More countries breaking WTO rules, warns report

TRADE PROTECTION: anti-dumping measures are stepped up

More countries are breaching the World Trade Organisation's (WTO) rules and its system of dealing with complaints will come under scrutiny as a result, lawyers said this week in the wake of a report by City firm Mayer Brown Rowe & Maw.

The firm's 2003 global trade protection report showed anti-dumping activities, and safeguard activity to protect against infringements, remained high last year with 417 cases (compared to 401 in 2001).

A product can be said to be dumped by an exporter if it is being introduced into the commerce of another country at less than its normal value.

But this year's figures showed a steep hike in the number of safeguard activities launched - from 53 cases last year to 132 this year.

The EU initiated the most safeguards with 21 actions launched.

Safeguards are taken as a radical measure to meet the challenge of a sudden suspected breach of WTO rules.

Trade lawyers said the numbers were suspicious, and indicated that countries might be taking safeguard actions to protect their trade without just cause.

Cliff Stevenson, Mayer Brown's London-based head of the European trade practice, said the explosion in safeguards would be challenged in a rash of disputes before the WTO.

Craig Pouncey, a competition and trade partner in Herbert Smith's Brussels office, added: 'Safeguard actions should be exceptional, taken in response to unforeseen circumstances...

they cannot be brought if the trade they harm is only a distant and unrelated risk to domestic industry.'

Mr Stevenson said this year would constitute a test for the WTO's legal procedures, which currently only seek to stop an action continuing, rather than offer damages for loss.

He said: 'It may be time that some form of retroactive remedy, enabling damages to be awarded, was implemented.'

Lode Van den Hande - a senior WTO assistant with Herbert Smith in Brussels - said: 'An injunction system could help to speed things up and make safeguards less easy to abuse.'

Jeremy Fleming