Email: hatran@neu.edu.

vn

COURSE:

INTERNATIONAL ECONOMICS
Tel: 0918726074

MSc. Tran Hoang Ha

Department of International Economics
School of Trade and International Economics

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Hanoi, December 2023
 NON-TARIFF BARRIERS AND THE NEW PROTECTIONISM

6.1 Import quotas MAIN GOALS

• Know the meaning and effect of
6.2. Other Non-tariff Barriers and
quotas and other nontariff trade
the New Protectionism
barriers
- Voluntary Export Restraints
• Describe the effect of dumping and
- Technical, Administrative and export subsidies
other Regulations • Explain the political economy of
- Dumping protectionism and strategic and

- Export Subsidies industrial policies

• Describe the effect of the Uruguay
6.3. The Political economy of
Round and the aims of the Doha
Protectionism
Round
MSc. Tran Hoang Ha
 TARIFF QUOTA /
IMPORT QUOTAS
TARIFF-RATE QUOTA
• Although tariffs have
historically been the most VOLUNTARY EXPORT
RESTRAINTS
important form of trade
restriction, there are many
DUMPING ANTI-DUMPING DUTY
other types of trade barriers
• As tariffs were negotiated SUBSIDIES
COUNTERVAILING
DUTY
down, the importance of
TECHNICAL,
nontariff barriers was ADMINISTRATIVE,
greatly increased AND OTHER
REGULATIONS
MSc. Tran Hoang Ha
 IMPORT QUOTAS • A quota is the most important nontariff trade barrier

• Import quotas can be used to protect

a domestic industry
• The impacts of an import quota

• A quota vs. A tariff ???

• Tariff quota or tariff-rate quota

is an import management measure
with two import tax rates (in-quota tariff rate,
and out-of-quota tariff rate)

• WTO principles require the abolition of

all quantitative restrictions except
Partial equilibrium effects of an Import quota
some certain cases
MSc. Tran Hoang Ha
 VOLUNTARY EXPORT RESTRAINTS
• Refers to the case where an importing country induces another nation to reduce its
exports of a commodity “voluntarily”, under the threat of higher all-around trade
restrictions, when these exports threaten an entire domestic industry

• The impacts of VERs --- Case study 9-2 (p261-262)

• Why did US negotiate with Japan to limit the automobile exports to US?

• Why did Japan agree with the negotiation?

• What are the similarities and differences between VERs and import quotas or
import tariff?

• Would the VER on Japan reduce the share of JP’s automobile in the US market?

• What are the costs and the benefits of VERs for US and Japan?

➔ VERs were less effective in limiting imports than import quotas

MSc. Tran Hoang Ha
 DUMPING AND ANTI-DUMPING DUTY

• Dumping is the export of commodity at below cost or at least the sale of a

commodity at a lower price abroad than domestically
• Persistent dumping = continuous tendency of a domestic monopolist to maximize total profits
by selling the commodity at a higher price in the domestic market than internationally

• Predatory dumping = temporary sale of a commodity at below cost or at a lower price abroad
in order to drive foreign producers out of business, after which prices are raised to take
advantage of the newly acquired monopoly power abroad.

• Sporadic/Intermitted dumping = occasional sale of a commodity at below cost or at a lower

price abroad than domestically in order to unload an unforeseen and temporary surplus of
the commodity without having to reduce domestic prices.

•Seasonal dumping, cyclical dumping, reverse dumping

MSc. Tran Hoang Ha
 DUMPING AND ANTI-DUMPING DUTY

• Dumping is considered as an “unfair/unhealthy competitive behavior”

• Anti-dumping duty is a trade remedy → counteract predatory
dumping, protect domestic industries from unfair competition from
abroad
• Article VI General Agreement on Tariffs and Trade (GATT)
• The Agreement on Antidumping Practices (ADA) → conditions of imposing
tax and investigation procedures

MSc. Tran Hoang Ha

 DUMPING AND ANTI-DUMPING DUTY

Conditions:
𝑁𝑜𝑚𝑖𝑛𝑎𝑙 𝑃𝑟𝑖𝑐𝑒 −𝐸𝑥𝑝𝑜𝑟𝑡 𝑃𝑟𝑖𝑐𝑒
• Dumping margin ≥ 2% → Dumping margin =
𝐸𝑥𝑝𝑜𝑟𝑡 𝑃𝑟𝑖𝑐𝑒
• Importing country’s industry of similar products is damaged or is imminently
damaged (the damage must be significant)
• Cause and effect relationship
Exceptions (for developing countries)
• Export volume of exporting country does not exceed 3% total imports of similar
commodities of importing country
• Total volume of goods (originating from countries that meet the above
conditions) must not exceed 7% of the total volume of similar goods imported

MSc. Tran Hoang Ha

 DUMPING AND ANTI-DUMPING DUTY
E.g. Suppose China, Vietnam, India and Cambodia a. Can country Y file an anti-
(which are developing countries) along with many dumping lawsuit on Vietnam’s
other countries export the same product X into export of product X?
country Y. b. Can country Y file an anti-
Chinese goods account for 10% of total imports of dumping lawsuit against
goods X of Y; Vietnam and China
Vietnam, India, and Cambodia each account for c. Can an anti-dumping lawsuit
2.5% of the total import volume of goods X of Y; be filed against Vietnam,
82.5% of total imports of product X into Y come Cambodia, India and China?
from other countries.
MSc. Tran Hoang Ha
 DUMPING AND ANTI-DUMPING DUTY
Procedure:

(1) The importing country’s domestic industry files a lawsuit (with evidence)

(2) The competent authority makes a decision to initiate an investigation or not

(3) Preliminary investigation (based on information provided by related parties)

18 months
(4) Preliminary conclusion
– 2 years
(5) Continue investigation (may include on-site investigation in the exporting country)

(6) Final conclusion

(7) Apply anti-dumping duty

(8) Review anti-dumping duty every year (tax rate may be adjusted)

(9) Sunset review (5 years from the date of the decision to impose anti-dumping duty
→ decide whether to terminate or continue the tax for another 5 years)
MSc. Tran Hoang Ha
 DUMPING AND ANTI-DUMPING DUTY

WTO rules on anti-dumping duty: Code 05/2017/QH14

Foreign trade management
(1)Imposition of anti-dumping duty last no more than law
5 years from the date of decision or review
Decree 10/2018/NĐ-CP on
(2)Effective for all relevant goods imported from the Detailing some articles of
the Foreign Trade
defendant country after the issuance date
management law on Trade
(3)Anti-dumping duty also be applied on new exporters Remedy measures

(4)If domestic industry of importing country is damaged

Circulas 37/2019/TT-BCT on
significantly before the issuance of the decision, Detailing on some content of
retroactive action can be taken Trade Remedy measures

MSc. Tran Hoang Ha

 SUBSIDY and COUTERVAILING DUTY

• Export subsidies are direct

payments (or the granting of tax
relief and subsidized loans) to the
nation’s exporters or potential
exporters and/or low-interest loans
to foreign buyers to stimulate the
nation’s exports

• Export subsidies can be

regarded as a form of dumping

Partial Equilibrium effect of an export subsidy

MSc. Tran Hoang Ha
 (WTO) For industrial goods – Subsidies & SUBSIDY and COUTERVAILING DUTY
Countervailing measures agreement

Most forms of subsidies including direct

Red (light) subsidies, loans, providing subsidized inputs to
subsidies produce exports commodities, tax refund, etc.

For only one or several businesses, industries or

Amber (Yellow a certain geographical area. No significant
light) subsidies negative impact on other countries

subsidies are universal and objective. (E.g.

Green (light) subsidies for enterprise research and support for
subsidies production development in backward areas)

MSc. Tran Hoang Ha

 SUBSIDY and COUTERVAILING DUTY

Conditions:
• Subsidy margin ≥ 1% (subsidy in total value of subsidized goods)
• Importing country’s industry of similar products is damaged or is imminently
damaged (the damage must be significant)
• Cause and effect relationship
Exceptions (for developing countries)
• Export volume of exporting country does not exceed 4% total imports of similar
commodities of importing country
• Total volume of goods (originating from countries that meet the above conditions)
must not exceed 9% of the total volume of similar goods imported

MSc. Tran Hoang Ha

 https://unctad.org/en/Pages/DITC/Trade-Analysis/Non-
Tariff-Measures/NTMs-Classification.aspx

MSc. Tran Hoang Ha

TECHNICAL,
ADMINISTRATIVE
AND OTHER REGULATIONS
 TECHNICAL, ADMINISTRATIVE AND OTHER REGULATIONS
Technical Measures
→ Agreement on Technical Barriers to Trade (TBT Agreement)
→ Agreement on Sanitary and Phytosanitary Measures (SPS Agreement)
Technical Barriers to Trade (TBT) includes technical measures such as labeling,
technical standards, quality requirements and measures to protect the environment
such as conformity assessment, related to technical requirements (e.g. certification,
inspection, inspection, ...)
Sanitary and Phytosanitary measures (SPS) are restrictions on substances and
compounds to ensure food safety, and measures to prevent the spread of diseases or
pests; measures of conformity assessment, related to food safety (e.g. certification,
inspection, inspection, quarantine, etc.)
MSc. Tran Hoang Ha
 Number of non-tariff
instruments applied
by industries in 2011
(classified according
to the non-tariff
measure applied)

Note: Stock of NTMs in 2011 as reported to the WTO. Source: WTO-I-TIP. – In: Ghodsi, M., J. Grübler, R. Stehrer
MSc. Tran Hoang Ha (2016), ‘Estimating Importer-Specific Ad Valorem Equivalents of Non-Tariff Measures’, wiiw Working
 TECHNICAL, ADMINISTRATIVE AND OTHER REGULATIONS

The impact of tariff and non-tariff instruments on the export activities

of 48 LDCs to the G20 group of developed countries (2016)
MSc. Tran Hoang Ha
 TECHNICAL, ADMINISTRATIVE AND OTHER REGULATIONS

ATIGA
(17/5/2010)

Decree 116/2017/NĐ-CP
regulating conditions for
production, assembly, import and
business of automobile warranty
and maintenance services
MSc. Tran Hoang Ha
 THE POLITICAL ECONOMY OF PROTECTIONISM

Let’s liberalize
and have fun
For a successful Nope, I’d rather protect
with everyone!
economic myself from them!
development,
we need to …

MSc. Tran Hoang Ha