More Can Be Done to Perfect the System?
C. Imposition of Safeguard Measures
Safeguard action is a temporary measure in import restrictions to allow the domestic industry "breathing" and make adjustments to market conditions where at the same time, there is very heavy competition which demanded restructure. In terms of import restrictions, setting the safeguard measures seem to deviate from the general agreement who wants to create a world free trade system established by the WTO agreement. Yet, this safeguard action scheme is precisely made to create that world trade allows each country to compete in a fair and mutually supportive and not to kill each other.
Safeguard action can only be applied after going through the process of investigation or verification of imports rebound similar items or goods that directly compete with domestically produced goods that results in serious injury or threat of serious losses to the domestic industry producing these goods or the fulfillment of all requirements set out in Articles 2 and 4 SA.
C.1. While Safeguard Measures
If there is early evidence of an increase in imports, which result in serious loss or threat of serious injury to the domestic industry, the provisional safeguard measures can be charged as stipulated in the Article 6 SA, while the actions are being required in "critical condition", i.e. if no immediate action, this will create worse conditions to do repairs or recovery.
Temporary safeguard action can only be imposed in the form of increased customs duties. Imposition of provisional duty is valid for a period of 200 days from the imposition and can not be extended. Imposition of provisional safeguard measures must comply with the requirements as stipulated in the Articles 2 to 7 and 12 SA. If the results of the investigation show that there is no causal connection between the increase in imports and serious injury or threat of serious losses, the provisional safeguard measures may be discontinued and duties that have been collected are returned as soon as possible.
C.2. Safeguard measures Stay
As set forth in Article 5.1, safeguard measures are conducted to avoid or cure serious losses and help the domestic industry. The investigation needs to make a clear justification related to causal relationship, which is an increase in imports that results in serious injury or threat of serious loss. Safeguard action can be specified in three forms, namely an increase in customs duties, import quotas and the combination of both forms.
If the security measures set out in the form of quotas, the quota can not be less than the average of hte import data in the last three years, unless, it can be proven with the other set that is able to cover the serious losses, suffered by the domestic industry. In other words, for the case of the imposition of a
different number of import quotas on average in the last three years requires proof or justification in particular. Countries that take security measures in the form of quota different from the average imports of the last three years are required for evidence or justification in particular. Countries that take security measures in the form of quotas can make a deal with the country's largest exporter of the quota allocation. If there is no agreement, then per country quota is determined by the share of exports of each country in a given period that is representing.
Import quota should not be based on performance data previously imported, as provided in Article 5.2 (b), if they meet several requirements. First, the safeguard measures only to recover damages done seriously, not as a threat.
Secondly, the consultation has been carried out by the exporting country.
Third, the importer must demonstrate to the State Committee on Safeguards that: 1. imports of certain State disproportionate increase compared with total imports, 2. The demands on the whole is reasonable, 3. Such actions have been balanced against all exporters of certain products. Lastly, this action should not be longer than 4 years.
C.3. Period of imposition of safeguard measures
Safeguard actions are essentially temporary emergency action to restore the domestic industry. The recovery period of the guidelines given in Article 7.1 SA is "in a certain period of time sufficient to protect or restore the serious losses and facilitate structural adjustments". Imposition of safeguard measures should not be more than four years, including the imposition of a period of provisional safeguard measures, if any.
Safeguard action set more than one year should be liberalized at regular intervals over a period of imposition. If the safeguard measures impose a period of more than three years, the State wearing a safeguard action must perform a review of its development, by the middle of the imposition of a period of time. If possible, it is decided to cancel or accelerate liberalization.
Safeguard action can be extended if it meets the following requirements:
1. Such action is necessary to protect or restore the serious losses and
2. There is evidence that the domestic industry is doing adjustments (Article 7.2).
According to the provisions of Article 7.3 SA, the imposition of safeguards is applicable maximum only 8 years, including the current imposition of provisional safeguard measures. Especially for developing countries, this can be extended up to 10 years. In the extension period action, security should not be more stringent than the previous period and gradually liberalize every year.
In SA, the imposition of safeguard measures against the same product is very limited. It is intended to circumvent the protection. This is only temporary restrictions on imports into the domestic market or otherwise to close permanently by doing different security. Basically security measures can not be used again on a particular item up to the period before the action has been completed (at least two years). But, if the previous security measures expire in less than 180 days, the following actions can be performed if:
1. Previousactionhad endedat leastoneyearand
2. The same product has not been worn twice in a five-year period prior to the imposition of new measures.
C.4. Safeguard measures are discriminatory
In the article of SA 2.2, it is determined that the imposition of safeguard measures is applicable to all countries without distinction of origin of the goods exporter. In other words, implementing security measures on the basis of
"most-favoured nation" (MFN). Liberation can only be given to develop country import that account for less than three percent or collectively not more than nine per cent for developing countries that the import is less than three percent (Article 9 SA).
C.5. Compensation and Suspension of Obligations
Safeguard action is basically a release of liability for the State while importing.
Despite this, in Article 8.1 SA determines the necessity to bear the liability or provide concessions at an equal amount to the load experienced by the State exporters. For that reasons, before the imposition of the safeguard measures which is necessary to advance negotiations on the compensation that can be awarded by the State to the State importers & exporters, this is affected by such action.
In the event that no agreement is reached in the negotiations within 30 days, then the state can take responsibility for the action of exporter suspension by concessions that should be received no later than 90 days after the imposion of safeguard measures. The rights can only be used after the suspension action plan has been notified to the Council for trade in Goods and no rejection.
Other requirements that need to be considered in the use of deferral rights obligations is Article 8.3 SA. This was established to inform that the suspension of the obligation can not be implemented within the first three years if the imposition of the safeguard measures have met the following requirements: 1.
Safeguard action imposed on the basis of an absolute increase in imports and all the provisions of the SA that have been met.
C.6. Imposition of Safeguard Measures reqiurements
Various activities in the implementation of the provisions of the SA should qualify transparency in serious shape caused by increasing imports and urgent conditions.
Every stage of the investigation must be notified to the Security Committee, including the start of the investigation (initiation), the discovery of evidence of serious injury or threat of serious losses, the decision and the imposition of security measures done during the extension of the imposition of safeguard measures.
Domestic industry which suffers serious losses or threat of serious injury caused by imports rebound having similar items or directly competing with the safeguard investigation can apply to the Indonesian Trade Security Committee (KKPPI). The parties that can apply includes manufacturer, producer associations, labor organizations, importers, importers associations, industry users, exporters, exporter associations, government and individuals or legal entities related. Request must be equipped with a variety of information which is needed that this includes: Identification of the applicant, a complete description of goods produced, including: item name, number and description of goods and HS import duty, the country of origin of imported goods, related parties, i.e. the list of the domestic industry, exporters and importers, the data of Indonesian imports increase in the last five years, production and market share of the applicant, as well as per country exporters, serious injury or threat of serious losses from changes in the applicant's views: market share, sales, production, productivity, capacity utilization, profits and and the loss of labor due to increasing imports and domestic production, the causal relationship between increasing imports of the serious injury or threat of serious losses seen from the effects of the volume and price effects can be amplified with, and the things which are not alleged that resulting in increased imports.
C.7. If the company gets notification Safeguard Measures
Article 9.1 SA provides requirements for imposition of safeguard measures against developing country. Safeguard action can not be imposed if import from developing country is less than 3 percent individually or collectively less than 9 percent for each of the imports which is less than 3 percent.
For companies in Indonesia who receive notification of safeguard actions, then they must:
a. Notify the Ministry of Trade in the Trade Directorate of Security;
b. Actively respond to every stage of the investigation process (cooperative);
c. Form a special team of experts fields of accounting, law, economics companies and translators if necessary;
d. Study substance safeguard measures;
e. Understand the rules or regulations of the WTO safeguard measures and that the State would undertake safeguard measures;
f. Understand Petitions or objections on the proposed safeguard measures;
g. Follow the hearing to submit rebuttal directly;
h. File for compensation to States that has imposed safeguard measures after 3 years of imposition of safeguard.
C.8. investigation procedures
SA does not regulate in detail the investigation procedures in the Agreement Anti-Damping and Anti-Subsidy. Some general guidelines are listed in SA, namely:
First: the investigation must be conducted in accordance with procedures established and published previously, including to be notified to the WTO Committee on Safeguards.
Second: the start of the investigation safeguard measures should be announced in the printed media.
Third: during the execution of the investigation, there should be given an opportunity for interested parties to submit comments or evidence and respond to evidence or argument from the other side.
Fourth: confidential documents should not be given to any other party without the consent of the owner of the document or the information providers. Unless the Authority considers it appropriate to clasify certain information as confidential or parties who are not willing to provide information summaries that are not confidential in nature.
Fifth: The final report containing the results of a detailed investigation and conclusions set forth the reason or legal basis used and should be announced in the media written at the end of the investigation.
Under the rules set forth in the Directorate of Trade Protection, Directorate General of Foreign Trade Ministry of Commerce, the investigation procedure Safeguard measures include:
a. Noticing the initial (pre-initiation) will impose safeguard measures by the State that will apply.
b. Notification (initiation), the commencement of the safeguard measures investigations;
c. Submited proposals safeguard measures petitions and documents that are not confidential / non-confidential complaint to the government of the country of origin of imported goods are subject to safeguard measures.
d. Inviting a hearing to the Government of the country of origin of imported goods are subject to safeguard measures;
e. Notifying the results of the investigation while f. Applying or canceling safeguard measures
g. Providing compensation to the country of origin of imports imposed safeguard measures that have been imposed.
For developing country like Indonesia, safeguard measures can not be imposed if import from our country is less than 3 percent individually or collectively less than 9 percent for each of the imports which is less than 3 percent. If we, in this country of exporters of Indonesian companies, get the safeguard action by another State, the Government, in this case the Ministry of Commerce through the Directorate of Trade Security will assist in the following areas:
a. Providing information relating to the investigation of safeguard measures to the company;
b. Coordinating with companies, relevant government agencies and other stakeholders;
c. Understanding the material substance of safeguard measures, the WTO safeguard rules and regulations that will safeguard the State safeguard action;
d. Collecting data and supporting information to make submissions / objections;
e. Following a hearing or consultation at the invitation of the State accuser.
f. Filing compensation for safeguard action that has been performed three years.
g. Together with the companies that will be subject to the safeguard measures to mobilize pressure groups in the country who will wear the safeguard measures;
h. Together with the company to bring a case to the State Institutions of Appeals or the accuser and bring a case to the WTO Dispute Geneva Institute in the event of unfair proceedings.
To safeguard the affected State, he will be compensated by the State accuser.
Compensation may be in the form of trade policies such as reduction in import tariffs on goods other than the goods which are subject to safeguard measures and also supervise the implementation of structural adjustment.
If the above mentioned trade compensation or agreed not to be implemented, then the State is accused of (which hit safeguard measures) is entitled to apply for a concession. Concession forms are to be agreed by both parties. If no
agreement can be submitted to the WTO DSB to obtain approval, a concession to the charges will be sought. This can be accused of being able to repay the state if it does not honor the agreement that has been approved.