Measures to protect businesses from unfair trade and import surges

New Zealand has retained the ability to take trade remedy actions under existing WTO rules pursuant to the Anti-Dumping Agreement, Agreement on Subsidies and Countervailing Measures and the Safeguards Agreement.

The ASEAN FTA also establishes an additional safeguard mechanism under which any Party can either temporarily suspend tariff reductions or increase the tariff rate if there have been increased imports of a product as a result of the tariff reductions being carried out under the FTA and such increases have caused serious injury to a domestic industry.

The Safeguard Mechanism

The ASEAN FTA provides for the imposition of a safeguard measure on imports during the period that tariffs are being phased out or reduced for any particular good, and for up to three years beyond that. A measure can be imposed by any Party to the ASEAN FTA to address situations of serious injury to a domestic industry caused by increased imports as a result of tariff reductions under the FTA by either suspending further tariff reductions or reverting to higher tariffs for a certain period.

To apply a safeguard measure New Zealand would have to undertake an investigation, publish the findings and only suspend tariff reductions or increase the tariff to the minimum extent necessary to prevent or remedy the injury being caused and to facilitate adjustment to import competition.

In no case could New Zealand increase the tariff beyond the lesser of the MFN rate that applied on either entry-into-force of the FTA or at the time a measure was imposed. New Zealand would also have to progressively liberalise the measure at regular intervals if it was imposed for more than one year.

New Zealand would have to provide compensation to the other Parties whose exports are subject to the measure in the form of either equivalent tariff concessions or offsetting other obligations under the ASEAN FTA equivalent to the measure imposed. But if New Zealand was unable to agree on compensation with the affected Parties, those Parties have the right to suspend equivalent tariff concessions on New Zealand's exports, except that this right cannot be exercised for the first two years a measure is in place if it was imposed as a result of an absolute increase in imports.

Any ASEAN country that proposed to apply a safeguard measure on imports from New Zealand is subject to the same requirements.

In New Zealand, the Ministry of Economic Development is responsible for conducting any safeguard investigations pursuant to the ASEAN FTA.

The purpose of the safeguard mechanism is to allow a domestic industry some time to adjust to increased import competition arising from the implementation of the ASEAN FTA.