Contingent Protection Rules in Regional Trade Agreements

Abstract

This paper examines the provisions on antidumping, countervailing duties and safeguards in seventy-four regional trade agreements (RTAs). A number of RTAs have succeeded in abolishing contingent protection measures. In addition, about half of RTAs have adopted RTA-specific rules that tighten discipline on the application of contingent protection measures on RTA members. This is most especially the case for antidumping. There is less of an impact for countervailing duty; this is likely due to the fact that the economic impact of subsidies is global and also to the absence of commitments in RTAs on meaningful curbs on subsidies or state aid. It is very difficult to offer a simple summary characterization of the provisions in RTAs. RTAs vary in size, degree of integration, geographic scope, and the level of economic development of their members. Contingent protection provisions vary greatly from one RTA to the next. In fact, contingent protection provisions differ for the same country across different RTAs. Some RTAs have additional rules; some have no rules, and other prohibit the use of these actions. Even if we focus just on the RTAs that incorporate additional rules it is hard to characterize what happens; there is no consensus set of provisions that are found in all (or even most) RTAs. The results of the mappings suggest the need to be vigilant about increased discrimination arising from trade remedy rules in RTAs. If nothing else, the complicated pattern of inclusion of these provisions threatens the delicate “give and take” balancing of incentives that is at the crux of the GATT/WTO agreements. An ongoing policy concern is that the elastic and selective nature of trade remedies may lead to more discrimination, with reduced trade remedy actions against RTA partners, but a greater frequency of trade remedy actions against non-members. The adoption of RTA-specific trade remedy rules increases this risk of discrimination, with trade remedies against RTA members being abolished outright or being subjected to greater discipline. In turn, this makes it more difficult for nonRTA members to agree to WTO liberalization as the requisite quid-pro-quo from RTA members may not be realized. Said differently, RTAs may erode the market access that non-members thought they had secured in prior WTO rounds, not primarily because of the discriminatory tariffs but rather because of contingent protection rules.