Mauritius: Mauritius's Trade Act Of 2022: Part 3 – Safeguard Measures

Trade Remedies in Mauritius

This article is the final of a series of three analysing Mauritius's Trade (Anti-Dumping, Countervailing and Safeguard Measures) Act of 2022. As highlighted in Part 1,¹ trade remedies are trade policy tools used to address 'unfair' or 'distortive' trade practices. In addition to establishing a dedicated Trade Remedy Investigating Authority (TRIA), the Trade (Anti-Dumping, Countervailing and Safeguard Measures) Act of 2022 completes the trade remedy framework for Mauritius by incorporating, for the first time, safeguard measures in the domestic legislation. This short article highlights the key aspects of the new legislation with regards to safeguards, focusing on the process, steps, and timelines for the private sector to use this particular trade remedy in Mauritius.

Safeguard Measures: Overview

Safeguards are temporary measures that a government can impose to restrict imports when a particular industry is affected by an unforeseen surge in imports caused by unfair trade practices or other factors and when this surge in imports causes or threatens to cause injury to the domestic industry.

Following the WTO's Agreement on Safeguards, Article 35(1) of the 2022 Trade Act stipulates that "In determining serious injury or a threat of serious injury, the Authority shall evaluate all relevant factors of an objective and quantifiable nature having a bearing on the situation of that industry, in particular, the rate and amount of the increase in imports of the product concerned in absolute and relative terms, the share of the domestic market taken by increased imports, changes in the level of sales, production, productivity, capacity utilisation, profits and losses, and employment." Article 79(7) of the Act further defines the period used during the safeguard investigation to determine if there has been a significant increase in imports or injury as follows:

1. Significant increase in exports: not less than three, and not more than five years, and;
2. Injury: not more than 3 years.

According to the Trade Act, a safeguard measure can take the form of a duty, a quota or a tariff quota. The duties or tariff quotas will be administered by Customs, while quotas on a product will be managed by the Minister of Commerce. These measures will apply on imports of the concerned product from all sources other than developing countries. Following the WTO's Agreement on Safeguards, Article 101(4) of the Trade Act stipulates that "No safeguard measure shall be applied against a product originating in a developing country as long as its share of imports of the product concerned in Mauritius does not exceed 3 per cent of the import volume during the original investigation period, provided that developing countries with less than 3 per cent import share collectively account for not more than 9 per cent of total imports of the product concerned."

Safeguard Investigation

Article 45 of the Trade Act specifies that the application to initiate a safeguard investigation must be made to the Authority by, or on behalf of, a domestic industry, and it must include evidence of:

1. Unforeseen developments;
2. GATT 1994 obligations (such as tariff liberalisation schedules);
3. Increased imports;
4. Injury; and
5. Causal link.

The information required in the application is summarised in the table below.

Source: Articles 35 and 45 of the 2022 Trade Act

Upon receipt of the request, and unless the application is withdrawn by the applicant, the TRIA has 30 calendar days to decide whether to initiate an investigation (Article 49 of the Act), on the basis of:

1. The accuracy and adequacy of the evidence presented,
2. The additional information that the TRIA might request, and
3. The sufficient evidence of unforeseen developments, concessions under GATT 1994, injury and causal link.

Article 47 of the Act requires the TRIA to avoid publicity on the application for a safeguard investigation unless a decision has been made to initiate the investigation. Article 50 of the Act also specifies that the TRIA may self-initiate a safeguard investigation without having received an application by or on behalf of the domestic industry based on sufficient evidence of increased imports as a result of unforeseen developments and concessions, injury and causal link. Article 83 of the Trade Act also provides for verification visits as deemed necessary by the TRIA before the initiation of a safeguard investigation in order to verify the accuracy of information submitted.

When the TRIA decides to initiate an investigation, a notice must be issued to all relevant stakeholders (importers, representative associations of importers and representatives of exporting countries that have a substantial interest in the product, the applicant, other domestic producers and other interested party known to the Authority to have an interest in them) and must also be published in the Government Gazette (Article 52 of the Act). The Act specifies that the initiation of the investigation shall be effective on the date of the publication of the notice in the Gazette. Furthermore, the Act requires that the TRIA informs the WTO Committee on Safeguards of the initiation of the investigation as soon as it is published in the Gazette. Article 53 of the Act also states that as soon as the safeguard investigation is initiated, the TRIA has the obligation to provide the full text of the written application to any interested party upon request.

Upon the initiation of an investigation, the TRIA will disseminate questionnaires to stakeholders that it considers necessary, giving a maximum of 30 days for them to respond. Any information received after this deadline will only be considered if the interested party who intends to participate in the investigation makes itself known to the TRIA within 20 days from the date of initiation of the investigation.

The TRIA has a maximum of 120 days after initiation of the investigation to issue a preliminary determination of unforeseen developments, GATT 1994 obligations, increased imports, injury and causal link, which shall be submitted to the Minister of Foreign Affairs, Regional Integration and Trade (hereafter referred to as 'The Minister') and be made public. This preliminary determination shall contain information about the description of the investigated product, the factors that have led to the determination of increased imports, injury and causal link, including information on factors, other than the increased imports taken into account; and the amount of any provisional measures to be applied and the reasons why such provisional measures are necessary to prevent injury during the investigation. The law also requires that a notice, which includes a copy of the preliminary determination, be sent to the WTO Committee on Safeguards before any provisional safeguard measure is imposed.

Article 92(4) of the Act stipulates that a provisional safeguard measure shall apply for a maximum period of 200 days and shall also be counted as part of the duration of safeguard measure. According to Article 82 of the Act, the TRIA has to allow consultations on a provisional measure by countries having a significant interest in the investigated product. Countries should enter into such consultations no later than 30 days after the notice is sent to the WTO Committee on Safeguards.

The TRIA has to make a final determination within 150 days of the preliminary determination. In the case where the determination is not to impose a definitive safeguard measure, the TRIA has to publish this decision in the Government Gazette. If the TRIA determines that it is necessary to impose a safeguard measure, it has to notify the WTO Committee on Safeguards of the final injury determination and any proposed safeguard measure. According to the law, the TRIA also has to provide for consultations with governments of countries that have a significant interest in the investigated product to discuss the form, level duration and liberalisation of the proposed safeguard measure. Such consultations need to be finalized within 30 days of submission of the notification of the proposed measure to the WTO Committee on Safeguards.

As is the case with the preliminary determination, the TRIA has to give notice of the final determination in the Government Gazette, including a summary of the information which has led to the determination comprising of an overview of the factors that have led to the determination of unforeseen developments, increased imports, injury and causal link as well as the proposed safeguard measure, including its form, level, duration and liberalisation schedule. The law also requires the TRIA to prepare a report with details of all issue of fact and law considered in the final determination made. The copy of the notice of the final determination as well as the report have to be forwarded to the WTO Committee on Safeguards and all participating interested parties.

According to the Act, provisional and definitive safeguard measures will only apply to products which enter Mauritius for consumption on or after the date of publication of an affirmative or final determination following the investigation. Furthermore, a safeguard measure can be imposed for an initial period of a maximum of four years, including the duration of any provisional safeguard measure that was imposed. This follows Article 7 of the WTO Agreement on Safeguards. The Minister may extend this period if:

1. The TRIA determines in a review finalised before the lapse of a safeguard measure that the measure continues to be necessary to prevent or remedy serious injury;
2. There is evidence that the industry is adjusting;
3. Mauritius endeavours to maintain a substantially equivalent level of concessions and other obligations to that existing under GATT 1994 between it and the exporting countries that would be affected by such a measure and agrees with affected exporting countries on any adequate means of trade compensation for the adverse effects of the measure on their trade.;
4. Appropriate consultations are held; and
5. Appropriate WTO notification procedures are followed.

If the duration a safeguard measure exceeds three years, the TRIA has to conduct a mid-term review and when appropriate, the TRIA has to recommend to the Minister the withdrawal of the measure or the plan to speed up the liberalisation. Finally, Article 113 states that a safeguard measure cannot be reapplied to the import of a product which has been subject to a measure for a period of time equal to half of that during which such a measure had been previously applied, provided that the period of non-application is at least two years. Furthermore, a safeguard measure with a duration of 180 days or less may be applied again to the import of a product if at least a year has elapsed since the safeguard measure was imposed and the safeguard measure has not been applied to the same product more than twice in the five-year period immediately preceding the date of introduction of the measure.

In any case, it is worth highlighting that the country, in adopting safeguard measures, must ensure that the affected countries maintain a substantially equivalent level of concessions. To achieve that, Mauritius may agree with affected exporting countries on any adequate means of trade compensation for the adverse effects of the measure on their trade (Article 114).

The addition of safeguards to the trade remedy legislation in Mauritius is important for the local industry in Mauritius which has been faced with surging imports over the past decade. Safeguards will provide the private sector with an additional buffer as they try to cope with commercial challenges. The Government of Mauritius has also been focused on revamping the manufacturing sector in Mauritius and safeguards can support the implementation of the national policies in this regard.

International Economics Consulting Ltd (IEC) is an independent consultancy firm working with national and international development partners, governments, and the private sector to create value and promote sustainable growth and development. With extensive experience in trade policy, research and negotiations, IEC can support governments and businesses deal with unfair trade practices and unforeseen consequences of free trade by providing analytical expertise and support.

References

The Trade (Anti-dumping, Countervailing and Safeguard Measures) Act 2022, https://mauritiusassembly.govmu.org/Documents/Acts/2022/act1922.pdf

Footnote

1. Baker, P., Quiles, P. & Bheenick, S. (2023). Mauritius's Trade Act Of 2022: Part 1 - The New Trade Remedy Investigating Authority. Mondaq, January 16. Available from: https://www.mondaq.com/international-trade-amp-investment/1271242/mauritiuss-trade-act-of-2022-part-1---the-new-trade-remedy-investigating-authority

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.