Domestic and Multilateral Forums for the Judicial Review of U.S. Trade Remedy Determinations: Complementary or Conflicting?

Abstract

I. Introduction Trade remedies such as antidumping and countervailing measures are the most popular policy instruments employed by countries to protect their domestic industries from “unfair” foreign competition. The Agreements on Antidumping (the “AD Agreement”) and on Subsidies and Countervailing Measures (the “SCM Agreement”) of the World Trade Organization (WTO) permit the use of such remedies as an exception to the general WTO principles of non-discrimination and tariff bindings. However, the use of trade remedies is subject to substantive and procedural restrictions aimed at preventing their potential misuse for protectionist reasons. Trade remedies may only be applied when the competent national authorities determine that there are dumped or subsidized imports causing material injury to the domestic industry. Such determinations can also be challenged domestically through tribunals designated for this purpose and/or multilaterally through the WTO dispute settlement system. Domestic tribunals typically apply domestic trade remedy legislations, but these legislations are substantially similar to the provisions of the relevant WTO Agreements. The major difference between domestic and multilateral judicial review of trade remedy determinations is procedural. The question arises, therefore, whether these procedural differences make the two forums complementary or competing. This chapter sets out to address this question by exploring some of the key procedural differences, namely, standing, standard of review and remedies, between the domestic and multilateral forums for the judicial review of trade remedy determinations. The chapter proceeds as follows. Part II presents some of the key issues in trade remedy determinations. The use of trade remedies is a controversial issue in international trade. While some argue that trade remedies constitute unnecessary barriers to international trade, others contend that trade remedies play an important role in promoting fair international trade and competition. The AD and SCM Agreements represent attempts to reconcile these concerns. While they allow the use of trade remedies, they limit their use by imposing extensive substantive and procedural restrictions. These restrictions will be outlined in this Part to provide the necessary context for the discussion on the judicial review of trade remedy determinations. The term ‘trade remedy determinations’ refers to three types of investigations carried out by domestic authorities to impose import restrictions for the purpose of protecting domestic industries from unfair foreign competition: safeguards, antidumping and countervailing measures. The focus of this chapter is, however, limited to antidumping and countervailing determinations. Antidumping and countervailing measures address different challenges; antidumping duties are aimed at addressing the practice of dumping whereby foreign producers/exporters sell their product in the domestic market at a price below production cost or below the normal price at which the product is sold in the home market, whereas countervailing duties are intended to offset the unfair competitive advantage that foreign producers enjoy over domestic producers because of government subsidies. Nevertheless, they are very similar trade policy instruments. Both are used to shield domestic industries from the effects of foreign dumping/subsidy by imposing tariffs in addition to ordinary customs duties on the dumped/subsidized imports. Since the procedure for the determination and judicial review of both antidumping and countervailing duties are very similar, they are treated together in this chapter. Part III is divided into three sections. The first section deals with the reasons for and the legal basis of the judicial review of trade remedy determinations. The second section provides an overview of the alternative forums for the judicial review of trade remedy determinations. With respect to the domestic judicial review, the chapter focuses on the judicial review of trade remedy determinations in the United States. The United States is by far the most active user of trade remedy instruments. Moreover, challenges against United States trade remedy determinations are frequent both in domestic courts and in the WTO. 46 of the 109 antidumping cases and 24 of the 37 countervailing cases brought before the WTO dispute settlement system as of July 2016 were against the United States. The third section of Part III compares the domestic judicial review of trade remedy determinations with multilateral judicial review focusing on standing, standard of review and remedies. Part IV sums up the discussion in the form of conclusion.