Generally speaking, the issue of whether and how EPAs should deal with trade defence mechan- isms, such as Anti-Dumping and Safeguards, has not been subject to in-depth analysis or discussion and has been raised only in connection with the EU’s Agricultural subsidies. Furthermore, the little discussion that has occurred seem to rest on some misunderstandings on what Anti-Dumping and Safeguard mechanisms are. In order to clarify some of these misunderstandings it should be stated that Anti-Dumping duties are those extra duties that an importing country may impose on specific products, when their exporting producers have dumped them in the country. Thus it is a country’s response to actions by private companies. Safeguards on the other hand are those measures a country may apply ‘to protect a specific domestic industry from an increase in imports of any product which is causing, or which is threatening to cause, serious injury to the industry’ (WTO).
Countries’ responses to subsidies provided to other countries’ export industries are called Counter- vailing Measures. The EPA literature seems to confuse Countervailing Measures with Safeguard Measures, when it is argued that ACP countries should be able to apply safeguard actions against
‘subsidised’ agricultural products from the EU. As an example a note by Oxfam writes that Pacific countries during the EPA negotiations have proposed that ‘they can challenge subsidies that cause damage to the Pacific but not vice versa. This could potentially be used to restrict the ‘dumping’ of subsidised EU agricultural exports’ (Oxfam 2006a: 10)
Based on this clarification, discussions on Anti-Dumping and Safeguard Measures within EPAs are reviewed below.
EPAs AND ANTI-DUMPING MEASURES
The issue of Anti-Dumping in EPAs has not been addressed in any detail in the existing literature.
Three reasons can be given for this: 1. Cotonou itself does not refer to the issue; 2. Anti-Dumping policy and remedies are rather technical and cannot be dealt with without considering their embodi- ment in specific ratified regulations. The final wording of EPAs has not yet been agreed, and the negotiations as such have not completed the more general stage. Thus the status of Anti-Dumping under EPAs is unclear; 3. Traditionally Anti-Dumping duties have not been used by ACP countries (South Centre 2007b), and it is not likely that EPAs will change this. Furthermore, economically speaking, Anti-Dumping is not an advisable action, especially for a small country against a large country, when it is the imposing country that will be harmed (Dunn Jr. and Mutti 2004).
Furthermore, it should be mentioned that there is a general discussion between WTO-law experts on whether Anti-Dumping and Safeguard Measures can be applied at all within a Free Trade Area.
The discussions centre on GATT Art. XXIV.8.b. which reads as ‘A free-trade area shall be under- stood to mean a group of two or more customs territories in which the duties and other restrictive regulations of commerce (except, where necessary, those permitted under Articles XI, XII, XIII, XIV, XV and XX) are eliminated on substantially all the trade between the constituent territories in products originating in such territories.’ This subparagraph explicitly lists the exceptions that can be applied in a free trade area: GATT Arts. XI (on certain import and export restrictions in the agri- cultural sector), XII (on Balance of Payments), XIII (on non-discrimination in application of quotas), XIV (on Balance of Payments), XV (on complying with IMF requirement) and XX (on general exceptions to GATT-rules). Thus ‘the absence of Articles VI [on Anti-Dumping] and XIX [on Safeguard] of the GATT in the exceptions list in Article XXIV:8 has raised the question of whether this provision mandates or allows abolition of trade remedies within customs unions and FTAs’ (Gobbi and Horlick 2006: 111). Gobbi and Horlick argue that, based on the Appellate Body’s Ruling in Turkey – Textiles, which states that ‘we note … that the terms of subparagraph 8(a)(i) provide that members of a customs union may maintain, where necessary, in their internal trade, certain restrictive regulations of commerce that are otherwise permitted under Articles XI through XV and under Article XX of the GATT 1994’ (WT/DS34/AB/R para. 48), parties in a customs union (as well as in a FTA) can only use the stated exceptions. Thus at least within that portion of trade in a FTA, which can be regarded as ‘substantially all the trade’ between the parties, they are mandated to abolish Safeguard and Anti-Dumping measures (ibid.).31
Regardless or unaware of this discussion, some reports suggest that EPAs could nevertheless allow EU to impose Anti-Dumping measures against products from ACP-countries. Against this, the Pacific and the Caribbean countries have called ‘for an EC commitment to not apply Safeguard, Anti-Dumping nor Anti-Subsidy Measures in EC – Cariforum [and Pacific region] trade’ (Julian and Makhan 2006: 6; Oxfam 2006a).
EPAS AND SAFEGUARD MEASURES
Safeguards have attracted more attention in the literature than Anti-Dumping. The reason for this is that Safeguards are explicitly addressed in Arts. 8-11 of Annex V to Cotonou, and that ACP
countries may therefore be able to initiate a dispute or to apply safeguard measures against the EU if their industries are threatened by imports from the EU. However, while the referred Articles allow EU to apply Safeguard Measures, they are silent on whether ACP countries have the same right.
Furthermore, although the Articles instruct EU to consult the ACP countries prior to the applic- ation of Safeguard Measures (Art. 9.1), they also state that ‘the prior consultations … shall not
31 The term ‘substantially all the trade’ is addressed in Chapter 3.
prevent any immediate decisions which the Community, in accordance with Article 8(1), might take where special factors have necessitated such decisions’ (Art. 9.3).
This rather one-sided provision for Safeguard Measures under Cotonou has caused NGOs and ACP countries to question the nature of any planned Safeguard regime under EPAs (Stevens and Kennan 2005a; South Centre 2007) and demand that the EU not apply Safeguard Measures in the new regime (Julian and Makhan 2006; Oxfam 2006a).
Regardless of this discussion and even if EPAs do not specify whether ACP countries may apply Safeguard or Anti-Dumping Measures, it could be argued that ACP countries as WTO-members have the right to use WTO’s Dispute Settlement Body to initiate a dispute against any other WTO- member’s actions and measures, e.g. the EU’s Anti-Dumping or Safeguard Measure (Pauwelyn 2004). However, the WTO can only address a dispute which deals with countries’ WTO obligations and not those obligations that are solely addressed in a Free Trade Agreement (see e.g. Cottier and Foltea 2006). Thus any potential claim against the EU before the WTO Dispute Settlement Body must deal with the WTO compatibility of such measures and not their EPA compatibility.
CONCLUSION
As stated above, the limited discussion that can be identified in the literature on the status of Anti- Dumping and Safeguard Measures within EPAs seem to rest on a misunderstanding. Furthermore, the current state of the WTO-law seems to require countries to abolish such measures in their Free Trade Areas. Regardless of this demand, the EPAs may inherit from Cotonou a rather imbalanced Safeguard regime, where only the EU has the right to apply such measures. This has been criticized by NGOs and ACP countries, with some justification.