Abstract
Anti-dumping measures and countervailing duties are effective tools to combat trade practices which are considered unfair. Switzerland, however, has no track record of using these trade defence instruments. Since the coming into force of the WTO, no investigations have been initiated let alone measures imposed. The reasons for the abstinence of trade defence instruments in Switzerland are multifaceted. Central is Switzerland’s approach to stick to an open trade regime and to refrain from pursuing an external trade policy which could be considered contentious by its trading partners. The Swiss industry is remarkably specialised and typically produces high-quality products which are less prone to take long lasting injurious blows from dumped or subsidised products as easily as industries abroad; moreover, Swiss consumers have a lower price sensibility than consumers abroad. The possibility to benefit from the use of trade defence instruments applied by the EU, i.e. to free-ride, might also play a role. Overall, it is decisive to observe that Switzerland has done well without taking recourse to trade defence instruments. At the same time, it might well be the case that there will be, in the near future, distress calls for the imposition of trade defence instruments against imported high-quality products also in this country. In particular, the prices of imports from emerging countries, such as China and India, are to be observed carefully. Against this background, it is conceivable that the Swiss government will have to reconsider its passive stance on the use of trade defence instruments in due course; the Swiss government is well advised to prepare the grounds for dealing with potential applications effectively and efficiently.
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Notes
- 1.
See for these statistics www.wto.org (last accessed 30 April 2018) and link to anti-dumping and subsidies and countervailing measures; see also Matsushita et al. (2015), p. 301.
- 2.
Cottier and Oesch (2005), p. 1034.
- 3.
WTO Trade Policy Review Body, Report by the Secretariat on Switzerland and Liechtenstein, WT/TPR/S/355, 11 April 2017, para. 19, 3.50.
- 4.
WTO Committee on Anti-Dumping Practices, Notification of Switzerland under Articles 16.4 and 16.5 of the Agreement, G/ADP/N/193/CHE, 23 December 2009; WTO Committee on Subsidies and Countervailing Measures, Notification of Switzerland under Articles 25.11 and 25.12 of the Agreement, G/SCM/N/202/CHE, 23 December 2009.
- 5.
WTO Committee on Anti-Dumping Practices, Notification of Switzerland under Articles 16.4 and 16.5 of the Agreement, G/ADP/N/193/CHE, 23 December 2009; WTO Committee on Subsidies and Countervailing Measures, Notification of Switzerland under Articles 25.11 and 25.12 of the Agreement, G/SCM/N/202/CHE, 23 December 2009.
- 6.
WTO Committee on Anti-Dumping Practices, Format adopted by the Committee on 21 October 2009 on the Notification under Articles 16.4 and 16.5 of the Agreement, G/ADP/19, 3 November 2009; WTO Committee on Subsidies and Countervailing Measures, Format adopted by the Committee on 29 October 2009 on the Notification under Articles 25.11 and 25.12 of the Agreement, G/SCM/129, 29 October 2009. 46 WTO members submitted a similar notification to refrain from using anti-dumping measures; 39 WTO members submitted a similar notification to refrain from using countervailing duties. Switzerland and Liechtenstein are the only developed countries among those 34 WTO members which submitted both notifications.
- 7.
Federal Act on External Economic Measures of 25 June 1982, SR 946.201 [the “SR” is the official compilation of federal legislation in Switzerland; www.admin.ch (last accessed 30 April 2018) and link to Bundesrecht].
- 8.
Federal Act on Customs Tariffs of 9 October 1986, SR 632.10.
- 9.
Botschaft zu einem Bundesgesetz über aussenwirtschaftliche Massnahmen of 7 December 1981, BBl 1982 I 61, p. 70.
- 10.
Federal Constitution of the Swiss Confederation of 18 April 1999, SR 101.
- 11.
- 12.
Cottier and Oesch (2005), pp. 1007 and 1034.
- 13.
Regulation (EU) 2016/1036 on protection against dumped imports from countries not members of the European Union; Regulation (EU) 2016/1037 on protection against subsidised imports from countries not members of the European Union; also Regulation (EU) 2017/2321 amending these regulations; U.S. Tariff Act of 1930, 19 U.S.C. §§ 1671–1677n (2012).
- 14.
See for these notifications: WTO Committee on Anti-Dumping Practices, Notification under Articles 16.4 and 16.5 of the Agreement, G/ADP/N/193/CHE, 23 December 2009; WTO Committee on Subsidies and Countervailing Measures, Notification under Articles 25.11 and 25.12 of the Agreement, G/SCM/N/202/CHE, 23 December 2009.
- 15.
Cf. WTO Trade Policy Review Body, Report by the Secretariat on Switzerland and Liechtenstein, WT/TPR/S/355, 11 April 2017, para. 3.50. In two notifications of 1995, Switzerland informed the WTO that the Federal Office for External Economic Affairs, the predecessor office of SECO, was competent to initiate and conduct investigations pursuant to the AD Agreement and the SCM Agreement at the time; WTO Committee on Anti-Dumping Practices, Notification of Switzerland of Laws and Regulations under Article 18.5 of the Agreement, G/ADP/N/1/CHE/1, 4 May 1995; WTO Committee on Anti-Subsidy Practices, Notification of Switzerland of Laws and Regulations under Article 32.6 of the Agreement, G/SCM/N/1/CHE/1, 4 May 1995.
- 16.
- 17.
Arpagaus (2007), p. 652, fn. 2245; Diebold and Oesch (2008), p. 1541; see also the response of Federal Councillor Flavio Cotti to a request to introduce anti-dumping measures against the import of wood in 1988, Amtl. Bull. NR 1988, p. 695. It must be noted, however, that the Swiss Federal Supreme Court has traditionally been reluctant to grant WTO law direct effect, based on similar rationales as those relied upon by the ECJ; Cottier and Oesch (2005), pp. 223–226.
- 18.
Cottier and Oesch (2005), p. 151.
- 19.
Cottier and Oesch (2005), p. 151; see also Article 5 of the Ordinance on the Organisation of the Federal Department of Economic Affairs, Education and Research of 14 June 1999, SR 172.216.1, according to which SECO is the centre of competence for external economic matters.
- 20.
Judgement of the Federal Supreme Court of 3 June 1955, Schoenemann v Swiss Confederation, BGE 81 I 159, p. 170 (own translation), with respect to interventions in favour of Swiss citizens abroad in general.
- 21.
Diebold and Oesch (2008), p. 1536.
- 22.
A notable exception was the intervention of Switzerland before the European Court of Justice in the so-called “airplane noise pollution dispute” concerning the conformity of the prohibition of flights over southern German territory during the night below a certain altitude imposed by Germany with the Agreement on Air Transport between Switzerland and the EU of 21 June 1999, SR 0.748.127.192.68; CJEU, Case C-547/10 P, Swiss Confederation v Commission, ECLI:EU:C:2013:139.
- 23.
Switzerland initiated three cases in 1997 (WT/DS94) and 1998 (WT/DS119, WT/DS133); moreover, it participated in several disputes as a third party [www.wto.org (last accessed 30 April 2018) and link to dispute settlement/disputes by members].
- 24.
Appellate Body Report, United States – Definitive Safeguard Measures on Imports of Certain Steel Products, WT/DS253/AB/R, adopted 10 November 2003, DSR 2003:III, and Panel Report, United States – Definitive Safeguard Measures on Imports of Certain Steel Products, WT/DS253/R, adopted 11 July 2003 (as modified by the former).
- 25.
In addition to these formal mechanisms, private operators and their lobby groups also continue, of course, to use informal channels to bring allegedly unfair trade practices to the attention of the authorities.
- 26.
Trade Act of 1974, § 301, 19 U.S.C. § 2411(a)(1) (2012); see for the procedures laid down by Section 301 Jackson et al. (2013), pp. 360–362.
- 27.
Trade Barriers Regulation (EU) No 2015/1843; International Trade Rules Enforcement Regulation (EU) No 654/2014; see for the procedures laid down by the Trade Barriers Regulation Van Bael and Bellis (2011), pp. 441–628 (for anti-dumping measures) and pp. 709–716 (for countervailing duties).
- 28.
The English translation is available on the website of the Ministry of Commerce of China, http://english.mofcom.gov.cn (last accessed 30 April 2018); Van den Bossche and Zdouc (2017), p. 184.
- 29.
WTO Trade Policy Review Body, Report by the Secretariat on Switzerland and Liechtenstein, WT/TPR/S/355, 11 April 2017, para. 1.
- 30.
Cf. WTO Trade Policy Review, Report by the Secretariat on Switzerland and Liechtenstein, WT/TPR/S/13, 26 April 1996, p. xi.
- 31.
Bienen D, Ciuriak D and Picarello T (2012) Motives for using trade defense instruments in the European Union. BKP Development Trade and Development Discussion Paper No. 01/2012, March 2012, http://www.bkp-development.com/discussion-papers/BKP_DP_2012-01-Bienen-Ciuriak-Picarello-TDI-Motives.pdf (last accessed 30 April 2018), p. 39; see for further economic research in this area Mukunoki H (2017) Does trade liberalization promote antidumping protection? A theoretical analysis. RIETI Discussion Paper Series 17-E-031, March 2017, https://www.rieti.go.jp/jp/publications/dp/17e031.pdf (last accessed 30 April 2018); Bown and Crowley (2014); Feinberg and Reynolds (2007).
- 32.
Bienen D, Ciuriak D and Picarello T (2012) Motives for using trade defense instruments in the European Union. BKP Development Trade and Development Discussion Paper No. 01/2012, March 2012, http://www.bkp-development.com/discussion-papers/BKP_DP_2012-01-Bienen-Ciuriak-Picarello-TDI-Motives.pdf (last accessed 30 April 2018), p. 39.
- 33.
Cottier and Naef (2014), pp. 185–187.
- 34.
See Appellate Body Report, United States – Definitive Safeguard Measures on Imports of Certain Steel Products, WT/DS253/AB/R, adopted 10 November 2003, DSR 2003:III, and Panel Report, United States – Definitive Safeguard Measures on Imports of Certain Steel Products, WT/DS253/R, adopted 11 July 2003 (as modified by the former).
- 35.
WTO Trade Policy Review Body, Report by the Secretariat on Switzerland and Liechtenstein, WT/TPR/S/355, 11 April 2017, para. 19, 3.50; exceptionally, in 1999, Switzerland notified the WTO the imposition of additional duties on swine meat, based on the special safeguard mechanism pursuant to Article 5 of the Agreement on Agriculture, see Cottier and Oesch (2005), p. 505.
- 36.
See for these figures https://www.eda.admin.ch/eda (last accessed 30 April 2018).
- 37.
Moreover, Article 27 of the Free Trade Agreement between Switzerland and the EEC of 22 July 1972 (SR 0.632.401) obliges the parties to supply the joint committee with all relevant information required for a thorough examination for the situation with a view to seeking a solution acceptable to the parties before a party imposes anti-dumping measures.
- 38.
Free Trade Agreement between the EFTA States and the Republic of Chile of 26 June 2003, SR 0.632.312.451.
- 39.
Free Trade Agreement between the EFTA States and Canada of 26 January 2008, SR 0.632.312.32.
- 40.
Free Trade Agreement between the EFTA States and the United Mexican States of 27 November 2000, SR 0.632.315.631.1.
- 41.
Free Trade Agreement between the Swiss Confederation and the People’s Republic of China of 6 July 2013, SR 0.946.292.492.
- 42.
See Article 3 AD Agreement and Article 15 SCM Agreement for the requirement that the imposition of anti-dumping measures and countervailing duties requires a determination that the dumped or subsidised imports cause injury to the domestic industry.
- 43.
See for the main features of the Swiss economy—characterised by a large services sector but also possessing a strong, high-tech and export-oriented manufacturing base—WTO Trade Policy Review Body, Report by the Secretariat on Switzerland and Liechtenstein, WT/TPR/S/355, 11 April 2017, paras. 1.1 et seq.
- 44.
Müller (2015), para. 1, with further references.
- 45.
WTO Trade Policy Review Body, Report by the Secretariat on Switzerland and Liechtenstein, WT/TPR/S/355, 11 April 2017, para. 17.
- 46.
See for the sectoral distribution of anti-dumping measures and countervailing duties introduced by the EU www.wto.org (last accessed 30 April 2018) and link to trade topics, anti-dumping and www.wto.org (last accessed 30 April 2018) and link to trade topics, subsidies and countervailing measures; see for an overview on the current practice of the EU http://trade.ec.europa.eu/tdi (last accessed 30 April 2018).
- 47.
This holds true, for instance, for molybdenum wires; see the determination by the European Commission in European Commission, Proposal for a Council Regulation extending the definitive anti-dumping duty imposed by Regulation (EU) No 511/2010 on imports of certain molybdenum wires originating in the People’s Republic of China to imports of certain molybdenum wires consigned from Malaysia, whether declared as originating in Malaysia or not, and terminating the investigation in respect of imports consigned from Switzerland, COM/2011/0867 final—2011/0422 (NLE), Explanatory Memorandum, Point 3.
- 48.
This holds true, for instance, for citrus fruits and rainbow trouts.
- 49.
Okoumé plywood, rebars, coated fine paper and aluminum foil are other examples.
- 50.
See for an overview on EU anti-dumping measures on bicycles http://trade.ec.europa.eu/tdi/case_history.cfm?init=1532 (last accessed 30 April 2018).
- 51.
See for background information on the Swiss bicycle industry Brusa N, Der letzte Schweizer Velorahmen-Löter. Tagesanzeiger, 25 August 2014, https://www.tagesanzeiger.ch/wirtschaft/unternehmen-und-konjunktur/Auf-den-Felgen/story/23460006 (last accessed 30 April 2018).
- 52.
See Eckhardt (2010), pp. 158 et seq., for a comprehensive account of EU protectionist textile and clothing trade policy.
- 53.
Eckhardt (2010), pp. 158 et seq. and 169.
- 54.
Eckhardt (2010), pp. 158 et seq. and 171–173.
- 55.
See for an overview on EU anti-dumping measures on polyester yarn www.trade.ec.europa.eu/tdi/case_history.cfm?ref=com&init=1522 (last accessed 30 April 2018).
- 56.
Cottier and Oesch (2005), p. 748.
- 57.
Cottier and Oesch (2005), p. 748.
- 58.
See for background information on the Swiss textiles and clothing industry, Schmutz CG, Keine Angst vor chinesischer Billigware. Neue Zürcher Zeitung Online, 15 May 2014, https://www.nzz.ch/wirtschaft/keine-angst-vor-chinesischer-billigware-1.18302668 (last accessed 30 April 2018).
- 59.
Decisions by the Arbitrators in Canada – Measures Affecting the Export of Civilian Aircraft (Art. 22.6 – Canada), WT/DS222/ABR, adopted 17 February 2003, para. 3.59; United States – Tax Treatment for “Foreign Sales Corporations” (Art. 22.6 – US), WT/DS108/AB/R, adopted 30 August 2002, para. 5.57; Brazil – Export Financing Programme for Aircraft (Art. 22.6 – Brazil), WT/DS46/ABR, adopted 28 August 2000, para. 3.44; see Mitchell (2006), pp. 1003–1004; cf. also, however, Decision by the Arbitrator, United States – Subsidies on Upland Cotton (Art. 22.6 – Brazil), WT/DS267/ABR/2, adopted 31 August 2009, para. 4.28, where the arbitrators were not convinced that the term “countermeasures” necessarily connotes an intention to refer to retaliatory action that goes beyond mere rebalancing of trade interests.
- 60.
Appellate Body Report, United States – Definitive Anti-Dumping and Countervailing Duties on Certain Products from China, WT/DS379/AB/R, adopted 11 March 2011, DSR 2010:III, para. 554.
- 61.
Van den Bossche and Zdouc (2017), p. 858.
- 62.
Free Trade Agreement between Switzerland and the EEC of 22 July 1972, SR 0.632.401.
- 63.
See Brunschweiler and Troller (2014), para. 21, for a description of the potential for circumvention of EU trade defence interventions by Switzerland and China based on the Free Trade Agreement between Switzerland and China of 6 July 2013 (SR 0.946.292.492).
- 64.
Commission Regulation (EU) No 477/2011 of 17 May 2011 initiating an investigation concerning the possible circumvention of anti-dumping measures imposed by Council Implementing Regulation (EU) No 511/2010 on imports of certain molybdenum wires originating in the People’s Republic of China by imports of certain molybdenum wires consigned from Malaysia and Switzerland, whether declared as originating in Malaysia and Switzerland or not, and making such imports subject to registration.
- 65.
Council Implementing Regulation (EU) No 14/2012 of 9 January 2012 extending the definitive anti-dumping duty imposed by Implementing Regulation (EU) No 511/2010 on imports of certain molybdenum wires originating in the People’s Republic of China to imports of certain molybdenum wires consigned from Malaysia, whether declared as originating in Malaysia or not, and terminating the investigation in respect of imports consigned from Switzerland.
- 66.
GC, Case T-152/16, Megasol Energie v Commission, ECLI:EU:T:2017:446.
- 67.
The General Court denied a legitimate interest of the Swiss solar firm in the proceedings because the firm was, according to the General Court, looking for a declaratory judgment regarding a hypothetical situation, GC, Case T-152/16, Megasol Energie v Commission, ECLI:EU:T:2017:446, para. 23.
- 68.
See Bühlmann (2016), p. 20, concerning the difficulties of determining the origin of processed products according to the EU Customs Code in connection with potential circumventions of EU anti-dumping duties for Swiss online retailers.
- 69.
Cf. Thi Thu (2012), passim, for the limited management and investigation capacities in Vietnam, constituting, according to the author, a prime reason why a country such as Vietnam does not take recourse to trade defence instruments.
- 70.
Cf. supra Sect. 2.2.
- 71.
See for the presumed competence of SECO to initiate and conduct investigations supra Sect. 2.1.
- 72.
Luckily, Switzerland, as the host state of the WTO in Geneva, is in a position to swiftly acquire the relevant know-how from one of the many trade law firms, and other specialists, which are based, e.g., in Geneva.
- 73.
Diebold and Oesch (2008), p. 1536.
- 74.
Appellate Body Report, United States – Definitive Safeguard Measures on Imports of Certain Steel Products, WT/DS253/AB/R, adopted 10 November 2003, DSR 2003:III, and Panel Report, United States – Definitive Safeguard Measures on Imports of Certain Steel Products, WT/DS253/R, adopted 11 July 2003 (as modified by the former).
- 75.
Cottier and Oesch (2005), p. 1034, with respect to the absence of anti-dumping legislation.
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Oesch, M., Naef, T. (2018). Trade Defence Instruments and Switzerland: The Big Sleep. In: Bungenberg, M., Hahn, M., Herrmann, C., Müller-Ibold, T. (eds) The Future of Trade Defence Instruments. European Yearbook of International Economic Law(). Springer, Cham. https://doi.org/10.1007/978-3-319-95306-9_11
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