13 3. Estimates **of the Ex** Protection Provided by the Minimum **Prce Systenm** In<sup>Urugna</sup> In Uruguay in 1981, the government decided to balance its<sup>liberalization</sup> policies by introducing an antidumping and antisubsidy law based on GAIT rules. GAIT permits<sup>the imposition of antidumping</sup> or countervailing duties when any import affected by unfair trading practices<sup>causes actual or potential</sup> damage to domestic production activities. The difficulties<sup>that emerged from the formal procedures as</sup> well as the possible threat of retaliation by other countries soon,<sup>however, led the Uruguayan government</sup> to implement other instruments that could be more effective<sup>and allow a quicker response. First, the</sup> reference price (RP) system that had already existed as an instrument<sup>against underinvoicing</sup> of imports began to be used to counter dumping and subsidies. Then,<sup>in early 1983, a new and much more powerfuil</sup> instrument was created: the minimum export price (MEP).<sup>These instruments are the major tools of</sup> administered protection in Uruguay.

3.1 Coverag. Table 1 presents the coverage of RP and MEP<sup>protection in Uruguay in terms of the</sup> number of general non-textile products, and in terms<sup>of the number of specialized textile tariff</sup> position/items defined at the eight-digit level of the NADI<sup>classification in the case of textiles.</sup> Although measures can be revised at any point during the year, Table<sup>1 presents the coverage of the</sup> measures on an overall yearly basis. Uruguayan administered protection covers roughly 500 products and tariff positions. It is interesting to compare this figure with<sup>the total number of antidumping actions</sup> undertaken by industrial countries during the same period,<sup>which was roughly 200 antidumping actions</sup> on the part of the United States or the European Economic<sup>Community during the same period. This</sup> proportion suggests that administered protection in Uruguay is intensive by world standards.<sup>Although</sup> a more precise comparison would take into accoun **t**<sup>he size of the import flows involved and the degree</sup> of openness of the domestic economies, there is<sup>little doubt that even then, administered protection by</sup> Uruguay would still be seen as broad by world standards.<sup>Changes in coverage during the 1981-1989</sup> period differ according to the type of good involved.<sup>For nontextile products, the overall decline in the</sup> number of cases of administered prices after 1985 has been accompanied by a marked shift from the RP system to the MEP system. Textile items were subjec **t**<sup>o a much more stable system of reference prices</sup> until 1987. Since then, there has been an apparent<sup>move to reduce coverage.</sup> An altenative measure of the coverage of administered protection is the percentage of imports under the RP or MEP systems. By this standard,<sup>goods under RP or MEP actions represented rouhly</sup> 4 percent of total Uruguayan imports (oil excluded) in 1987<sup>and 5 percent in 1989. With either measure,</sup> one should always bear in mind that domestic goods<sup>under RP or MEP protection systems already benefit</sup> from higher protection than do goods that do not enjoy<sup>the additional protection of one of the two</sup>