U.S. Anti-dumping Policy and the World Trade Organization

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U.S. Anti-dumping Policy and the World Trade
Organization   Presentation27 January 2004
Gordon L. Brady
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Two recent issues involving U.S. anti-dumping
policy and the World Trade Organization (WTO)

1. Raising tariffs on ten classes of steel imports
   (safeguard procedures)
2. The January 2003 WTO ruling against the Byrd
   Amendment passed in 2000 that had allowed U.S.
   companies to bring qui tam actions and to receive
   payments of anti-dumping duties collected by the
   U.S. Customs Service

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WTO decision on steel safeguard procedures

• In November 2003, a WTO appeals panel ruled that
  tariffs imposed by the U.S. on ten classes of
  steel imports were illegal
• WTO found tariffs illegal because
• Discriminatory - some importing nations were
  exempted
• Not based on unforeseen developments, and not
  based on a surge of imports
• U.S. Government responded by lifting tariffs to
  prevent WTO-permissible retaliation against
  roughly 2 billion in U.S. exports

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Byrd Amendment

• WTO panel ruled in January 2003 that the Byrd
  Amendment violated the WTO dumping code
• Payments were in qui tam tradition of U.S. law
  non-governmental entities allowed to collect
  bounties for enforcement of laws, e.g., false
  claims, environment. Qui tam doctrine applies
  here to enable successful litigants to receive
  the entire penalty in anti-dumping cases. This
  provides not only the benefits of protection
  against imports but also a on-going subsidy for
  the operations of the domestic industry
• WTO thus found these payments to benefit U.S.
  companies above and beyond benefits from
  tariff-specific price hikes

More
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Byrd Amendment (continued)

• Eight WTO members will announce targeted
  sanctions on U.S. exports unless the Byrd
  Amendment is repealed. The WSJ (9 Jan 04) quoted
  trade experts as suggesting the EU would seek
  approximately 250 million a year in sanctions
• Bush Administration has so far failed to persuade
  Congress to repeal the Byrd Amendment, thus
  illustrating the political clout of Byrd and his
  Senate colleagues who trade favors with Byrd
  (logrolling)
• Arbitration before WTO will take place before WTO
  authorises any retaliation

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Under what circumstances are WTO decisions likely
to prevail?

• WTO rules were a political compromise between
  member states reflecting the compromise that each
  state must make between protectionist and free
  trade forces
• Anti-dumping law will remain a protectionist tool
  that WTO member states may still frequently
  invoke to protect politically powerful
  import-competing industries
• Anti-dumping law was one of many side bargains
  to secure industry support for the WTO
• The extent to which anti-dumping law and other
  measures against imports will continue to be
  employed depends on how domestic economic forces
  play out. Thus results will vary on a
  case-by-case basis

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Interest Groups

• At least two categories of interest groups arise
  in opposition to specific measures of trade
  protection. In the case of steel safeguard
  procedures above we may identify these
  categories as follows
• Steel users who benefit from lower cost imports
• Exporting industries which would be hit by
  prospective EU retaliation

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WTO ruling provided cover for the Bush
administration to its own global economic
agenda This case illustrates the working of the
U.S. domestic political economy as well as
whatever clout the WTO dispute resolution
mechanism may have Binding WTO decisions contrast
with decisions under the former GATT, which could
be blocked by the member states The Byrd
Amendment applies across the board and we may
identify the operation of interest groups
comparable to those we identified in the case of
the tariffs on steel
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I propose doing further research on this and
other international economic issues Why I am the
best candidate for the Director of the
International Economics Programme

• Experience in running these types of projects
• A substantial publication record, networking and
  communication skills at the senior level, and
  many contacts in business, economics, and
  politics
• Experience in fund-raising and financial
  management as Director of the Law Economics
  Center at George Mason University School of Law
• Proven leadership to motivate research lead
  writer on

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• President's Council on Environmental Quality --
  lead writer of economics chapter, acid rain
  studies
• Department of Energy -- Western coal policy,
  environmental quality
• Department of the Interior -- conference on
  western coal policy
• President's Council on Environmental Quality
  National Science Foundation study of air quality
  management
• Presidents Office of Management and Budget -
  National Science Foundation evaluation of
  emission trading policy proposal
• National Commission on Air quality - Conference
  on benefit estimation, Conference on cost
  estimation
• Primer on Public Choice