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Objectives : Summarize use of trade remedy law (TRL) w.r.t. agriculture in NAFTA countries.

Trade Remedy Laws & NAFTA Agricultural Trade C. Carter & C. Gunning-Trant UC Davis INTERNATIONAL AGRICULTURAL TRADE DISPUTES: CASE STUDIES IN NORTH AMERICA. Objectives : Summarize use of trade remedy law (TRL) w.r.t. agriculture in NAFTA countries.

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Objectives : Summarize use of trade remedy law (TRL) w.r.t. agriculture in NAFTA countries.

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  1. Trade Remedy Laws & NAFTA Agricultural TradeC. Carter & C. Gunning-TrantUC DavisINTERNATIONAL AGRICULTURAL TRADE DISPUTES: CASE STUDIES IN NORTH AMERICA Objectives: • Summarize use of trade remedy law (TRL) w.r.t. agriculture in NAFTA countries. • Present empirical evidence of “investigation” and “trade diversion” effects in agricultural cases.

  2. Trade Remedy Law (TRL) • Similar TRL (AD, CVD and Safeguard) is used in U.S., Mexico and Canada. • TRLs have been amended over time to make it easier to receive protection. • Increased global trend in filing of trade remedy cases (4 main reasons) • TRLs are viewed as disguised protectionism but TRLs are in compliance with WTO.

  3. How many cases are we talking about? • AD & CVD Cases initiated between 1984-2000: • U.S. 761 {71 agricultural (9.3%)} • Canada 334 {22 agricultural (6.6%)} • Mexico 219 {23 agricultural (10.5%} • Agric. Cases (1980-2000): • U.S.: 62% AD & 38% CVD • Canada: 73% AD & 27% CVD • Affirmative Ruling in Agric. Cases (1980-2000): • U.S.: 54% Canada: 82%

  4. Canadian and U.S. AD/CVD AgRulings 54% success 82% success

  5. Weighted % Change in Value of U.S. Imports: 69 Agric. Cases (1980-2000)

  6. Econometric Results • Data: US AD and CVD ag real import values, 1980-2000, affirmative rulings only • For every 10% increase in duty  5.6% drop in import value • $ change from initiation year (to) to (t+3) • Named countries: $41M  $22M (-46%) • Non-named countries: $64M  $88M (+38%) • N.B. Effect of Trade diversion endures beyond the year of investigation.

  7. Conclusion • NAFTA members are large users of TRL. • Use of TRL is on the rise worldwide, especially by developing countries. • For agricultural cases, from 1980 to 2000, the evidence is consistent with “trade diversion” on positive rulings and an “investigation effect” on negative rulings. • This is all the more reason to keep TRL on the negotiating table.

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