On 29 July 2020 the Department of Trade (DIT) announced a change in regulations expanding the TRID’s current powers to investigate whether or not UK trade remedy should be applied in cases of imports causing or threatening to cause injury to UK businesses.
The new investigations can be opened from 5 August 2020 and relate to imports already the subject of an existing EU investigation. The change is a step in the transition away from the EU’s exclusive competence to apply trade remedies benefiting industries in the UK and towards the UK’s sole responsibility for doing so from 1 January 2021 onwards.
Prior to 5 August 2020, the TRID had the power to commence investigations into whether existing EU measures should be replaced by the imposition of a UK remedy once the Brexit transition period ends on 31 December 2020. So far the TRID has opened three such investigations – in February, March and July of this year. This most recent change allows the TRID, in addition, to open investigations into the possibility of imposing a trade remedy in respect of imports to the UK in cases where the EU has already commenced an investigation, but has not yet taken the decision to impose a remedy.
The TRID has been set up by the DIT as a temporary arrangement during the Implementation Period following the UK leaving the EU. From 1 January 2021, by which time the TRID’s functions will have become these of the Trade Remedies Authority (TRA), the TRA will be able to carry out not only these investigations, but also investigations into imports which have not been the subject of EU measures or of EU investigations. The TRA will be able to make recommendations that the Secretary of State imposes measures in respect of them where appropriate. The scope for trade remedies applying in the UK may well therefore increase with a UK focused Non Departmental Public Body looking specifically at applications made by those in the UK.
Trade remedies are aimed at preventing imported goods from being dumped on the UK market at prices below normal values (that is, below the normal cost of goods in their domestic market), or imports of subsidized goods, or a significant influx of imports of a particular product flooding the market. They are a familiar feature of the EU legal system and the ways in which the European Commission exercises these functions to prevent unfair trade practices are well-known.
The new mechanisms established by the UK will inevitably have certain differences, however. The UK’s system has been set up having looked not only at the EU’s legislation and practices, but at the relevant WTO agreements (the GATT, the Anti-Dumping Agreement, the Agreement on Subsidies and Countervailing Measures and the Agreement on Safeguards) also that from other jurisdictions, including Australia. One of the pre-condition tests that parties either applying for a measure or resisting one will have to address is whether it is in the economic interest of the UK or not to introduce a remedy after balancing the pros and cons of doing so. Detailed information is likely to be required.
The procedures relating to the investigations process and the systems set up to allow the review of the TRA’s decisions and appeals of decisions to the Upper Tribunal are all new. Businesses will therefore have to navigate the new requirements and the UK’s newly established procedures. The remedies that the TRA will be able to impose are anti-dumping duties or countervailing duties (which can be up to the lower of the dumping or subsidy margin, as the case may be, or the injury margin) or safeguard measures (that is, tariff increases or tariff rate quotas not targeted at a particular country) for a specified period.