WTO Trade Remedies In Malaysia: Anti-Dumping, Subsidy, Countervailing And Safeguard Measures.

Introduction 

The evolution of international trade and governance can be traced through the development of the former provisional agreement, the General Agreement on Tariffs and Trade (“GATT”). It has then transformed into the current World Trade Organisation (“WTO”). Emerging from discussions at the 1944 Bretton Woods Conference, the idea of a global trade body had first taken shape as the proposed International Trade Organization (“ITO”). As support for ITO waned from the U.S Congress, GATT was subsequently established in 1947 as a temporary framework among 23 nations. After decades of negotiations and reforms, the Uruguay Round (1986–1994) led to the creation of the WTO in 1995, which now governs nearly all global trade and provides a more structured and authoritative system. By 2003, the WTO had expanded to 146 members— representing nearly 97 percent of global trade.¹ 

Malaysia, being a member of the WTO since 1 January 1995 and a signatory to the GATT 1947 shortly after its independence since 24 October 1957,² is committed to promoting fair and transparent trading practices and has further entered into an Agreement on Implementation of Article VI of GATT (“Implementation Agreement of Article VI of GATT”). Malaysia is thus, guided by the Implementation Agreement of Article VI of GATT with regard to the conditions, scope, and procedures for imposing trade remedies. Trade remedies would include antidumping duties, countervailing duties, and safeguard measures. All of which are designed to protect domestic industries from unfair or injurious foreign competition while adhering to international trade rules.³ 

Anti-Dumping 

Under the WTO Anti-Dumping Agreement, which was formerly known as the Implementation Agreement of Article VI of GATT, a framework is provided for member countries to address issues of dumping. Dumping occurs when goods are exported at prices below their normal value in the home market and this practice subsequently causes material injury to domestic industries in the importing country. Following the provisions of the Agreement, WTO member countries that are affected by dumping will be able to take retaliatory actions in the form of imposing a balanced anti-dumping obligation. However, an antidumping duty can be imposed by an importing country only when there is evidence that foreign firms have sold their products below normal value and that this practice has caused harm to the domestic industry.⁴ Consequently, when dumping has taken place and the importing industry is affected, an increase in price to a certain level may be undertaken by the exporting company to avoid an anti-dumping import duty.⁵ 

Building on these global rules, Malaysia has established its Countervailing and Anti-Dumping Administration to investigate and take remedial measures against unfair trade practices by foreign manufacturers or exporters.⁶ In doing so, Malaysia follows the principles recognised by the WTO and GATT, which condemn the dumping of goods into another country at prices below their normal value when such practices cause or threaten material injury to the established domestic industries. 

The Ministry of International Trade and Industry (“MITI”) considers a product to be dumped if it is sold at a price below its normal value. A product is deemed to be sold below normal value if its price is:⁷ 

1. Less than the comparable price of the like product in the course of trade for consumption in the exporting country; or, 

2. In the absence of such a domestic price, less than either: – 

1. The highest comparable price of the like product for the export country in the ordinary course of trade, or 

2. The costs of production of the product in the country of origin, plus reasonable allowances for selling costs and profits. 

Between January 2017 and June 2022, Malaysia initiated 25 anti-dumping cases according to the most recent WTO notification.⁸ As of 30 June 2022, Malaysia has 25 anti-dumping measures in force with iron and steel being the primary products that are affected. 

The practical application of Malaysia’s anti-dumping laws was recently illustrated in the Federal Court case of Menteri Kewangan & Ors v Diler Demir Celik Endustru Ve Ticaret AS⁹ (also known as Diler Iron and Steel Co Inc). The case had arisen from investigations into the import of Turkish steel sold in the Malaysian market, relating to Diler Iron & Steel Turkey Steel Imports. The Court had held that Sections 17 and 18 of the Countervailing and Anti-Dumping Duties Act 1993 must be read together to uphold the Parliament’s intent—to ensure a fair comparison between export price and normal value, which is generally determined at the ex-factory level within reasonable limits. 

Subsidies and Countervailing Measures 

The Agreement on Subsidies and Countervailing Measures (“SCM Agreement”) governs both the granting of subsidies and the countervailing measures. Both measures are what countries may apply to offset their adverse effects. According to Article 1.1 of the SCM Agreement, subsidies exist when there is a financial contribution by a government or any public body within the territory of a Member State that confers a benefit.¹⁰ On this, Article VI of the GATT 1994 and the SCM Agreement define countervailing duties as a special duty that is levied to offset any subsidy bestowed either directly or indirectly, upon either the manufacture, production, or export of any merchandise.¹¹ 

Despite these provisions, Malaysia has rarely applied countervailing duties. To date, Malaysia has not initiated any countervailing investigations reported to the WTO. This trend is similar in other Regional Comprehensive Economic Partnership members such as Singapore, Thailand, and the Republic of Korea.¹² Countervailing duties may be used sparingly because in most competitive markets, foreign subsidies benefit consumers. They are only justified in imperfectly competitive markets, where domestic producers incur losses that outweigh consumer benefits. Consequently, countries apply countervailing duties selectively, targeting cases of clear harm to domestic industries.¹³ 

Safeguard Measures 

A safeguard measure refers to a temporary tariff or quota that is imposed to protect a domestic industry from serious injury caused by a sudden surge of imports resulting from fair foreign competition.¹⁴ Unlike anti-dumping or countervailing duties, which are designed to address unfair trade practices such as dumping or subsidisation, safeguard measures may be applied even when foreign exporters compete fairly.¹⁵ Their purpose is to provide domestic industries with temporary relief and time to adjust to the impact of increased imports.¹⁶ 

Safeguard measures are governed by the Safeguards Act 2006 and the Safeguard Regulations 2007, which regulate their investigation, imposition, and revocation, with MITI overseeing such matters.¹⁷ 

Safeguard measures derive their legal authority from Article XIX of GATT. Initially, these measures were seldom used, as some governments preferred implementing “grey area” measures as an alternative.¹⁸ Nevertheless, these measures were subsequently superseded by the WTO Safeguard Agreement, which subjects any safeguarding actions to a time limit (also known as sunset clauses).¹⁹ 

Conclusion 

Coming full circle, Malaysia’s application of the WTO framework in its own laws demonstrates its commitment to upholding fair and transparent trade practices while safeguarding the interests of domestic industries. As aforementioned, though active steps have been taken in addressing dumping activities by way of anti-dumping laws, other trade remedies, such as countervailing measures have yet to be invoked. This leaves room for further development in Malaysia’s trade remedy practice. Given that the global trade dynamics will inevitably shift along with emerging challenges, Malaysia is likely to see a growing body of cases that test and refine the practical application of its trade laws and the remedies provided in ensuring fair trade practices. 

1. Crowley, Meredith A. ‘An introduction to the WTO and GATT.’ Economic Perspectives 27, no. 4 (2003), 43. 

2. World Trade Organization, ‘Malaysia and the WTO’ <https://www.wto.org/english/thewto_e/countries_e/malaysia_e.htm> accessed 27 November 2025. 

3. Ministry of International Trade and Industry, ‘Trade Remedies’ <https://www.miti.gov.my/index.php/pages/view/1672?mid=1029> accessed 27 November 2025. 

4. Crowley, Meredith A (n 1) 52. 

5. World Trade Organization, ‘Briefing note: Anti-dumping, subsidies and safeguards’ https://www.wto.org/english/thewto_e/minist_e/mc9_e/brief_adp_e.htm accessed 27 November 2025. 

6. Royal Malaysian Customs Department, ‘Malaysia National Trade Repository (MNTR)’, http://mytraderepository.customs.gov.my/en/ntm/ctp/an_dump/Pages/an_dump.aspx accessed 27 November 2025. 

7. Ibid. 

8. World Trade Organization, ‘Trade Policy Review’ (WTO, 16 June 2023) WT/TPR/S/436/Rev.1 < https://web.wtocenter.org.tw/file/PageFile/386100/WTTPRS436R1.pdf> accessed 27 November 2025. 

9. [2025] MLJU 3103. 

10. Cen, Jia Zhen, ‘Disciplining the responses to cross-border subsidies: the case study of EU and US trade remedy investigations against products from Indonesia and Thailand’ (2024) < https://digital.car.chula.ac.th/cgi/viewcontent.cgi?article=13344&context=chulaetd> accessed 27 November 2025. 

11. World Trade Organization, ‘Subsidies and Countervailing Measures” (WTO) <https://www.wto.org/english/tratop_e/scm_e/scm_e.htm> accessed 27 November 2025. 

12. Koesnaidi, Joseph Wira, and Yu Yessi Lesmana, ‘Trade Remedies Chapter’ (2022) (Jakarta: Economic Research Institute for ASEAN and East Asia) < https://www.eria.org/uploads/media/discussion-papers/FY22/Trade-Remedies-Chapter.pdf> accessed 13 November 2025. 

13. Crowley, Meredith A (n 1) 42-57. 

14. World Trade Organization (n 12). 

15. Crowley, Meredith A (n 1) 42-57. 

16. World Trade Organization, ‘Safeguard Measures’ (WTO) <https://www.wto.org/english/tratop_e/safeg_e/safeg_e.htm> accessed 27 November 2025. 

17. World Trade Organization (n 8). 

18. J. H. H. Weiler, Sungjoon Cho, Isabel Feichtner, and Julian Arato, International and Regional Trade Law: The Law of the World Trade Organization, Unit XV: Safeguard Measures (New York: NYU School of Law, 2016). 

19. Ibid.