended to cover the SG Agreement’s provisions relating to the duration and conditions for safeguard action, including general application, degressivity and limitations on repeat action.

Following receipt of a recommendation from an Authority, it is up to the Minister of Commerce to determine what action, if any, shall be taken, i.e. an Authority’s recommendations are not binding. Where the Minister does decide to take action, then it is implemented through the appropriate instrument, which in the case of a change in the rate or amount of a duty, will be through an Order in Council under section 9 of the Tariff Act 1988. Thus, a safeguard measure is currently not a temporary supplementary measure, unlike anti-dumping or countervailing duties, but is a change in the substantive level of protection. This would appear to be inconsistent with the view that a safeguard measure is a temporary and emergency action.