Academic journal article
By Rosenthal, Paul C.; Vermylen, Robert T. C.
Law and Policy in International Business , Vol. 31, No. 3
The World Trade Organization (WTO) has radically changed the nature of international trade regulation in just five years. In scrapping the diplomatic model of the General Agreement on Tariffs and Trade(1) (GATT 1947) for the rules-based binding dispute settlement regime of the WTO, the Members established an institution potentially capable of dismantling trade barriers in whatever shape they appear. The United States has been a strong proponent of a rules-based system accompanied by a dispute settlement mechanism that resembles its own transparent adjudicative process. The United States' objectives concerning disputes over antidumping and countervailing duty cases were somewhat different than concerns in other substantive areas. The United States was a demandeur in many areas, such as agriculture and intellectual property, but the U.S. objectives in the dumping and countervailing duty negotiations were largely defensive. Hence, the U.S. objective for dispute settlement in the dumping and subsidy areas differed as well.
During the Uruguay Round negotiations on the Agreement on Implementation of Article 6 of the General Agreement on Tariffs and Trade 1994(2) (Antidumping Agreement) and the Agreement on Subsidies and Countervailing Measures(3) (SCM Agreement), the parties had to balance three main considerations. First, a need exists for countries to counteract unfair trade practices. Second, measures aimed at unfair trade can be corrupted to block fair trade. And third, WTO review of measures could not completely trample the sovereignty of the Members--WTO panels would have to grant Members' decisions some level of deference.
Both agreements succeeded in balancing these factors, but, as the WTO takes on an institutional life of its own, it is important to keep a close eye on the panel and Appellate Body decisions that affect this sensitive area of international trade law. The entry into force of these two agreements gives Members the legal right to administer antidumping and countervailing duty laws as long as they comply with the terms of these agreements. While these agreements are among the most detailed of any under WTO auspices, there is an obvious need for interpretation. Therefore, panels and the Appellate Body can interpret and apply the agreements inconsistently, expanding the level of intrusion into the administration of a Member's laws in one case and limiting that level in another. The legitimacy of the WTO, and continued U.S. participation in the organization, will be jeopardized if the WTO fails to achieve consistent and meaningful application of the agreements.
This Article provides a review of the United States' negotiating objectives for the Antidumping and SCM Agreements and attempts to assess whether those objectives were attained. Part II describes how the blocking of several GATT panel decisions made in favor of the United States, and the lack of deference panels accorded U.S agencies in several decisions adverse to the United States, shaped the objectives of automatic adoption and a deferential standard of review. Part III analyzes the two WTO decisions that have directly challenged the U.S. administration of its antidumping and countervailing duty laws. Part IV addresses the question of whether the United States has maintained effective antidumping and countervailing duty laws and concludes that it has, though some weakening of the laws has occurred. Part V discusses the issue of renewing the non-actionable (green-light) subsidy categories, which permit otherwise violative subsidies, if they are for limited research activities, plant adaptation to environmental regulations, or aid to depressed regions.
While there are too few panel decisions to assess whether the United States has, in fact, realized its negotiating objectives, one thing is clear. Because of ambiguities throughout the covered agreements, a great deal of interpretation needs to be done. …