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Some Trade Remedy Issues in the WTO Dispute Settlement and Trade Negotiations

Some Trade Remedy Issues in the WTO Dispute Settlement and Trade Negotiations. Mitsuo Matsushita. Recent Trend of Antidumping Actions. Proliferation of antidumping legislation Antidumping as a double-edged sword. 2. Anti-circumvention measures. Types of circumvention

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Some Trade Remedy Issues in the WTO Dispute Settlement and Trade Negotiations

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  1. Some Trade Remedy Issues in the WTO Dispute Settlement and Trade Negotiations Mitsuo Matsushita

  2. Recent Trend of Antidumping Actions • Proliferation of antidumping legislation • Antidumping as a double-edged sword

  3. 2. Anti-circumvention measures • Types of circumvention • Modification of product • Importing country circumvention • Third country circumvention • Country hopping

  4. Negotiation on anti-circumvention measures • Dunckel Draft • Practices of WTO Members • One interpretation->anti-circumvention measures are allowed. (U.S., EC etc) • Another interpretation->anti-circumvention is not allowed. (Japan) • What has happened in the Antidumping Committee after the UR ?

  5. 4. What are the major problems of anti-circumvention ? • Screw driver operations • Chilling effect on remodeling and upgrading products • Chilling effect on foreign direct investment

  6. 5. Sunset Clause • Article 11.3 of the AD Agreement-５ year period • U.S. practices – about one half of outstanding antidumping actions do not expire after 5 years. • Japan v. U.S.- Panel and AB decisions • Japanese proposal at the Antidumping Committee

  7. 6. Zeroing • What is zeroing? • Zeroing prohibited by the EC-Bed Linen Case • Subsequent cases • Japan v. U.S. in zeroing disputes-panel and AB reports • Proposals for amending the AD Agreement on zeroing

  8. Automatic Extension of Antidumping Measures • Mostly EC problems • 1995 entry into EC of three countries • 2004 entry into EC of 10 countries • Legal questions of automatic extension of AD duties with respect to new members • Investigation before imposition of AD duties ? • Article XXIV:5 of the GATT requires that trade restrictions after the formation of a customs union should not be higher than before the formation. Is an automatic extension a violation of this provision? • So far this issue has been discussed in bilateral trade negotiations • Is a multilateral approach necessary ?

  9. 8. Subsidy Issues • “Serious prejudice” in the SCM Agreement Art. 6.1 and non-actionable subsidies in Art. 8 and Art. 9 lapsed in 1999 due to lack of consensus between developed and developing countries. • “Environment” is becoming an important issue and, in light of this, non-actionable subsidy on environment and basic R&D should be restored.

  10. 9. Major Subsidy Disputes • Trend of cases – 1995-2005, total 112 cases in which SCM measures were applied • U.S. shares close to half (45 cases) • EC shares about 1/5 (23 cases) • Canada share less than 1/10 (10 cases) • Others: Mexico (8 cases), Brazil (6 case) and Japan (1 case)

  11. 10. Major Cases • Hinix Case (Korea v. U.S./EC/Japan) • Korea Shipbuilding Case (EC v. Korea, Korea v. EC) • Civil Aircraft Case (U.S. v. EC) • Lumber Case (Canada v. U.S.) • U.S. Cotton Case (Brazil v. U.S.) • U.S. FSC Case (EC v. U.S.)

  12. 11. Subsidy in Fishery • Two opposing positions • U.S., N.Z and Chile (Fish Friends) maintain that subsidy in fishery should be prohibited. • EC, Japan, Korea and Taiwan maintain that total prohibition of subsidy in fishery goes beyond Doha Mandates • Basic issues – (a) Are fish being depleted, (b) Does total prohibition prohibits subsidy to improve ?

  13. 12. Safeguards • Background of the SG Agreement • VER in 1970s and 80s and selective safeguard issues • VER was abolished as of the time of inauguration of the WTO • SG Agreement somewhat eased the requirement (quota modulation and prohibition of countermeasure if SG is based on absolute increase of quantity) • Trend of safeguards since 1995 – more use by WTO Members • Between 1995 and 2006, in the total 155 cases, SG investigation was initiated. • In the same period, there were 76 cases in which SG measures were applied. • Between 1985 and 1994, total number of cases in which SG measures were applied was 26.

  14. 13. Some Issues of Safeguards • Can a WTO member which is a member of FTA/RTA exclude other participants of the FTA or RTA from its SG measures while applying them on WTO Members that are not members of the FTA or RTA? • NAFTA and MERCOSUL state that its member exempt other members from its SG measures when that member invokes SG measures vis-à-vis outsiders. • Some AB decisions on this issue, i.e., U.S. Gluten Case, U.S. Line Pipe Case, U.S. Steel Case and Argentina/Footwear Case • So far, panels and AB have dealt with this issue as that of “parallelism”. • A systemic issue of whether or not an internal non-application of SG measures while applying them to outside parties remains unsettled.

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