Countervailing duties are a means to restrict international trade in cases where imports are subsidized by a foreign country and hurt domestic producers. According to WTO rules, a country can launch its own investigation and decide to charge extra duties. Since countries can rule domestically whether domestic industries are in danger and whether foreign countries subsidize the products, the institutional process surrounding the investigation and determinations has significant impacts beyond the countervailing duties.
In examining the underpinnings of antidumping and countervailingduty law, the paper shall examine in particular the economic rationale for these laws-that is to say, the coherence of the efficiency rationale and the degree to which these remedies enhance economic well-being.
Countervailingduties are intended to offset the subsidies which some foreign governments may provide to their exporters, eliminating within the duty-imposing country any competitive advantage which those subsidies might otherwise provide.
The impact of countervailingduties on global economic efficiency is clearly irrelevant to the decisions facing the importing government as to whether to impose such duties.
Pursuant to this order countervailingduties were imposed, as of that date, under Section 303 of the Tariff Act of 1930 which had been covered by the existing legislation clause under the GATT Protocol of Provisional Application, and therefore no injury determination was made.
The countervailingduty levied on the entries between 1 January 1980 and 31 December 1980 was 8.84 per cent.
At that time, countervailingduties on non-rubber footwear from Brazil were being levied pursuant to a decision taken by the United States in 1974 under section 303 of the Tariff Act of 1930, covered by the existing legislation clause of the Protocol of Provisional Application.
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