Research and analysis

Trade Remedies Authority Areas of Research Interest

Published 3 July 2023

About the TRA

The Trade Remedies Authority (TRA) is an executive non-departmental public body, sponsored by the Department for Business and Trade.

We investigate whether new trade remedies are needed to prevent injury to UK industries caused by unfair trading practices such as dumped and subsidised goods and unforeseen surges in imports. Our work helps to create a level playing-field for UK industries.

Our vision is to be a globally respected trade remedies body.

Our mission is to defend UK economic interests against unfair international trade practices.

Our Corporate and Business Plan 2023 to 2026 sets out what we are focusing on to achieve this and outlines the TRA’s strategic direction.

Trade remedies are important safeguarding mechanisms where there are perceived abuses in the enforcement of the global rules-based system. Trade remedies can only be applied under specific circumstances as set out in relevant World Trade Organization (WTO) Agreements and UK legislation.

Areas of Research Interest

This document sets out the key areas of research that are important to the TRA to support its work on undertaking evidence-based investigations. Our areas of research interest reflect evolving priorities, developments and international trends in the area of trade remedies in the UK and across the world.

We are interested in existing evidence and best practice and we would also like to stimulate further engagement with experts, practitioners and researchers on these themes as a way of encouraging new research going forward.

Below are our main areas of research interest grouped under a few distinct themes.

1. Monitoring and evaluating the impact of trade remedies:

Understanding the impacts of trade remedies measures will allow us to make informed decisions as to the measures to put in place in future, as well as have informed conversations with our stakeholders about what they can expect to happen when we put the measures in place.

1.1 What is the impact of trade remedy measures on the volume and the value of trade subject to these measures? Does the impact differ significantly depending on the: (a) industry; (b) exporting country; (c) importing country; and (d) stage of the business cycle?

1.2 What are the effects of trade remedy measures on business decision making, including decision to enter or exit the market, decision to scale up or scale down production, and new investment and expansion plans?

1.3 What are the effects of safeguard measures on industries and their operating incentives? To what extent do safeguards allow industries to adjust as intended, allowing for measures to be removed over time?

1.4 What is the impact of trade remedy measures on the incidence of tariff-jumping Foreign Direct Investment (FDI), where the motive for inward FDI is to avoid incurring trade costs such as tariffs?

1.5 When considering analytical techniques that could be used to evaluate the impact of trade remedies, identifying suitable controls and overcoming endogeneity issues is likely to be challenging since trade remedy measures are small in number and heterogenous in nature. Are Synthetic Control Methods an appropriate analytical technique? What other options are available and how do they compare with the Synthetic Control Methods?

2. Circumvention of trade remedies:

The TRA can undertake circumvention reviews to extend the scope of existing trade remedies measures in order to counter any activities that are being undertaken by exporting businesses to avoid the measure. A better understanding of when this is likely and how to tell whether it is happening will allow us to target our efforts more effectively.

2.1 Are exporting businesses more likely to attempt to circumvent trade remedy measures, or are they more likely to seek new commercial and new market opportunities? Is this preference likely to be country-specific, industry-specific or firm-specific?

2.2 How do we tell the difference between circumvention by trans-shipment, and legitimate trade diversion and deflection to the same third country?

3. Market distortions in trade remedy investigations:

Market distortions are commonly viewed as any interference that significantly affects costs, prices or market behaviours. They can be caused by a range of factors, including market structure, imperfect information, behaviour of market participants and government intervention. A Particular Market Situation (PMS) is the most relevant type of distortion for trade remedies. As part of a PMS assessment, the aim is to determine whether an exporter’s prices are distorted by a PMS to the extent that they do not permit a proper comparison. In some instances, distortions can also constitute a countervailable subsidy. We are interested in how the approach to treating market distortions across trade remedy investigating authorities has evolved over time.

3.1 Some WTO members are increasingly using the tools available under the Anti-Dumping Agreement (ADA) to address state intervention in economies as part of their trade remedies investigations. This includes a range of countries including People’s Republic of China and other socialist market economies. How has their practice, in particular the use of Particular Market Situations defined in Article 2.2 of the ADA, evolved over time?

3.2 Economic Free Zones / Special Trade Zones often involve subsidies in the form of direct investment, preferential access to finance and exemption to taxes. Investigating authorities could address these through a countervailing duty but could also, potentially, address them through anti-dumping provisions. How has international practice in this area evolved and do the different approaches lead to materially different outcomes?

4. Economic Interest Test:

The Economic Interest Test (EIT) enables the TRA to assess whether it is in the UK’s economic interest to impose a trade remedy measure. This includes impacts throughout the supply chain including consumers, impacts concentrated within geographical areas and impacts on the competitive environment. We would like to explore potential ways in which our EIT analysis could be made more rigorous with further quantification of economic impacts.

4.1 What are the estimates of tariff pass-throughs for trade remedy measures? Does the estimate change depending on: (a) the level of the duty; (b) whether the duty is imposed or revoked; (c) the product and supply chain?

4.2 To what extent could partial equilibrium modelling tools play a role in assessing the likely impacts of trade remedies measures as part of the EIT?

4.3 Considering the potential benefits of trade remedies in avoiding job losses, what evidence is there of employment multiplier effects for UK industries that frequently benefit from trade remedies, for example, steel, glass and ceramics? How does this compare against similar countries? Does the multiplier change depending on whether jobs are being created or lost?

5. The use of trade remedies:

As a trade remedy investigating authority, we want to understand the relevant economic trends and other drivers that are likely to affect our future work so we can be better prepared to defend UK economic interests against unfair international trade practices.

5.1 What are the products, sectors and countries that tend to be active users of trade remedies around the world? Are there any shared characteristics or underlying drivers that explain why they may be more likely to use trade remedies?

5.2 Which UK sectors are most vulnerable to dumping? What are the characteristics that make them more vulnerable to dumping?

5.3 Which overseas exporting industries are more likely to engage in dumping onto the UK market? When might it be rational for them to do so?