Trade Remedy Actions by WTO Members: A Cause for Concern or a Reflection of Improved Market Access?

Abstract

The first countervailing duty law dates from the late nineteenth century when the US enacted a law to address sugar subsidies provided by Russia. Canada enacted the first anti-dumping law in 1904, and the US introduced the right to use safeguard measures in the US-Mexico reciprocal trade agreement of 1942. In the late 1940s, these trade remedies were included in the General Agreement on Tariffs and Trade (GATT). Before 1995, however, their use was mainly limited to developed countries at the forefront of trade liberalization. Before the Uruguay Round, many countries had made only limited tariff bindings and had little need for trade remedies to address import problems. Since the Uruguay Round, which established the World Trade Organization (WTO) in 1995 and required all Members to bind the vast majority of their tariff lines, many more countries have found trade remedies to be a necessary tool to address import problems. Over the first eighteen years of the WTO's existence, the number of users of trade remedies (antidumping, countervailing duty, and safeguard actions) has increased and these measures are now used by both the traditional users of such remedies (e.g., US, EU, Canada, Australia) and by new users (e.g., India, Argentina, Brazil, China, Turkey, Egypt). Some ask whether the use of the internationally negotiated trade remedy tools within the WTO by a wide range of countries (both old and new users) is a cause of concern or a positive sign. In the author's view, the increased use of trade remedies within the WTO is a positive sign for the global trading system, and not a cause for concern. Resort to trade remedies is not a sign of protectionism but an integral part of the trading system which can help Member nations expand their trade liberalization. However, the WTO needs to be concerned about the abuse of trade remedies by WTO Members who appear to have used trade remedies as a form of retaliation against trading partners pursuing their WTO rights.