SUBSIDY AND COUNTERVAILING

subsidy and countervailing measure

is a trade counter-measure adopted by government to offset any specific subsidy given to exporters or manufacturers of the subsidized product, and the importation of such subsidized product is causing or is Threatening to cause material injury to a domestic industry, or is materially retarding the growth or preventing the establishment of a domestic industry.

Subsidy

refers to any specific assistance (e.g., financial contribution, income or price support scheme) provided directly or indirectly by the government of the country of export or origin in respect of the product imported into the Philippines, which confers a benefit to the foreign exporter or producer of said product.

Non-actionable or Green

refer to subsidies protected from countervailing action either because they are considered to be of particular value and not to be discouraged, or because they are considered to have no, or at most minimal, trade-distorting effects or production effects.

not more than 75%. Or 50%

Assistance for research activities conducted by foreign firms or by higher education or research establishments on a contract basis with such foreign Firms if the assistance covers not more than ____________ of the cost of industrial research or _________ of the cost of pre-competitive development activity.

not be above 85%

one of either income per capita o r household income per capita, or Gross Domestic Product per capita, which must ________ o f the average for the territory concerned

At least 110%

unemployment rate, which must be ________ of the average for the territory concerned; as measured over a three-year period.

20%

Assistance to promote adaptation of existing facilities to new environmental requirements imposed by law and/or regulations which result in greater constraints and financial burden on foreign firms is limited to _____________ of the cost of adaptation.

Prohibited subsidies or Red

include export subsidies, i.e., those that are contingent on export performance, and subsidies that are contingent on the use of domestic over imported goods.

Specific Subsidy

refers to the subsidy limited to an enterprise or industry, or to a group of enterprises or industries.

Actionable Subsidies or Yellow

are those falling under the definition of

subsidy described above.

Subsidized Product

Refers to any product which is granted, directly or indirectly by the government in the country of export or origin, any kind or form of specific subsidy upon the exportation or manufacture of such product.

August 7, 1999

The RA 8751 was signed on ______

August 31, 1999

The RA 8751 took effect on ______

713

subsidized products imported into or sold in the

Philippines, were adopted in Section of the CMTA.

DA or DTI-BIS

receives the properly documented application (DTI for Industrial goods and DA for agricultural products);

Tariff Commission

conducts formal investigation and makes the final determination for purposes o f the imposition of the definitive countervailing duty; conducts the review of countervailing duty

BOC

Collects the countervailing duties

Country of Export

is the country from where the allegedly subsidized product was shipped to the Philippines, regardless of the location of the seller. The country o f export andthe country of origin may be the same, but not in all instances.

Country of Origin

where the allegedly subsidized product was either wholly obtained or where the last substantial transformation took place. The country of origin and the country of export may be the same, but not i n all instances. In case of transshipment, where a product is shipped from a third country that i s not the country where the product was manufactured or processed, the country of origin would be different from the country of export.

Domestic Industry

refers to the domestic producers as a whole o f the like product, commodity or article or to those of them whose collective output of the product.

50%

Support by domestic producers whose collective output constitutes more than _______ o f the total production of the like product produced by that portion of the domestic industry expressing either support for, or opposition to, the application.

25%

Support by producers accounting for at least_______ of the total production o f the like product produced by the domestic industry.

DA or DTI

In special circumstances, the________ may, on its own motion, initiate acountervailing action even without a written application from the domestic industry. The concerned authorities should have sufficient evidence of subsidy, injury, and causal link to justify the initiation of the investigation.

10 days from receipt

The DA or DTI-BIS has ten __________of the properly documented petition to examine the accuracy and adequacy of the petition and determine whether there is sufficient evidence to justify the initiation of an investigation.

20 days

Once a prima facie case has been established, the DA or DTI initiates the investigation and makes a preliminary determination on whether or not a provisional measure may be imposed within __________ from receipt o f the answers to the questionnaire from respondents and other interested parties.

120 days

The Commission has______ from receipt of the advice From either the DA or DTI Secretary to complete its investigation and submit its report of findings to the Secretary.

Tariff Commission

The _________ conducts the formal investigation during which it notifies all interested parties; receives representations and/or other submissions; holds preliminary conference and public consultations;and conducts on-site investigation/data verification (for both foreign and

domestic parties).

10 days

Within ________ from receipt of the affirmative final determination by the Commission, the DA or DTI Secretary shall issue a Department Order for the imposition of a definitive countervailing duty, unless the Secretary has earlier accepted a price undertaking from the foreign exporter, producer or government of the country of export or origin.

Like products, subsidy, material injury, causal link

4 elements of countervailing

Like Product

A product, commodity or article which is identical, alike in all respects, to the product

Causal link

A findings that the material injury suffered by the domestic industry is the direct result of the importation of the subsidized product.

Price depression, price suppression, price undercutting

3 modalities determining price effects

Price Depression

Refers to the extent to which the domestic producers reduces his selling price to compete with the allegedly subsidized product

Price Suppression

Refers to the extent to which the allegedly subsidized product prevents the domestic producers from increasing his selling price to a level that will allow full recovery of its cost of production

Price Undercutting

Refers to the extent to which the allegedly subsidized product is consistently sold to a price below the domestic selling price of the like product.

Provisional measures

takes the form of a security (cash deposit or bond) equal to the amount of the provisionally calculated amount of subsidy. It is applied only after the DA or DTI-BIS has made a preliminary affirmative determination and no sooner than 60 days from initiation of the case.

Definitive countervailing duty

final countervailing duty imposed, in addition to the regular duty and other charges, on a protested product imported from a specific exporter, following an affirmative final determination.

4 months

Provisional Measures shall not exceed ____________.

5 years

Definitive countervailing duty shall not exceed ______ from the date of imposition.

Voluntary undertaking

is an offer by the government of the exporting country to eliminate or limit the subsidy, or a voluntary commitment by the foreign exporter and/or the producer that they will increase their prices or will cease exporting to the Philippines at the subsidized price. An offer of price undertaking shall be made only after a preliminary affirmative determination of subsidization and injury to the domestic industry has been reached.

5 years

Price Undertaking is effective for a period of ________ unless the foreign exporter

proves to the satisfaction of the authorities that the undertaking is no longer necessary.