Trade Practices Section
The Trade Practices Section plays a key role in upholding the principles of equitable international trade by investigating and addressing unfair trade practices.
It formulates and enforces trade remedy policies to address injury caused by dumped and subsidised imports, in accordance with the Countervailing and Anti-Dumping Duties Act 1993 (Act 504). To safeguard domestic industry from serious injury resulting from a sudden surge of imports into the country, the Trade Practices Section also performs similar functions under the Safeguard Act 2006 (Act 657).
In addition, the Trade Practices Section defends the interests of domestic industries in trade remedy investigations initiated by other countries against Malaysia. This is to ensure that such investigations are conducted in a manner that preserves fair competition and market stability, in line with Malaysia’s obligations under the World Trade Organization (WTO) Agreements.
Dumping
Dumping occurs when foreign producers or exporters sell goods in an overseas market at an export price significantly lower than the normal value, which is the price of the goods in the domestic market of the exporting country. This practice can harm domestic industries producing like products in the importing country by disrupting fair market competition.
To address this, anti-dumping measures are implemented to mitigate the injurious effect of dumped imports and to restore fair competition in the domestic market.
Anti-dumping measure may take the form of ad valorem duties (a percentage of the value), specific duties (a fixed amount per unit), or price undertakings where exporters commit to sell the goods at or above a certain minimum price.
Countervailing
Unfair and unreasonable subsidies granted by foreign governments can distort fair competition in international trade. Industries receiving such subsidies often gain a competitive advantage, enabling them to export goods at prices lower than those of similar goods produced by domestic industries in the importing country.
This pricing disparity can harm the domestic industry, as it undermines local producers’ ability to compete fairly. To address this, countervailing measures—in the form of duties—are imposed to offset the impact of these subsidies and to restore fair competition in the marketplace.
Safeguard
A sudden and sharp surge of imports—whether in absolute terms or relative to domestic production—may warrant the imposition of safeguard measures if such an increase occurs under conditions that cause, or threaten to cause, market disruption and serious injury to the domestic industry producing like products or directly competitive products.
Safeguard measures are temporary actions applied only to the extent necessary to prevent or remedy serious injury, and to facilitate the adjustment of the affected industry to changing market conditions.
Safeguard measures may take the form of an increase in customs duties, additional financial liabilities, quantitative restrictions or any combination of these instruments.
