US Antidumping Decisions and the WTO Standard of Review: Deference or Disregard?

Article excerpt

I. INTRODUCTION

The Uruguay Round of negotiations on the General Agreement on Tariffs and Trade ("GATT 1994") produced a regime of international trade agreements known loosely as the World Trade Organization ("WTO").1 These agreements were partially intended to enhance the power of international dispute resolution panels, which previously had been unable to make decisions that were binding on all parties. The new WTO system attempted to fix that problem, but in the process created a new one, in that binding WTO review of national actions could infringe on traditional notions of national sovereignty.2

One aspect of this infringement is international review of decisions made by national bodies regarding the harm caused by certain unfair trade practices, such as dumping.3 Nations have a particular interest in protecting domestic industries from unfair competition, especially if the governments of those nations rely heavily on the support of domestic industries for political power.4 Outside review of these political decisions could have negative effects on domestic industries and national governments.

Rulings of the United States International Trade Commission ("US ITC") have recently been challenged before the WTO, and various Dispute Settlement Boards ("DSBs") have determined that several of the United States' laws implementing the WTO do not conform with the various agreements of GATT 1994.5 In addition to questions over the implementation of GATT 1994, various parties have also questioned whether the US Department of Commerce's ("DOC") interpretation of the US antidumping laws comports with those agreements.6 This development will consider the latter of the two issues, especially addressing the actual standard of review the DSBs use when examining national interpretations of GATT 1994. This development will show that the DSBs are applying a nondeferential standard whereby the Boards substitute their own interpretation of the agreements for that of the member nations.

II. THE ANTIDUMPING AGREEMENT AND DEFERENCE

When Nation A suspects or believes that Nation B is unfairly dumping its products on Nation A's domestic market, Nation A is permitted, under the GATT 1994 system, to take action to protect its domestic industry from harm.7 The chief method by which Nation A can protect itself is through the imposition of countervailing duties, or import tariffs, on the dumped goods from Nation B, so that the market price in the importing nation matches the market price in the producing nation.8 This system allows Nation A to determine whether a dumped product has harmed its domestic industry, and whether to impose a countervailing duty to counteract that harm. But it also allows Nation B to appeal adverse national decisions to a DSB if it believes that the countervailing duties were imposed in violation of the agreements that make up GATTl 994.9

Under the Antidumping Agreement, countervailing duties expire five years after their inception unless the imposing nation finds that "the expiry of the duty would be likely to lead to continuation or recurrence of dumping and injury."10 The Agreement also requires that antidumping duties be terminated immediately if the imposing nation finds that a duty is no longer warranted at any time after its imposition. To do this, the nation may consider whether "the continued imposition of the duty is necessary to offset dumping, [or] whether the injury would be likely to continue or recur if the duty were removed ... ."11 Recently, various nations have challenged the procedures used by the United States in its interim reviews and sunset reviews, which determine the likelihood of continued injury and whether duties should remain in place.12 The Antidumping Agreement provides that a DSB can be empanelled in order to decide whether the duties applied were proper and continue to be necessary to avert a likely harm.13

The Antidumping Agreement specifies the standard of review applied by the DSBs, and appears to require that the DSBs give deference to the findings of the national panels. …