Seeking Common Ground: Canada-U.S. Trade Dispute Settlement Policies in the Nineties

By Andrew D. M. Anderson | Go to book overview

2
Domesticating the GATT: The Design and
Use of the U.S. and Canadian Trade Law
Systems

Domesticating the GATT AD and CVD Codes

In order to overcome and control the market disrupting effects of certain trade practices by governments or firms, international rules have evolved under the auspices of the General Agreement on Tariffs and Trade (GATT). Signatories to the respective GATT Codes are permitted to impose either countervailing duties (CVD) or anti-dumping (AD) duties to eliminate market distortions caused in particular by subsidized or dumped foreign products (GATT 1980a and 1980b). The GATT also recognizes that nations may face unusual periods when it may be necessary to temporarily restrict foreign imports, whether or not they are "unfairly" subsidized or dumped, if those imports are contributing in a substantial way to a disturbance in a similar domestic industry. This article is generally referred to as the Escape Clause in the United States and as a Safeguard Action elsewhere (GATT 1986c: Article XIX). These mechanisms are sometimes referred to in the United States as the "fair" trade laws, in order to distinguish them from the "unfair" trade laws governing AD and CVD actions. Most of the industrialized nations, including the United States and Canada, have adopted these GATT rules by becoming a signatory to the GATT AD and Subsidies Code and in many cases have developed additional laws governing foreign imports that are non-GATT based, in order to deal with what they consider to be the "unfair" trading practices of foreign governments and firms. 1 It can be argued that the United States has always had many of the GATT-based rules, since its own trade laws and trade procedures have been virtually adopted lock stock and barrel by the GATT into its Codes over the past twenty or so years. The GATT in fact only exists due to the failure of the United States Senate to ratify the Charter for a far more substantial and far reaching organization, the International Trade Organization (ITO) back in the late forties ( Diebold 1952).

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