Uruguay Agreement 1994

Part of the agreement concerns the application of compensatory measures for subsidized imported products. It sets out disciplines for the opening of compensation cases, investigations by national authorities and rules of evidence to ensure that all interested parties can provide information and arguments. Some disciplines for calculating the amount of a grant are described as the basis for the finding of harm to the domestic industry. The agreement would require that the assessment of the industry`s situation take into account all relevant economic factors and that a causal link be established between the subsidized imports and the alleged harm. Compensatory investigations are immediately closed if the amount of a subsidy is de minimis (the subsidy is less than 1% in value) or if the volume of imports subject to subsidies, real or potential, or the damage is negligible. Except in exceptional circumstances, the investigation will be closed within one year of its opening and, under no circumstances, within 18 months. All countervailing duties must be terminated within five years of their introduction, unless the authorities determine, on the basis of an audit, that the expiry of the right would likely result in a continuation or reappearance of subsidies and harm. The agreement sets deadlines for all protection measures. In general, the duration of a measure should not exceed four years, although it may be extended to a maximum of eight years, subject to the assertion of the continuing need by the competent national authorities and if there is evidence that the sector is adapting. Any measure imposed for a period of more than one year should be progressively liberalized throughout its lifespan. No protective measures could be re-applied to a product for which such a measure had been imposed for a period equal to the duration of the previous measure, with a non-application period of at least two years. A protection measure of 180 days or less may be re-applied to the importation of a product if, since the date of the measure on that product, it has been at least one year and such a measure would not have been applied more than twice to the same product in the five-year period immediately preceding the date of the measure`s introduction.

The GATT dispute resolution system is generally regarded as one of the cornerstones of the multilateral trade order. The system has already been strengthened and streamlined by the reforms agreed upon at the mid-term ministerial review meeting in Montreal in December 1988. Disputes currently before the Council are subject to these new rules, which include a larger automatic system for decisions relating to the institution, mandate and composition of bodies, so that these decisions no longer depend on the agreement of the parties to the dispute. The Uruguay Round Agreement on Dispute Resolution Rules and Procedures (DSU) will further strengthen the existing system and extend the largest automatic system agreed at the mid-term review to include the adoption of bodies and the results of a new appeal body.