Antidumping and other traderemedy laws Trade-remedy laws offer another means of regulating trade at the border. The most significant of the...
Antidumping and other traderemedy laws Trade-remedy laws offer another means of regulating trade at the border. The most significant of these is the antidumping statute, a mechanism by which countries may impose additional duties on imports that may be found to be sold at less than fair value. A related instrument is the countervailing duty (CVD), used to impose penalty tariffs on products that are found to benefit from subsidies. While the number of countries that employ antidumping laws is on the rise, the CVD law is less frequently invoked. Countries are even less inclined to impose restrictions under safeguards, which are intended to deal with imports that are fairly traded but still considered to be injurious. The safeguard laws were often invoked in the concluding decades of the twentieth century, especially by developed countries, but the mechanism has only rarely been used since the conclusion of the Uruguay Round. The reforms agreed to in those negotiations have made it extraordinarily difficult for any country to win any challenges to safeguard measures that are brought to the WTO’s Dispute Settlement Mechanism.
The antidumping law had once been seen primarily as a means by which developed countries restricted imports from developing countries, but that has changed. WTO members reported imposing 3,058 antidumping orders from 1995 through 2014. The European Union and the United States collectively accounted for 643 orders, or 21.0 per cent of the total, but the two largest users of antidumping laws among the developing countries — Argentina and India — had 762 orders of their own (i.e. 24.9 per cent of the total).11 There were altogether 48 developing countries subject to antidumping orders during this period, but that includes 9 countries that were subject to just 2 or 3 orders each, and 14 that faced just one order. China was the target of the greatest number — the 759 antidumping orders against that country constituted 24.8 per cent of the total — while other large, Asian economies attracted many of the others. Nearly half of all orders (1,497) were imposed on China, India, Indonesia, the Republic of Korea, Taiwan Province of China and Thailand. The data in tables 13 and 14 show the relative frequency with which different developing countries have either been senders or receivers under the antidumping law. The two tables confirm a general relationship between the size of a developing country and its propensity to be on either side of these transactions. China and India, for example, top the lists in both respects. There are only a few exceptions to this general rule, including two countries that imposed no orders but were subject to at least one (i.e. Israel and Zimbabwe), and four countries that imposed orders on others but were not subject to any (i.e. Costa Rica, Jamaica, Morocco and Nicaragua). The data show that 31 developing countries have imposed antidumping orders since 1995 and that another 24 have taken steps towards doing so. That leaves nearly 100 developing countries that neither conduct investigations nor impose orders. As a result of its SACU membership,
Botswana must apply trade defences adopted by South Africa’s International Trade Administration Commission (ITAC) on behalf of SACU, and Botswana in particular. In 2013 Botswana issued the Botswana Trade Commission Act, which aims to create an organism responsible for trade remedies, the Botswana Trade Commission … [that] is still in the process of being established. Trade Policy Framework: Botswana (2016) 30 TRADE POLICY FRAMEWORKS FOR DEVELOPING COUNTRIES: A MANUAL OF BEST PRACTICES Table 13. Antidumping orders imposed on developing countries, 1995–2014 Source: Calculated from WTO data posted at https://www.wto.org/english/tratop_e/adp_e/adp_e.htm. Africa and the Middle East Americas Asia and the Pacific Subject to 100+ orders — — China, India, Indonesia, Republic of Korea, Taiwan Province of China, Thailand Subject to 11–100 orders Saudi Arabia, South Africa, United Arab Emirates Argentina, Brazil, Chile, Mexico, Venezuela (Bolivarian Republic of) Hong Kong (China), Iran (Islamic Republic of), Malaysia, Singapore, Turkey, Viet Nam Subject to 1–10 orders Algeria, Egypt, Israel, Jordan, Kenya, Kuwait, Libya, Malawi, Nigeria, Oman, Qatar, Zimbabwe Colombia, Cuba, Dominican Republic, Ecuador, Guatemala, Honduras, Paraguay, Peru, Trinidad and Tobago, Uruguay Bangladesh, Macao (China), Nepal, Pakistan, Philippines, Sri Lanka Table 14. Antidumping activity by developing countries, 1995–2014 Source: Calculated from WTO data posted at http://www.wto.org/english/tratop_e/adp_e/AD_InitiationsByExpCty.xls and http://www.wto.org/english/tratop_e/adp_e/AD_MeasuresByRepMem.xls. Africa and the Middle East Americas Asia and the Pacific 100+ orders imposed South Africa Argentina, Brazil China, India, Turkey 11–100 orders imposed Egypt, Israel Colombia, Mexico, Peru, Venezuela (Bolivarian Republic of) Indonesia, Republic of Korea, Malaysia, Pakistan, Philippines, Taiwan Province of China, Thailand 1–10 orders imposed Morocco Chile, Costa Rica, Dominican Republic, Guatemala, Jamaica, Nicaragua, Paraguay, Trinidad and Tobago, Uruguay Singapore, Viet Nam 10+ investigations but no orders Saudi Arabia, United Arab Emirates — Hong Kong (China), Iran (Islamic Republic of) 1–10 investigations but no orders Algeria, Bahrain, Jordan, Kenya, Kuwait, Libya, Malawi, Mozambique, Nigeria, Oman, Qatar Cuba, Ecuador, El Salvador, Honduras Bangladesh, Democratic People’s Republic of Korea, Macao (China), Nepal, Sri Lanka The options are limited for developing countries that are targeted by antidumping laws. Legal defence against these cases can be quite costly, both in the country where the case is originally brought and (if a challenge is made) in the WTO, and those expenses are usually borne by the exporting firm. Sometimes an exporter will be so intimidated by the costs that it will opt to leave the market altogether. Negotiators from developing countries have sought reforms in these laws, but have so far achieved little progress in that direction. Simply stated, the antidumping laws of the developed countries are one of the most damaging exceptions to the general rule by which those countries have reduced their barriers to trade to a fraction of what they once were. Should those developing countries without antidumping laws of their own emulate the practices of larger countries? While legitimate concerns may arise over potentially unfair import competition, it does not necessarily follow that the antidumping law is the best response. It might require a half dozen or more highly trained professionals (as well as a substantial budget for travel and other expenses) to carry out the responsibilities of a national antidumping law. This is not something that can be done “on the III. INSTRUMENTS OF TRADE POLICY 31 cheap,” as any findings of an antidumping authority can be challenged by a country’s trading partners in the WTO. It can be quite expensive for a country to ensure not only that its antidumping investigations are properly conducted, but that the results are effectively defended from any legal challenges that might follow. Whatever time and manpower a country might devote to the establishment and operation of an antidumping unit might be better used in some other function of the trade ministry. One exception to this general rule comes in the case of regional organizations that may take on this function on behalf of their member States. Botswana, for example, is developing its own capabilities in conjunction with the Southern African Customs Union (SACU). Similar points may be made with respect to CVD law. As can be seen from the data in tables 15 and 16, compared to the antidumping law, this option is much less frequently invoked by or against developing countries. Only 22 developing countries were subject to CVD orders during 1995–2014, and India was the only one facing more than 10 orders. Ten developing countries imposed CVD orders of their own, while four others conducted investigations without imposing orders
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