By TIOL News Service

GENEVA, OCT 18, 2017: WTO members have shared their initial views on a Chinese proposal calling for special treatment to SMEs targeted in anti-dumping and countervailing investmentions. Members also continued reviewing a European Union proposal aimed at improving WTO disciplines on the notification of subsidies. The two proposals were discussed at October 11 informal meetings of the WTO’s Negotiating Group on Rules (NGR).

China's proposal elaborates on ideas first set out in an earlier proposal on trade remedies submitted in April. In introducing the paper, China said SMEs were important for creating job opportunities and promoting economic development and that WTO members needed to help create an environment for SMEs to facilitate their participation in international trade. However, SMEs face many difficulties and bear a heavy burden in responding to anti-dumping (AD) and countervailing (CV) proceedings, including difficulty in obtaining qualified professional assistance from lawyers or experts due to high costs. Because of their lack of experience and expertise, these proceedings often lead to unfavourable or even excessively high duty rates for SMEs, resulting in a worse-off situation for them in international trade.

While Article 6.13 of the WTO's Antidumping Agreement (ADA) and Article 12.11 of the Agreement on Subsidies and Countervailing Measures (SCM Agreement) recognize the special needs of SMEs, these provisions are insufficient to cover all the problems SMEs face, China argued. As a result, special provisions need to be written into the agreements to help SMEs further, including better access to information on trade remedy investigations, granting SMEs reasonable extensions to deadlines for submitting information to investigating authorities, providing assistance to SMEs in responding to requests for information, and ensuring that results of an investigation are not less favourable to an SME if the information for an investigation is provided to the SME's "best abilities".

While most delegations that took the floor recognized the problems faced by SMEs in participating in, or responding to, trade remedy investigations and the constraints they face, many expressed concerns about creating different legal obligations for firms depending on their size. One particular concern was the large discretion given to investigating authorities under the Chinese proposal to determine what firms qualify as SMEs; one delegation noted that an SME may be a firm with several hundred employees or less, or several thousand employees, depending on the member.

Several delegations said that, rather than creating new rules, members should look at how to make existing provisions under Articles 6.13 of the ADA and 12.11 of the SCM Agreement more effective. One delegation pointed out that it was important to look at the issues faced by SMEs not only as targets in trade remedy investigations but also as victims of unfair trading practices; another reiterated its belief that there was no common basis from which the Negotiating Group on Rules could constructively engage on trade remedies, including the issues outlined in China's latest paper.