WTO Cases and Reflection on Anti-Dumping Values and Trade Policies - Assignment Example

WTO Cases and Reflection on Anti-Dumping Values and Trade Policies of United States Name University Affiliation WTO Cases and Reflection on Anti-Dumping Values and Trade Policies of United States 1.0. Introduction The interaction between state parties in various contexts including trade sometimes leads to disputes and misunderstanding. According to the Permanent Court of International Justice (PCI) as outlined in Abass (2010, p. 431) dispute is ‘a situation where there is a disagreement between two states or entities that are subjects of international law, about the exact legal nature of a right, interest, duty or obligation.’ International law has come up with international obligations besides providing mechanisms for peaceful resolution of disputes. Besides use of diplomatic mechanisms such as negotiation, mediation, good offices, conciliation and inquiry, states may also resort to judicial processes such as arbitration and judicial settlements (Abass, 2010, p. 432). The WTO organization is largely involved in the settlement of disputes involving various member states. The WTO is often involved when a trade member believes there is violation of trade rules. World Trade Organization in the circumstances provide its members with a multilateral system for dispute resolution and in the process prevent or deter the unilateral and sometimes non-peaceful resolution of disputes by state parties. In general, the United States has been involved in several trade disputes that have been successfully resolved by the WTO through the Dispute Settlement Body that is solely tasked with the responsibility of and authority to establish expert panels for consideration of cases besides following up on implementation monitoring. In most case, these disputes have tended to reflect the countries values, and principles as well as a countries preferred trade policies. 2.0. Anti-dumping related Cases 2.1. DS 414 Among some of the cases that the United States was involved revolve around trade restrictions on the United States goods. One recent case is the DS 414 case against China for resulting to countervailing and anti-dumping duties on the U.S products. Specifically, the United States complained against China for imposing through its Ministry of Commerce (MOFCOM) anti-dumping and countervailing duties on the grain oriented flat-rolled electrical steel from the United States, which the United States considered inconsistent with Chinas obligations and commitments under the GATT 1994 agreement, the SCM agreements and the Anti-dumping Agreement (WTO, 2014a). The key panel findings indicated that there was sufficient evidence to suggest that the Chinese ministry imposed the trade restrictions into 11 programs without having enough evidence to justify the imposition of the restrictions, which was contrary to Articles 11.3. The panel indicated that the Chinese government, contrary to provisions under ADA Art 6.8 and ASCM Art 12.7, inaccurately resorted to fact available to calculate dumping margins and subsidies for U.S exporters and further inappropriately used a 100 percent utilization rate in applying the facts available in calculating the rates of subsidies (WTO, 2014a). The panel further determined injury and concluded that there was evidence of the actions on price and volumes of exports. The panel asserted that there was indication that China relied on the low price of the U.S imports compared to its domestic prices to reach to its price effects findings that lead to decision contrary to the evidence that was available (WTO, 2014a). 2.2. DS 427 In another similar case, the United States won a case in the WTO against China for imposing trade barriers against United States chicken broiler products. The WTO panel concluded that Chinas decision to impose higher duties on the products was unjustified and it violated WTO obligations in its conducting investigations as well as the imposition of anti-dumping duties as well as countervailing duties (CVD) on the United States chicken imports (WTO, 2014b). 2.3. DS 440 In a third case against China, the United states complained against Chinas use of anti-dumping duties (ADS) as well as countervailing duties (CVDs) that were imposed against the United States made cars as well as sports utility vehicles (SUV) (WTO, 2014c). In the DS 440 case, the United States argued that the imposition of countervailing duties and anti-dumping duties on some of the automobile from the United States was inconsistent with various articles of the anti-dumping agreement, SCM agreement, as well as GATT 1994 (WTO, 2014c). The United States concerns surrounded procedural aspects involved in the investigations leading to Chinas imposition of trade barriers for vehicles from United States with 2500cubic centimeters and over engine displacements (WTO, 2014c). The panel concluded that Chinas actions were not consistent with the provisions of Anti-dumping agreements as well as SCM agreement and more so with Article 10 on investigations (WTO, 2014c). 2.4. DS 339 Other cases have also tended to reflect the United States position on imports to the country. For instance, DS 339, China complained to the WTO against the United States decisions to use a transitional product-specific safeguard measure against the increased importation of light truck tyres with origins from China in addition to some types of passenger vehicles tyres. The panel agreed with the United States position that the Chinese rapidly growing imports were a significant contributor to material injury on the United States domestic industry and thus warranting the United States decision to impose the restrictions (WTO, 2014d). 3.0. Analysis in relation to export oriented and anti-dumping trade policies From the cases, various priorities in the United States that include an increase in exports coupled with decrease imports for consumptions goods reflects the export oriented and anti-dumping policies adopted by the United States. McEachern (2014) defines dumping as the selling of commodities in export markets for less than the cost of production or for less than they are sold in local market. For instance, in case DS 339, the U.S was subject to a complaint from China against its use of the transitional safeguard measure against the importation of tyres. The complaint reflects the United States policy of protecting its countries industries from excess imports through use of anti-dumping duty. In some cases, the United States has applied measures against excess imports as a contingency measure as evident in the fact that the import restrictions against the Chinese tyres imports was for a limited period of three years (United States, 2012). The fact that the imposition of the penalties was attributed to the International Trades Commission determination that there was importation of light truck and passenger vehicles tyres in such huge quantities so as to lead to market disruptions to the domestic producers reflects the countries growth in legislation against anti-dumping (United States, 2012). This is supported by the WTO report that indicate that the United States had adopted about 246 anti-dumping duty (AD) orders that affected imports from over 140 countries as the country sought to reduce excess imports, which reflected a gradual increase in United States use of anti-dumping duty (United States, 2012). The increasing use of anti-dumping policy to support local industries is further supported by Schaffer et al (2014) who asserts that the United States has increasingly relied on U.S. countervailing duty law in the recent past to countries such as China. This has been necessitated by an increase in the influx of Chinese products in the U.S. economy, and demands from congress to stop the subsidies from China flooding in local market and affecting local industries negatively (McEachen, 2014). The conclusion of the case in favor of the United States while reflecting justified and limited use of import control for United States fades in comparison to further evidence indicating more aggressive pursuit of anti-dumping policy towards other countries. For instance, United States (2012) indicated that the U.S use of AD investigations and AD orders on China had increased considerably over the years in reflection of a change in the United States long-standing trade policy of not employing countervailing duties (CVD) on Chinese products. The increased reliance on anti-dumping duty therefore reflects the U.S growing aggressiveness in implementing an anti-dumping policy that is geared at import reduction. One the other hand, three other cases against China that include DS 440, DS 414 and another cases against China for imposition of trade barriers against export of chicken broilers reflects the United States policies aggressively increasing trade exports and protecting its local industries against external protectionist policies. According to WTO (2012), the United States administration aimed at rebalancing the United States economy in order to recover sustainably from the recent recession and this could only be achieved by an increase in exports and investments. Trade policy in the US has thus focused on increasing exports through export promotion. Another approach that has aimed at promoting exports is the increased monitoring of the trading partners commitment to international agreements. The United States has aimed to achieve this goal by consistently monitoring and enforcing various trade partners’ commitments (United States, 2012). In the above cases, the United States complaints against China reflect such efforts towards enforcement and monitoring of its trade partners. For instance, in DS 440, the United States aimed at protecting its exportation market for U.S. auto manufacturers for vehicles with 2500 cc engines and above. In this case, the United States stood to experience reduced exports especially for the U.S. auto manufacturers and especially for nearly 850,000 workers who rely on the automotive industry in the United States (WTO, 2013). The conclusion by the panel that Chinas action were not consistent with the provisions of Anti-dumping agreements as well as SCM agreement and more so with Article 10 on investigations is an indication of United States success in monitoring other state parties use of anti-dumping and other barriers to trade that would work against United States export led policy. Similarly, in the case of China imposing trade barriers against United States chicken broiler products and the subsequent dispute resolution by WTO in favor of the United States further reflects successful monitoring by United States. Finally, in the case DS 414, the decision in favor of United States against China for the imposition of anti-dumping and countervailing duties on the grain oriented flat-rolled electrical steel from the United States, which the U.S considered to be inconsistent with Chinas obligations and commitments under the GATT 1994 agreement, the SCM agreements and the Anti-dumping Agreement also reflects U.S. successful monitoring of other states. In this case, in successful monitoring China to meet their obligations, the U.S. also reflects the importance placed on the export-oriented policy. Such a policy is evident with pronunciations by the U.S. president in 2010 to increase exports by four-fold within a four-year period (United States, 2012). 4.0. Conclusion From the foregoing analysis, it is evident that resolution of disputes in the WTO is a less aggressive approach to countries resolution of disputes involving member states. It is also largely evident that the cases brought by state parties are often reflective of the countries in question trade policies and preferences and more so the cases reflect the values and principles that the countries involved are pursuing. In relation to U.S. trade policies, the analysis indicate the United States is aggressively pursuing an export –increase oriented policy as well as an import- reduction policy that also involves aggressive monitoring of its member parties against imposition of trade barriers such as anti-dumping policies coupled with increased use of anti-dumping measures. In effect, the positions of the United States in the cases also reflects the U.S. states priorities that include the need to increase exports while reducing importations of various product categories that may affect local industries such as the automotive industry and agriculture. References Abass, A. (2012). International Law: text, cases, and materials. Oxford: Oxford University Press. United States (2012). Government report: A policy statement by the government of the member under review. World Trade Organization. Trade Policy Review Body. WTO (2014a). Dispute Settlement: Dispute DS414 China — Countervailing and Anti-Dumping Duties on Grain Oriented Flat-rolled Electrical Steel from the United States. WTO. Retrieved from http://www.wto.org/english/tratop_e/dispu_e/cases_e/ds414_e.htm WTO (2014b). Dispute Settlement: Dispute DS427. China— Anti-Dumping and Countervailing Duty Measures on Broiler Products from the United States. WTO. Retrieved from http://www.wto.org/english/tratop_e/dispu_e/cases_e/ds427_e.htm WTO (2014c). Dispute Settlement: Dispute Ds440. China — Anti-Dumping and Countervailing Duties on Certain Automobiles from the United States. WTO. Retrieved from http://www.wto.org/english/tratop_e/dispu_e/cases_e/ds440_e.htm WTO (2014d). Dispute Settlement: Dispute Ds339. China — Measures Affecting Imports of Automobile Parts. WTO. Retrieved from http://www.wto.org/english/tratop_e/dispu_e/cases_e/ds339_e.htm Schaffer, R., Agusti, F, & Dhooge, U. (2014). International business law and its environment. New York: Cengage Learning. McEachern, W. (2014). Economic macroeconomics 4. New York: Cengage Learning. Read More