The Hidden Costs of International Dispute Settlement: WTO Review of Domestic Anti-Dumping Decisions

By Tarullo, Daniel K. | Law and Policy in International Business, Fall 2002 | Go to article overview

The Hidden Costs of International Dispute Settlement: WTO Review of Domestic Anti-Dumping Decisions


Tarullo, Daniel K., Law and Policy in International Business


 
TABLE OF CONTENTS 
 
I.   INTRODUCTION 
II.  OUTCOMES IN WTO ANTI-DUMPING DISPUTE SETTLEMENT 
     CASES 
     A. Overview 
     B. Application of the Article 17.6(ii) Standard 
        1. Overturn National Authorities, Disregard 17.6(ii). 
        2. Overturn National Authorities, Infer Application 
           of 17.6(ii) 
        3. Overturn National Authorities After Considering 
           Alternative Interpretations 
        4. Uphold National Authorities 
III. ASSESSING THE OUTCOMES 
     A. Explanations 
        1. Appellate Body Misunderstanding 
        2. Legal Compulsion 
     B. Normative Arguments for Disregarding 17.6(ii) 
        1. Preference for Free Trade 
        2. Hostility to Administration of Trade Remedy 
           Laws 
        3. Constitutional Aspirations 
     C. Normative Arguments Against Disregarding 17.6(ii) 
        1. Sovereignty 
        2. Legitimacy 
        3. Respecting the Terms of Negotiated Agreements 
IV.  TRADE LAW THROUGH A GEOPOLITICAL LENS 
     A. Resistance to Hegemony 
     B. The Pragmatics of Asymmetrical Power 
V. CONCLUSION 

I. INTRODUCTION

The increasingly international scope of some economic activities is correlated with closer integration of national and international legal arrangements. The causal relationship between economic and legal change varies: Some actors seek legal change in order to facilitate international economic activity, even as other actors seek legal change to respond to that activity. Modes of integrating national and international legal systems also vary: Governments may formally harmonize laws, regulations, or standards. Certain government officials may informally coordinate activities within their areas of competence with their counterparts from other countries. And, of course, governments may enter legally binding arrangements that establish rules against which national action is measured. Trade agreements have traditionally assumed this last form.

Since the conclusion of the Uruguay Round of multilateral trade negotiations and the transformation of the makeshift General Agreement on Tariffs and Trade (GATT) into the World Trade Organization (WTO), international scrutiny of national compliance with international trade obligations has become markedly more legalized. WTO dispute settlement bodies (known as "panels") hear complaints from member states that actions of other member states violate WTO obligations, which are found in the original GATT text and the various specialized agreements of the WTO. The panels conduct quasi-judicial proceedings that produce results binding upon the disputants. (1) An Appellate Body (AB) of seven members sitting in three-member panels hears appeals from panel findings. The AB is intended both to provide a check on wayward panels and to promote consistency in WTO dispute settlement practice. Among the many features of this more legalistic framework, panels conduct direct reviews of some national administrative actions.

This Article examines the short and, to this point, unhappy experience with the introduction into WTO jurisprudence of a standard of review for WTO panels to follow in considering one type of administrative action, the imposition of anti-dumping duties. The experiment with a standard of review arises in the context of WTO review of national anti-dumping measures, a long-time area of contention. "Dumping" was originally defined as selling products more cheaply abroad than at home. While not specifically proscribed by international agreements, dumping has been internationally identified as deserving of condemnation if it causes injury to an industry in the importing country. (2) U.S. law, since emulated by other countries, added to the definition sales below fully allocated cost of production, even where the price charged for the merchandise was the same as that in the importing country. Anti-dumping law generally provides for imposition of an additional import duty to equalize the price of the imported goods with the "normal value," as calculated from foreign sales or from the cost of production. …

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