World Trade Organisation (WTO) Remedies In Malaysia

• Published date: 10 January 2023
• Subject Matter: International Law, International Trade & Investment
• Law Firm: Azmi & Associates
• Author: Mr Philip Teoh and Gabrielle Lim Wai Yee

Introduction

Established in 1995 and based in Geneva, Switzerland, the WTO is the successor to the General Agreement on Tariffs and Trade (GATT), a group founded in 1948 whose rules created the modern multilateral trading system. With the US adversarial Trade Wars introduced by President Trump and the Trade Conflict between Australia and China, the relevance of the World Trade Organisation ("WTO") is increasingly being questioned. Nonetheless the WTO has introduced the global rules of trade.¹

The WTO permits members to impose trade remedies or trade defence measures against imports to protect their domestic industries from unfair practices such as dumping and subsidies, or to cope with a sudden surge of foreign goods². The WTO trade remedies are instruments to safeguard and defend the interest of domestic industry from unfair trade practice, which have been incorporated by many countries into domestic law including Malaysia.³ Unfair trade practice comes in different forms. In 2021, the US accused China of unfair trade practices such as preferential treatment for state business.⁴

Malaysia has been a member of WTO since 1 January 1995 and is also a signatory to the General Agreement on Trade and Tariff ("GATT") shortly after gaining its independence since 24 October 1957. With that, this article focuses on the trade remedies offered by the WTO and how the remedies are then incorporated into the Malaysian law.

WTO Trade Remedies

The WTO put in the effort to ensure that trading is done fairly and openly by having tariffs and other forms of protection.⁵ The kind of protection can be in the form of trade remedies. It is permitted under the WTO is to protect local industries from unfair trading are anti-dumping, subsidies and countervailing measures and safeguard measures. These focused trade remedies aim to prevent unfair trading within the international trade between countries. It allows for member states to challenge another member state which is thought to be breaking the rules by imposing limits for unjustified reason.⁶

There are no WTO laws at the moment that governs unfair trading per se, however, there are a set of rules in relation to this matter.⁷ As the names suggests, these rules aim to protect against unfair trade especially dumping and subsidisation. As of 31 December 2021, WTO members referred 607 disputes to the Dispute Settlement Body.⁸ Between 1995 and 2021, more than 479 panel reports were circulated to advance the settle of the 607 disputes.⁹

Malaysian Laws Governing Trade Remedies

The relevant legislation that governs the trade remedies in Malaysia are the Countervailing and Anti-Dumping Duties Act 1993 ("CADDA") accompanied with the Countervailing and Anti-Dumping Duties Regulation 1994 ("CADDR"). As the name of the legislation suggest, this Act governs the investigation and determination of dumping, imposition of duties to offset such dumping and anything in relation to dumping.¹⁰ It was then amended by virtue of the Countervailing and...