The Determination of Causation in the Application of Trade Remedies

Abstract

AbstractIn order for one Member to implement trade remedies against another, it must be satisfied that the harm to its domestic industry was the result of imports, rather than some other factor(s). In order for a Member to be satisfied in this way, it must perform both: (1) a causal link analysis, and (2) a non-attribution analysis. In interpreting the relevant provisions concerned with the causal link and non-attribution analysis, the Appellate Body (AB) has consistently found that injury to the domestic industry need not be the product of imports alone – that is, it may be the result of a combination of imports and other factors. Accordingly, many commentators have queried the utility of separating imports from other causal factors at the non-attribution stage. This article argues that these two apparently contradictory positions may be reconciled if they are interpreted such that the causal contribution from imports must reach a minimum threshold, whilst also providing some tolerance for other factors. This article argues in favour of using econometric tests as a means of measuring and separating the causal contributions of imports vis-à-vis other factors and allocating responsibility to each. The article concludes by proposing a three-step non-attribution and causal link analysis.