Academic journal article Law and Policy in International Business

Resolving Antidumping and Countervailing Duty Disputes: Defining GATT's Role in an Era of Increasing Conflict

Academic journal article Law and Policy in International Business

Resolving Antidumping and Countervailing Duty Disputes: Defining GATT's Role in an Era of Increasing Conflict

Article excerpt

[O]n the tree of legal evolution GATT's adjudication machinery is still down at the level studied by legal anthropologists, right alongside dispute resolution ceremonies practiced among primitive societies. Hudec(1)


Use of the dispute settlement procedures of the General Agreement on Tariffs and Trade(2) tripled in the decade of the 1980s compared to the 1970s: Professor Robert E. Hudec has calculated that in the 1980s, 115 complaints were filed with GATT, leading to the establishment of fifty-nine dispute settlement panels and forty-five legal rulings. By contrast, only thirty-two complaints had been filed in the 1970s, leading to twenty-two panels and sixteen rulings.(3)

The United States was an important participant in this process. It filed twenty-two complaints in the 1980s, twice as many as it filed in the 1970s. More significantly, twenty-two complaints were filed against the United States in the 1980s, whereas just four had been filed against it in the 1970s.(4) Antidumping and countervailing duty disputes accounted for a significant portion of the increased activity. In the 1970s, none of the complaints brought to the GATT involved antidumping and countervailing duty issues. In the 1980s, by contrast, there were eleven such complaints, five of which involved the United States as a defendant.(5)

This increased use of GATT's dispute settlement procedures has led to their increased visibility, which in turn has led to expressions of dissatisfaction with the process. GATT's requirement of unanimity means that the losing party can block adoption of an adverse panel report regardless of the views of other GATT members.(6) In the 1980s, the European Community blocked a number of panel reports favorable to the United States, leading to the observation that "dispute settlement doesn't mean much if the results ... are persistently ignored. The repeated failure of the process has eroded domestic support in the U.S. for the GATT, and undercuts the battle against protectionism.(7)

Improved dispute settlement in GATT was a congressionally-mandated negotiating objective for the United States in the Uruguay Round. As spelled out in the Omnibus Trade and Competitiveness Act of 1988 (1988 Act):(8)

The principal negotiating objectives of the United States with

respect to dispute settlement are--

(A) to provide for more effective and expeditious dispute

settlement mechanisms and procedures; and

(B) to ensure that such mechanisms within the GATT

and GATT agreements provide for more effective and

expeditious resolution of disputes and enable better

enforcement of United States rights.(9)

The importance of GATT and its dispute settlement procedures is emphasized even further in the 1988 Act's amendments to Section 301 of the Trade Act of 1974.(10) Section 301, as amended, calls for retaliatory action against countries that deny U.S. rights under trade agreements, such as GATT, or that unjustifiably burden or restrict U.S. commerce." The statute explicitly exempts from Section 301's required action those situations in which the Contracting Parties of GATT, a GATT panel, or a ruling issued under the formal dispute settlement procedures of any other trade agreement finds that the United States' trade rights are not being violated.(12) Further, the statute defines an act, policy, or practice sufficiently "unjustifiable" to engage Section 301's retaliatory provisions as one that is "in violation of, or inconsistent with, the international legal rights of the United States."(13) This description, of course, includes rights granted under GATT.

The 1988 Act makes clear that Congress saw the United States primarily as the injured party insofar as international trade law--GATT law--was concerned. The major problem with GATT law, as Congress saw it, was not so much substantive; the 1988 Act provided that Section 301 would yield to the GATT's existing substantive standards. …

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