Introduction Three types of TDI Relevant actors


The field of trade defence instruments (TDIs) is among the most active in international trade law and their use could further increase as a result of the current wave of protectionism. TDIs are measures imposed by countries in order to protect their markets when harmed by certain trade practices by exporters (dumping) or other governments (subsidisation), or by an unforeseen, sharp and sudden increase in imports. TDIs are among the main exceptions allowed by the World Trade Organisation (WTO) to the principles governing international trade. These key principles include the prohibition on raising tariffs above a certain level and the obligation to apply tariffs equally to all trading partners. As TDIs are exceptions to those principles, the imposition of TDIs is governed by strict rules imposed by the relevant WTO agreements.

In the European Union, which frequently makes use of these instruments, TDIs are based on the global framework set out by WTO law and on a number of additional conditions adopted at EU level. However, the EU legal framework must comply with WTO law. In certain cases, WTO law has direct effect under EU law. In other words, under certain conditions, the legality of EU law might be reviewed in light of the relevant WTO agreements by the European courts.

Case law of the European Court of Justice (ECJ) reveals that, having regard to their nature and structure, WTO agreements are not in principle among the rules in the light of which it is to review the legality of measures adopted by the EU institutions. In that regard, the ECJ has held that to accept that the European courts would have the direct responsibility for ensuring that EU law complies with WTO rules would deprive the European Union's legislative or executive bodies of the discretion that the equivalent bodies of EU commercial partners enjoy. Indeed, in the legal order of most WTO members, which are among the most important commercial partners of the European Union, WTO law has no direct effect. The ECJ held that such a lack of reciprocity, if accepted, would risk introducing an anomaly in the application of the WTO rules.

Even though WTO rules do not in general have direct effect, the ECJ has developed two exceptions.

One exception concerns the scope of indirect effect and is based on a consistent interpretation approach, according to which, when EU secondary law is open to more than one interpretation, the one to be chosen is that consistent with the international agreements which are part of EU law. This principle has been applied several times in relation to international trade law. In other words, EU law should to the extent possible be interpreted in line with WTO law.

Regarding the second exception, the ECJ has accepted that it is for the European courts to review the legality of an EU measure and the measures adopted for its application in the light of the WTO agreements, where it is the EU legislature's own intention to limit its discretion in the application of WTO rules.

According to this jurisprudence, first, where the EU measure at stake expressly refers to a specific and precise provision of the WTO agreements, such economic agents "are entitled to request the court to exercise its powers of review over the legality of the commission's decision applying those provisions".

Second, WTO law has direct effect where the European Union intends to implement a particular obligation assumed in the context of the WTO agreements. In such a situation, an economic agent subject to such an individual measure can request the European courts to investigate whether the EU institution has acted in breach of the European Union's international commitments by adopting the particular act in question. This specifically applies to most provisions of the EU regulations that have implemented EU obligations regarding trade defence instruments, in particular the basic Anti-dumping Regulation, the basic Anti-subsidy Regulation and the Safeguards Regulation.

These exceptions are increasingly narrowly interpreted. In order for such an exception to be allowed in a specific case, it must also be established to the requisite legal standard that the legislature has shown the intention to implement in EU law a particular obligation assumed in the context of the WTO agreements. To that end, it is not sufficient for the preamble to an EU act to support only a general inference that the legal act in question was to be adopted with due regard for international obligations entered into by the European Union. It is necessary to deduce from the specific provision of contested EU law that it seeks to implement into EU law a particular obligation stemming from the WTO agreements.

The applicable legal framework under EU law includes the relevant EU laws as well as, under certain conditions, the relevant WTO agreements.

Three types of TDI

There are three different types of TDI:

  • anti-dumping measures;
  • countervailing (or anti-subsidy) measures; and
  • safeguard measures.

Anti-dumping measures Dumping occurs when an exporting producer sells its products in a foreign market below the normal value for these products. The normal value corresponds, depending on the circumstances, to the actual sales price charged by the exporting producer in its domestic market, or to a theoretical price on this domestic market (usually calculated on the basis of the exporter's cost of production, selling, general and administrative costs, and a reasonable profit margin).

However, dumping per se is not enough for the imposition of anti-dumping measures. Dumped imports must also be found to cause material injury to the domestic industry in order to justify the imposition of measures. Once these three elements (dumping, injury and a causal link between both) have been established by means of an investigation, anti-dumping measures may be imposed.

These measures typically take the form of additional duties on imports of the products originating in the country in question. These duties can be fixed, variable or a percentage of the total value of the imported goods. In certain cases, undertakings may be accepted from the exporting producers. Under an undertaking, the exporting producers generally agree not to sell their products below a minimum import price. Some undertakings may also establish quotas, whereby the products are imported up to a certain quantity, after which the anti-dumping duties will apply.

Anti-dumping measures may be provisionally applied for a period of six or nine months, depending on the circumstances. Where the relevant investigating authority decides to impose definitive measures, these may be applied for a period of up to five years. Subject to certain conditions, the measures may be renewed after the expiry of this five year period.

Countervailing measures Countervailing measures or anti-subsidy measures are designed to counteract subsidisation by the exporting country. A subsidy is a financial contribution given by or at the direction of a government or any public body of the exporting country, to confer a benefit on the exporting producer. However, only specific subsidies can be tackled by means of countervailing measures. Subsidies are specific if they are provided to only one company, an identifiable group of companies, one industry or an identifiable group of industries. Subsidies are also deemed to be specific if they are contingent on export performance or the use of domestic goods over imported goods.

As with anti-dumping measures, in order for countervailing measures to be imposed, it is not enough to simply find a specific subsidy. Indeed, the subsidised imports must also be found to cause material injury to the domestic industry. Once these three elements (specific subsidy, injury and a causal link between them) have been established by means of an investigation, countervailing measures may be imposed. Like anti-dumping measures, countervailing measures typically take the form of duties on imports of the products originating in the country in question, and may be fixed, variable or a percentage of the total value of the imported goods. Undertakings may also be accepted.

Countervailing measures may be provisionally applied for a period of up to four months. In case the relevant investigating authority decides to impose definitive measures, these may be applied for a period of up to five years. Subject to certain conditions, after the expiry of this five-year period, the measures may be renewed.

Safeguard measures Safeguard measures are not designed to address trade practices that are commonly perceived as unfair, as opposed to anti-dumping and countervailing measures which tackle such practices by an exporter (dumping) or government (subsidisation). Rather, safeguard measures concern imports of a particular product that increase so suddenly and sharply that domestic producers are unable to adapt to the altered trade situation. In such cases, countries may impose short-term measures regulating the imports, allowing the domestic industry to adapt to such an unforeseen surge and providing temporary relief.

In order to impose safeguard measures, the investigation must reveal that the increased imports are causing or threatening serious injury to the domestic industry. While anti-dumping and countervailing measures target imports from a specific country or group of countries, safeguard measures are in principle imposed on all imports, regardless of their origin.

Safeguard measures allow for a suspension of concessions or obligations under the WTO agreements and, as such, typically take the form of quantitative restrictions or additional duties on imports. They may be provisionally applied for up to 200 days. If the relevant investigating authority decides to impose definitive measures, these may be applied for a period of up to four years. However, measures in place for longer than one year must be progressively liberalised at regular intervals during the period of application, and safeguard measures that are imposed for a period exceeding three years must be reviewed mid-term. Subject to certain conditions, after the expiry of the initial period of application, the measures may be renewed, but the total duration of the measures cannot exceed eight years.

As opposed to anti-dumping and countervailing duties, the use of the safeguard instrument is rare in the European Union.

Relevant actors

Generally, TDIs concern four main categories of actor:

  • domestic industry;
  • exporting producers;
  • importers; and
  • governments.

Domestic industry TDIs are imposed pursuant to an investigation, which is principally initiated following a request made by the domestic industry. In the European Union, this would thus be the producers of a specific product located in the European Union. In certain situations, the imposition of TDIs is the only way for a deteriorating industry to protect itself from unfair imports, or from an unforeseen, sharp and sudden increase in imports. Subject to certain conditions, any domestic industry may request the imposition of TDIs.

Exporting producers At the other end of the spectrum are the exporting producers, whose products are or might become subject to TDIs. Depending on the country imposing TDIs, facing the imposition of TDIs may range from a minor inconvenience to a matter of survival. Indeed, in some circumstances, the TDI can be imposed by a key export market for the exporting producers. Exporting producers generally have a strong interest in cooperating in the initial investigation, since this may allow them to avoid the imposition of TDIs or to obtain an individual duty (which can be lower than that of their competitors). During the application of TDIs, they might wish to ask for a review of, for instance, the level of the duties.

Importers Importers and users of the product subject to the investigation are generally not in favour of the imposition of TDIs. However, they sometimes need to take a balanced approach, in view of their relationship with the domestic producers of the products. They can also take part in the investigation to express their views and influence the outcome.

Governments Governments are implicated when their exporting producers face the imposition of TDIs, which can significantly harm their industries. Further, in cases of subsidisation, it is beneficial for exporters if their government cooperates with the investigation undertaken by the foreign government. Finally, it is governments that conduct the investigations, and their conduct can also be scrutinised under the WTO Dispute Settlement Body. As such, governments will also act as defendants or complainants during WTO dispute settlements in cases where there may be violations of the relevant WTO agreements.

For further information on this topic please contact Renato Antonini, Byron Maniatis or Eva Mondard at Jones Day by telephone (+32 2645 1419) or email (, or The Jones Day website can be accessed at

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