1

Antidumping Measures: prospects for developing countries

By Welber Barral*

I - Introduction

Throughout the history of GATT, the use of antidumping (AD) measures has always

been a prolific source of debate. The increasing recourse to these measures is indicated as a serious

concern by practitioners in International Economic Law, for whom AD measures are generally

characterized as protectionist devices with unlimited uses, and whose application leads to new trade

barriers1.

The economic rationale of both dumping and AD measures is also subject of debate in

International Economic Law. Most authors oppose the idea that price discrimination may provoke

generally negative impacts; for them, such practice must be viewed as a normal trade practice,

which exists also in domestic markets. According to these authors, the only exception that would

justify AD measures is the predatory dumping, which is aimed to destroy domestic industry in order

to elevate prices of the imported goods later. The existence of predatory dumping, however, is

difficult to verify. Thus, AD measures would just be new apparel for the old protectionism, without

any economic foundation that could legitimize its use2.

Notwithstanding the academic debate, the application of AD measures has remained in

the legislative history since 1904, when Canada adopted the first AD legislation. The fear that AD

*
Professor of International Economic Law at the Universidade Federal de Santa Catarina, Brazil.
barral@ccj.ufsc.br. The author is grateful to Gilvan Brogini and Rafael Benke, for their helpful comments.
1
For a complete analysis of the antidumping regulation, see generally: Gabrielle Marceau, Antidumping and
Antitrust issues in free-trade areas (New York: OUP, 1994), and Welber Barral, Dumping e comércio
internacional (Rio de Janeiro: Forense, 2000).
2
The literature on AD measures is quite vast. For recent analysis, see: Finger et al, Antidumping as safeguard
policy. [s.l.], Dec 2001; Brink Lindsey, The US Antidumping Law: Rhetoric versus Reality. Cato Institute:
Washington DC, Trade Policy Analysis No. 7, August 16, 1999. Raj Bhala, 'Rethinking antidumping law',
The George Washington Journal of International Law and Economics, v. 29, n. 01, 1995, p. 1-143. A rare
 2

measures could be used as a barrier to trade was already a concern during the GATT negotiations,

and the first international regulation materialized in Article VI of GATT 1947. During the Tokyo

Round an Antidumping Code was elaborated as an attempt to clarify obscure terms of Article VI,

which allowed great discretion for national authorities, since they could choose the methodology to

apply in the investigations of dumping. Later, during the Uruguay Round, the issue was brought

again to the negotiating table, as a consequence of the U.S. recurrent use of AD measures in the

1980s.

This article evaluates the seven years of the Antidumping Agreement and also presents

the main proposals for changes. The article suggests that changes in procedural requirements, as

proposed in the current negotiations, do not necessarily imply greater legal certainty; contrarily,

these changes may serve as larger obstacles for the use of those measures by developing countries3,

while developed countries have the ability and experience for the continuous use of those measures.

To reach this conclusion, the first part of the article reports on the world expansion of

antidumping legislations after the Uruguay Round. The second part analyzes cases submitted to the

WTO Dispute Settlement Body (DSB) involving AD measures. The next part evaluates proposals

presented in Seattle and Doha, and confronts them with the judicial experience within the WTO and

with the U.S. domestic political pressures on the matter. The concluding part discusses the main

conclusions of the article.

defense of those measures is in Howell, Dumping: still a problem in international trade (Washington: Dewey
Ballantine, 1999).
3
Thus, stricter procedural requirements could "add an excessive burden on the administering authorities of
developing countries which are often understaffed, lacking the many years of practice experience of the
traditional users, and overloaded with work" (Konstantinos Adamantopoulos and Diego de Notaris, 'The
futureof the WTO and the reform of the And-dumping Agreement: a legal perspective'. Fordham Intl. Law J.,
v. 24, n. 1, p. 53).
 3

II - AD Measures after the Uruguay Round

During the Uruguay Round, the negotiation of the Antidumping Agreement was

pugnacious, and almost became a deal-breaker. To accommodate the pressures for change and the

U.S. resistance, the final text embodied many "creatively ambiguous" expressions, in a complex and

sometimes unreadable text.

However, the objective of limiting the application of AD measures through the

Antidumping Agreement cannot be considered as a successful result of the Uruguay Round. In the

last years, more and more countries have adopted provisions for the application of such measures in

their domestic legal orders4. At the same time, an interesting modification may be noticed: the main

AD users are no longer developed countries5, the traditional importers; developing countries have -

in terms proportional to the world trade - assumed the largest share of AD measures in force6.

This is an important modification of the international economic order, as a result from

the WTO’s new multilateral trading system. Some reasons for that include: a) the heavy reduction of

tariffs in developing countries, which are no longer an efficient barrier against imported products; b)

the growth of imports of finished products by developing countries after the Uruguay Round, that

reversed the industrialization process based on import substitution that took place in the 1970s and

1980s; as a consequence, (c) these imports become threats to domestic industries whose

4
In a recent communication to the WTO, the European Community (EC) observes that at least 65 countries
have incorporated AD provisions in their national laws; consequently, AD is "now a global instrument and
every country is both a potential user and a potential target of antidumping action" (TN/RL/W/13).
5
“There are now more than 50 WTO members, which have adopted anti-dumping legislation. Of these, more
than half have initiated anti-dumping proceedings. While in the eighties more than 80% of the cases were
initiated by the four traditional AD users [Australia, Canada, European Community and United States], recent
years have seen developing countries become increasingly active. Thus, for example, in 1998, South Africa
initiated 41 proceedings, India 30, Brazil 16 and Mexico 10. Indeed, in 1998 the four traditional users were
responsible for only 34% of all initiations”, according to Vermulst, Anti-dumping and antisubsidy concerns
for developing countries (Geneva: UNCTAD, 1999, p. 2).
6
“Perhaps the most worrisome information in Table 2 is that the most intense users of antidumping are
developing countries. South Africa, 89 cases; Argentina, 89 cases; India, 83 cases; and Brazil, 56 cases are
high on the list by simple number of cases. By the alternate measure, Brazil’s intensity of use is five times the
 4

technological base is emergent and whose competitiveness is weak; besides that, (d) pressure groups

in developing countries became more organized, as a consequence of democratization, and now

demand new barriers in substitution for the tariff barriers7.

Initiated % to the Final % world's % value Investigati AD

Investigat world's measure AD measures world ons/import Measures/I

ions investigati (1993- (D) exports (E) s (B/E) mports

(1991- ons (B) 1997) (C) (D/E)

1997) (A)

Argenti 123 7,27 48 8,1 0,8 9,08 10,12

na

Australi 277 16,38 30 5,06 2,1 7,80 2,41

Brazil 49 2,88 30 5,06 2,1 1,37 2,4

New 48 2,83 7 1,18 0,5 5,66 2,36

Zealand

South 88 5,2 26 4,38 1,0 5,20 4,38

Africa

Mexico 141 8,33 66 1,11 2,9 2,87 0,38

Canada 114 6,74 60 1,01 5,7 1,18 0,17

USA 278 16,44 139 23,6 26,6 0,61 0,88

US intensity – India’s seven times, South Africa and Argentina’s twenty times the US figure” (Finger et al.,
Antidumping as safeguard policy, [s.l.], December 2001, p. 9).
7
As Sylvia Ostry notices: "Many of the [developing] countries are far better organized and informed, in part
because of the rise of democracy an the growing awareness of trade policy issues in the general public and
political institutions and the business community" (What are the necessary ingredients for the world trading
order? Kiel Institute, June 2002, p. 5).
 5

EC 234 13,83 102 17,2 24,0 0,57 0,71

Table I: Proportional use of AD measures in the world

AD measures may be inserted into this context, and they serve as an efficient barrier

once their application is relatively easy. The easiness mentioned here refers to political aspects, and

not to technical requirements, for the application of AD measures does raise legal, economic and

accounting problems. However, in the international political landscape, AD measures are generally

seen by national constituencies as a legitimate reaction against private practice of exporting

industries. In this sense, AD measures are politically more acceptable than countervailing measures,

that defy the granting of subsidies by another State, and are thus related to public policies of another

sovereign entity.

In addition, AD measures do not require the grant of compensation to affected exporting

Members, as it happens in the case of safeguard measures, which have become less attractive as a

tool for trade defense, in spite of being theoretically the most appropriate in terms of both economic

theory and legal adequacy with the GATT 1994 rules. Furthermore, safeguard measures shall be

applied in a non-discriminatory basis, unlike AD measures, which can vary for each affected

exporter.

These theoretical assertions can be demonstrated by the recent trade practice of emerging

countries, like Argentina, Brazil, India and Mexico. In these countries, the use of AD measures has

visibly increased, mainly to protect domestic industries that previously enjoyed high tariff barriers.

Argentina, for instance, is nowadays – in proportion to the participation in the world trade – the

largest user of AD measures, and this use includes measures against products originated in other

MERCOSUR partners. This does not mean, however, that the number of measures applied by
 6

traditional users has been reduced: the United States, European Community, Canada, and Australia

are responsible for a major part of AD measures currently in force8.

On the other hand, the number of domestic rules about AD is growing among other

countries. To date, more than 900 AD regulations are in force throughout the world and the number

of user countries increased thrice during the last ten years9. Such measures were already applied, for

instance, by Guatemala and by Trinidad and Tobago.

What consequences may be inferred from this landscape? In economic terms, the

application of AD measures may provoke different impacts, depending on the affected industry and

on its relevance to the national market involved. This impact is often negative, and AD measures are

viewed as more harmful to the economy as a whole than the granting of subsidies or the application

of safeguards. Moreover, AD measures can generate a high social cost, when they are applied

against downstream inputs and when they are used to protect inefficient industries or cartels in

domestic markets. This is usually the situation in place.

In the economic literature, the application of AD measures could be positive to the

economy as a whole only when it hinders the predatory intention of foreign producers. In

contestable markets, this hypothesis, if theoretically possible, is hardly plausible. Therefore, the

criticism is about the indiscriminate application of AD measures, with no criteria that can

demonstrate any economic rationale for these measures. According to the common academic

opinion, the perfect solution would be the elimination of AD measures and its replacement by

international rules of competition.

However, in the real political world, the elimination of AD measures is still unlike the

next few years. The power of domestic pressure groups, the fact that AD constitutes one of the few

8
For a complete study about the use of AD measures in the last years, see Miranda et al., 'The international
use of antidumping'. Journal of World Trade, v. 32, 1998, p. 5-71.
9
WT/GC/W/240.
 7

protectionist instruments remaining, and the U.S. opposition to any modification on its current

international regulation are factors that allow short life to proposals of radical change. Thus, AD

measures shall exist for a considerable period of time. Besides, the expansion of domestic

regulations will create the opportunity for its use by a larger number of pressure groups that will

possibly oppose legislative modifications10.

III - International disputes related to AD

The disputes involving the application of AD measures constitute a considerable number

of cases submitted to the Dispute Settlement Body (DSB), although they are proportionally inferior

to the enormous number of AD measures applied by WTO Members. In other words, AD measures

configure a relevant barrier in international trade, and its increasing application should raise

reactions of exporting Members, which can file a complaint before the DSB if they think the

importing Member is applying AD measures in violation to the Antidumping Agreement. Such

complaints exist and have been increasing as more countries are applying AD measures. However,

governments of affected countries still refrain from initiating disputes related to AD measures.

Some explanation may be cogitated to explain this phenomenon. First, some diplomats

still believe that dumping is a private and necessarily negative practice that can legitimately raise

reactions from importing Members. In this reasoning, AD measures would not affect the exporting

State's public interest.

Second, the Antidumping Agreement contains a very complex text, which involves many

technical issues, as the definition of a similar product, the exporting industry market share, and the

10
As Hufbauer notes: “When you dance with the devil, the devil doesn’t change, the devil changes you. Any
country that introduces an antidumping law to create a ‘negotiating chip’ for talks with the United States, the
European Union, and other industrial players, should be forewarned. The ‘chip’ will soon become non-
negotiable, as vested interests in the legal, industrial, and bureaucratic community learn to love the new
instrument”. Hufbauer, Antidumping: a look at U.S. experience. Washington: Institute of International
 8

domestic industry injury assessment. The debate over such data, which are presented by the

investigating authorities of the importing Member, may imply complex (and sometimes endless)

analysis. Such debate is not always useful, since the debated methodology used in the investigation

may find ground in the dubious text of the Antidumping Agreement.

Thirdly, diplomatic representatives of developing countries resist the idea of questioning

AD measures applied by domestic authorities of developed countries, which have accumulated

experience in the matter for decades. Finding an error in the administrative process or a mistake in

the application of the Antidumping Agreement demands knowledge and experience that are

normally inexistent in developing countries.

These factors were already in place during the period prior to the WTO, and they explain

why the first dispute involving the application of AD measures, in 1954, did not involve traditional

users, but regarded a complaint by Italy concerning measures applied by Sweden against imports of

nylon products11. The next dispute was a Finnish complaint against measures applied by New

Zealand12. Only in the 1980s were AD measures applied by traditional users challenged, normally

by other developed countries13. During the GATT 1947, Brazil filed a complaint against European

measures imposed on Brazilian exports of cotton yarn14. This complaint, however, was unsuccessful

because of procedural issues related to the terms of reference of the panel.

After the Uruguay Round, the first disputes did seem to repeat the pattern observed under

the GATT 1947. In fact, the first dispute was the complaint brought by Mexico against the

Economics, 1999, p. 3.
11
Sweden - Antidumping duties (BISD 3S/81).
12
New Zealand - Imports of Electrical Transformers from Finland (BISD32S/55).
13
EEC - Regulation on Imports of Parts and Components (BISD 37S/132, complaint of Japan). United States
- Imposition of antidumping duties on imports of seamless stainless steel hollow products from Sweden
(ADP/47). United States - Antidumping duties in the United States on gray portland cement clinker imported
from Mexico (ADP/82). United States - Antidumping duties against imports of fresh and chilled atlantic
salmon (ADP/87). Korea - Antidumping on imports of polyacetal resins from the United States (BISD
40S/205). EC - Antidumping duties on audio tapes in cassetes originating in Japan (ADP/136).
 9

imposition of AD measures by Guatemala against imports of Mexican cement. The result of this

decision proves the relevance of procedural issues in AD cases. The panel focused on two flaws: a)

Guatemala had not previously notified Mexico regarding the beginning of investigations; b)

Guatemala had begun the investigations without sufficient grounds15. As a result, the panel

concluded that Guatemala had violated the Antidumping Agreement and recommended the

elimination of the AD measure.

The decision of the Appellate Body (AB) in this dispute was still more surprising, if we

consider the persistence of procedural issues. Discussing the mandate of the panel to settle the

controversy, the AB found that "the specific measure at issue" was not clearly delimited, as article

6.2. of the DSU provides. The AB concluded that the panel had no jurisdiction to examine the

dispute. Thus, the material challenges posed by Mexico could not be examined. This fact made it

possible for Mexico to begin another dispute in 2000, related to the same industry, and this time

obtained a favorable decision16.

The next case involved a Korean complaint against the imposition, by the United States,

of AD measures against imports of semiconductors (DRAMs). The Korean arguments were adopted

by the panel, which concluded that the United States had not observed the art. 11.2 of the

Antidumping Agreement, according to which the affected industries have the right of requesting

review of the AD measures to the national investigating authorities17.

14
EC - Imposition of antidumping duties on imports from cotton yarn from Brazil (ADP/137).
15
Such flaws constitute violation of respectively arts. 5.5 and 5.3 of the Antidumping Agreement. The
decision was more surprising because Guatemala notified Mexico immediately (11 days) the decision of
initiating investigations was published, and no damage caused by that delay was demonstrated. However, the
panel found “the entire investigation rested on an insufficient basis, and therefore should never have been
conducted. This is, in our view, a violation which cannot be corrected effectively by any actions during the
course of the ensuing investigation” (WT/DS60/R, § 8.6).
16
Guatemala - Definitive Anti-dumping Measure regarding Grey Portland Cement from Mexico
(WT/DS156).
17
United States - Anti-Dumping Duty on Dynamic Random Access Memory Semiconductors (DRAMS) of One
Megabit or Above from Korea, complaint by Korea (WT/DS99/1).
 10

Other relevant cases were subsequently submitted to the DSB. One of them referred to an

U.S. complaint against measures applied by Mexico against American exports of corn syrup18. In

that dispute, procedural issues were also raised, involving the objection that the same matter had

been submitted to the NAFTA dispute settlement system. The panel ignored the objection, and

found that the Mexican AD measures were inconsistent with several provisions of the Antidumping

Agreement.

Another interesting case referred to the European19 and Japanese20 complaints against the

United States Antidumping Act of 1916. This Act allows civil and criminal actions to be filed before

the U.S. courts against foreign companies that practice dumping. The complainants alleged that the

1916 Act violated the Antidumping Agreement, because AD measures are the only actions possible

against dumping, and those measures may only be imposed by domestic administrative authorities.

In March 2000, the panel report of both cases involving Japan and European Community was

circulated, and the panel condemned the U.S. domestic regulation. The United States appealed, but

its arguments were also rejected by the AB in a report adopted by the DSB in September 2000.

During the seven years after which the DSU was in force, disputes related to AD

measures have been frequent in the DSB: (a) India successfully complained against the methodology

adopted by European Community respect the dumping calculation21; (b) Poland presented a case

against measures applied by Thailand22; the AB condemned the Thai practice, finding that: the

country had not made an objective assessment of the presented evidence; and the Thai authorities

had not demonstrated the injury nor the causal link between the imports and the injury to the

18
Mexico - Anti-Dumping Investigation of High-Fructose Corn Syrup (HFCS) from the United States,
complaint by the United States (DS132).
19
WT/DS136.
20
WT/DS162/1.
21
European Communities – Anti-Dumping Duties on Imports of Cotton-Type Bed-Linen from India,
complaint by India (WT/DS141/1).
22
Thailand - Anti-Dumping Duties on Angles, Shapes and Sections of Iron or Non-Alloy Steel; H-Beams from
 11

domestic industry; (c) Korea complained against the imposition of AD measures by the United

States23; (d) Japan also complained against the United States, and the AB found provisions of the

United States Tariff Act of 1930 were inconsistent with the Antidumping Agreement24; and (e)

measures applied by Argentina against Italian exporters were considered inconsistent with the

Antidumping Agreement by the panel, which found Argentina misused the "best information

available" (BIA)25; (f) a panel ruled favorably for the U.S., in a claim brought by India regarding

AD measures on steel plate26; (g) in August 2002, a panel ruled in favor of Egypt, in a claim against

a Turkish AD measure on steel rebar27.

The most recent, and certainly controversial decision was a WTO panel decision - in

September 2002 - concerning the U.S. Byrd Amendment. The claim had been brought by eleven

countries in 2000, who asserted that the American law constituted an additional remedy to the

imposition of AD measures, a remedy not envisaged in the WTO regulation. The panel adopted

these arguments. This dispute shall have a particular influence in the American behavior during the

negotiations of new AD rules. Clearly, the decision touches two politically sensitive issues in

American trade policy: trade remedies and the intrusion of WTO panels on the examination of U.S.

domestic laws28.

Besides, the cases reported above show that the U.S. is constantly citad in requests before

the DSB. In fact, although not a major user of trade remedies - in proportional participation in the

world trade -, any AD measure adopted by the U.S. has important impacts on the exporting markets.

Poland, complaint by Poland (WT/DS122/1).

23
United States - Anti-Dumping Measures on Stainless Steel Plate in Coils and Stainless Steel Sheet and
Strip from Korea (WT/DS179).
24
United States - Anti-Dumping Measures on Certain Hot-Rolled Steel Products from Japan (WTDS184).
25
Argentina - Definitive Anti-Dumping Measures on Imports of Ceramic Floor Tiles from Italy (WT/DS189).
26
United States – Anti-Dumping and Countervailing Measures on Steel Plate From India (WT/DS206).
27
Egypt – Definitive Anti-Dumping Measures on Steel Rebar from Turkey (WT/DS211).
28
In fact, the Trade Promotion Authority Act (H.R. 3009) notes that "the recent pattern of decisions by
dispute settlement panels of the WTO and the Appellate Body to impose obligations and restrictions on the
 12

Table II - Decided disputes before the WTO/DSB regarding AD Measures (1995-2002)

Country As Claimant As Respondent

Australia 01* -

Brazil 01* -

Canada 01* -

Chile 01* -

EC 03* 01

Egypt - 01

Guatemala - 02

India 03* -

Indonesia 01* -

Japan 03* -

Korea 03* -

Mexico 03* 01

Poland 01 -

Thailand 01* 01

Turkey 01 -

United States 01 07

* Members that requested a panel on the Byrd Amendment dispute.

In the near future, the AD Agreement will often be subject of analysis by WTO panels.

Beyond those cases that are settled, several others are pending of consultations and involve different

use of antidumping [...] has raised concerns" (Sec. 2101(b)(3)(A).

 13

countries29. Besides, there were cases in which the consultations were sufficient to settle

controversies among the parties and to remove AD measures30.

The matters raised in each of these disputes at the DSB have varied widely and almost all

relevant provisions of the Antidumping Agreement were debated. On the other hand, the intersection

of data between complaints and decisions of the panels demonstrates that some provisions of the

Antidumping Agreement are more controversial, or parties in dispute invoke them more often.

This occurs in relation to the calculation of dumping margins, whose complexity raises

serious debates31. Parties also present arguments related to the demonstration of injury to the

domestic industry32, and they insist on strictly procedural arguments, such as the requirement that

the initial complaint shall be presented by the relevant domestic industry33, or that exporters shall be

properly notified in sufficient period of time that allows them to present their arguments, or that

exporters have opportunity to request review of measures34. In two cases, the parties have alleged

29
As of July 2002: WT/DS225 (United States - Anti-dumping duties on Seamless Pipe from Italy); WT/DS216
(Mexico - Provisional Anti-Dumping Measure on Electric Transformers); WT/DS215 (Philippines - Anti-
Dumping Measures regarding Polypropylene Resins from Korea); WT/DS208 (Turkey - Anti-Dumping Duty
on Steel and Iron Pipe Fittings); WT/DS191 (Ecuador - Definitive Anti-Dumping Measure on Cement from
Mexico); WT/DS187 (Trinidad and Tobago - Provisional Anti-Dumping Measure on Macaroni and Spaghetti
from Costa Rica); WT/DS168 (South Africa - Anti-dumping Duties on the Import of Certain Pharmaceutical
Products from India); WT/DS140 (European Communities - Anti-Dumping Investigations Regarding
Unbleached Cotton Fabrics from India); WT/DS63 (United States - Anti-Dumping Measures on Imports of
Solid Urea from the Former German Democratic Republic); WT/DS262 – United States – Sunset Reviews of
Anti-Dumping and Countervailing Duties on Certain Steel products from France and Germany; WT/DS247 –
United States – Provisional Anti-Dumping Measure on Imports of Certain Softwood Lumber from Canada;
WT/DS239 - United States – Anti-dumping Duties on Silicon Metal from Brazil; WT/DS229 – Brazil – Anti-
Dumping Duties on Jute Bags from India.
30
United States - Anti-Dumping Duties on Imports of Colour Television Receivers from Korea, complaint by
Korea (WT/DS89/1), Australia - Anti-dumping Measures on Imports of Coated Woodfree Paper Sheets,
complaint by Switzerland (WT/DS119/1), United States - Anti-Dumping Investigation Regarding Imports of
Fresh or Chilled Tomatoes from Mexico, complaint by Mexico (WT/DS49), Venezuela - Anti-Dumping
Investigation in Respect of Imports of Certain Oil Country Tubular Goods (OCTG), complaint by Mexico
(WT/DS23).
31
Antidumping Agreement, art. 2. The dumping margin should be calculated by the comparison between the
price practiced in the importing market and the price in the normal "course of trade". The determination of
those factors involves many economical data.
32
Antidumping Agreement, art.3.
33
Antidumping Agreement, art. 5.
34
Antidumping Agreement, art. 6 and 11.2.
 14

their status of developing countries, but the respective provision related to that is vague and thus

does not establish any binding obligation to minimize the effects of AD measures against imports

from developing countries35.

The Brazilian situation is worthy of notice since the country is one of the developing

countries that became a frequent user of AD measures and, at the same time, Brazilian products also

suffer from measures abroad. An industry historically affected by AD measures is steel, which has

competitive prices and technology but suffers from almost permanent measures applied by both the

United States and the European Community36. Therefore, the country exemplifies the point

presented in this article: the opening markets of developing countries in the 1980s promoted the

organization of domestic pressure groups, who foresee in AD measures one of the last remaining

bastions against foreign products. On the other hand, the increasing insertion in foreign markets

makes developing countries' products a preferential target for AD measures.

Two recent changes in the international trade system must also be addressed, as they

bring new factors to the AD world. First, the accession of the People's Republic of China to the

WTO will affect the national investigating authorities' freedom to use AD measures against Chinese

imports, which are traditional targets of AD measures throughout the world. One may also foresee

that the Chinese complaints to the DSB will significantly increase the number of cases already

existing.

Another change is that developing countries are mostly dedicated to the qualification of

national bureaucrats to deal with international negotiations and disputes. This trend will also

35
In fact, art. 15 of the Antidumping Agreement only asserts that "special regard" shall be given to
developing countries, and that "possibilities of constructive remedies" should be searched for prior to the
adoption of any AD measures against products from those countries.
36
About this industry, see Ávila e Lima, 'O protecionismo na indústria siderúrgica norte-americana'. In:
Welber Barral (ed.) O Brasil e o protecionismo. São Paulo: Aduaneiras, 2002.
 15

contribute to a greater number of cases related to AD, if we consider the highly controversial aspects

present in the Antidumping Agreement and in national investigating practices37.

Another feature concerning AD measures and developing countries refers to the dubious

legitimacy of these measures in regional trade agreements. In economic terms, the use of AD

measures in regional integration is contested, and the adoption of antitrust regulation instead is

recommended. In legal terms, the broad language of Article XXIV - the infamous "substantially all

the trade" - does not clearly require the extinction of AD measures as a requisite for GATT-

compatible regional trade agreements. Consequently, AD has been used even among trade

partners38.

IV - Current situation

The experience of many WTO Members makes AD measures an obligatory subject

during the preparation of the Ministerial Conferences at Seattle and at Doha. Many Members

presented proposals to modify the Antidumping Agreement. Since Seattle, several Members have

been noticing the increasing use of AD measures and advocated a review of the text of the

Antidumping Agreement.

Indeed, during the preparation for the Seattle Conference, communications from several

countries, and mainly from developing countries, had insisted on the need for clarification of the

37
Brazil is already involved in many disputes on this subject: United States - Certain Measures Regarding
Anti-Dumping Methodology (WT/DS239), Brazil - Anti-Dumping Duties on Jute Bags from India
(WT/DS229), European Communities - Anti-dumping duties on malleable cast iron tube or pipe fittings from
Brazil (WT/DS219), United States - Continued Dumping & Subsidy Offset Act of 2000 (WT/DS217), Turkey -
Anti-dumping duty on steel and iron pipe fittings (WT/DS208).
38
In fact, AD measures have been an additional factor of disputes against Argentina, who is a frequent user
of measures against Brazilian products. One dispute on this matter was taken under the Brasilia Protocol
arbitration system, but the decision identified a "legislative gap" in the matter (grounded on a confusion
between antidumping rules and competition laws); due to this, Brazil referred the case to the DSB. Argentina
- Definitive Anti-Dumping Duties on Poultry from Brazil (WT/DS241).
 16

Antidumping Agreement39. Some Members reinforced the view that effective rules to reduce the

application of AD measures against developing countries should be adopted40. Japan presented a

grounded and interesting proposal asking for the application of AD measures only against the

predatory price41, a proposal that was followed by Chile42.

The Permanent Mission of Brazil at Geneva was also interested in the subject: the

document presented by Brazil pointed out gaps in the Antidumping Agreement, which could allow

its use as a protectionist device, and the lack of clarity of the procedures prescribed by the

Agreement. Thus, Brazil proposed greater effectiveness in the provision that asserted advantages for

developing countries, as well as the reform of the provision related to the ability of panels to review

decisions of national authorities43.

The proposals have searched for inserting the matter into the negotiations agenda, in

order "to strengthen and to explain the disciplines and to facilitate its implementation, and to assure

that they operate in way to support the trade liberalization and the economic development"44. As

immediate actions, they were intended to: a) forbid the initiation of an antidumping investigation

where an investigation of the same product from the same Member had resulted in a negative

finding within one year; b) mandatory character of the "lesser duty rule" when AD measures are

39
See the position papers presented by South Africa (WT/L/317), Colombia (WT/GC/W/315), Korea
(WT/GC/W/235/Rev.1), Guatemala (WT/GC/W/330), Kenya (WT/GC/W/200) and Romania (WT/GC/W/319).
New Zealand proposed the elimination of art. 14, which allows the imposition of AD measures to protect
industries of third country (WT/GC/W/338).
40
WT/GC/W/354 (Communication of Cuba, Dominican Republic, Egypt, El Salvador, Honduras, India,
Indonesia, Malaysia, Nigeria, Pakistan, Sri Lanka and Uganda).
41
WT/GC/W/240 and WT/WGTCP/W/122.
42
WT/GC/W/366.
43
WT/GC/W/269.
44
WTO, Ministerial Text: revised draft, § 40. However, even if this mandate had included antidumping
regulation in the negotiations agenda, it remained between brackets, because of the resistance of the United
States, once “Ambassador Barshevsky has already said that the antidumping law is not negotiable”,
Hufbauer, op .cit., p. 3.
 17

imposed against imports from developing countries45; c) explanation of the methodology for

determination of dumping margins, in a way to reduce discretion in this regard.

In a second moment, the draft had proposed an implementation mechanism that should

approach: a) rules aimed at avoiding the arbitrary or protectionist use of AD measures; b)

strengthening art. 15 in a way to create specific provisions to protect developing countries; c)

creating technical barriers for the application of AD measures; d) new wordings for the standard of

review that currently forces the panels to grant deference to the methodology used by national

authorities.

These were the proposals that remained on the table, when negotiations in Seattle were

suspended, in a political deadlock, when the U.S. was isolated in relation to AD46.

At the Doha Conference, the issue returned to the negotiating table, but the U.S.

negotiators presented the same resistance demonstrated earlier47. The Ministerial Declaration,

therefore, just mentioned general guidelines on the matter, without any commitment from the

Members: the negotiations should aim "at clarifying and improving disciplines under the

Agreements on Implementation of Article VI", but "preserving their basic concepts, principles, and

effectiveness"48. One may notice that negotiators should indicate, already in the first phase of

negotiations, the provisions that they seek to clarify and improve in the subsequent phase.

45
As to the U.S., Jackson asserts that "[t]he U.S. law does not permit this amount of discretion [to apply a
lesser duty than the margin of dumping], a fact that reflects congressional suspicion of executive-branch
implementation of these laws, as well as the pressures of domestic producers who are seeking to use the
antidumping laws as a way to limit the importation of competing goods" (The world trading system.
Cambridge (MA): MIT, 1997, p. 273).
46
For an interesting report on the U.S. position in Seattle, see General Accounting Office (GAO), Seattle
Ministerial. Washington: GAO, 2000, p. 6.
47
Speaking for Brazil, Minister Celso Lafer pointed the gaps in agreements as encouragement to
protectionism: "Brazil supports the revision of the Anti-Dumping Agreement, with a view to curbing its
abusive utilization for the protection of inefficient sectors in developed as well as in developing countries"
(WT/MIN(01)/ST/12).
48
WT/MIN(01)/DEC/W/1, par. 28.
 18

Since the Doha Conference, the proposals presented by WTO Members reflect the

anxiety towards reducing uncertainty in AD rules, on one side, and the perception that AD measures

may serve protectionist interests, on the other. Thus, the current proposals note concerns about the

lack of clarity in AD rules49, and the inoperativeness of rules intended to protect developing

countries50. A joint paper was presented by many countries in April 2002, enumerating the issues

that should be brought to analysis: clearer definitions in the AD Agreement (ordinary course of

trade, constructed value), the prohibition of zeroing, the lesser duty rule, the clause of public interest

and other procedural concerns51.

Whether theses issues will have the opportunity to be brought to the negotiating table is

still disputable. Indeed, the Ministerial Conference, in the paragraph related to the revision of AD

rules, presents a sparkling example of creative ambiguity as a tool to avoid a deadlock in multilateral

negotiations. However, as will shortly be discussed, this tool allows imperfections, when compared

with economic and political realities. In other words, creative ambiguity, in such a critical issue,

may provoke a future deal-breaker, since domestic constituencies may interpret the negotiated text

according to their own expectations.

This worrisome prospect should be better explained. The text brought from Doha by the

negotiators indicates the general dissatisfaction with the use of AD, and the negotiators' perception

that the relevant rules be clarified. On the other hand, the American negotiators inserted the

condition that the basic concepts shall be preserved.

The conditions for implementing such a challenging agenda will depend on practical,

economic, and political elements. An academic article is not capable of guessing the occurrence of

49
TN/RL/W/1, Communication from Canada.
50
TN/RL/W/4, Communication from India.
51
TN/RL/W/6, Communication from Brazil, Chile, Colombia, Costa Rica, Hong Kong, China, Israel, Japan,
Korea, Mexico, Norway, Singapore, Switzerland, Thailand and Turkey.
 19

these elements in the near future, but they may be cited as an indication of the and highly

improbable situation in which AD rules will be positively and peacefully changed.

The first element is the relevance of AD measures in the near future. If - a distant if - AD

measures become less important as a mechanism for trade defense, WTO Members would be more

flexible for negotiating the applicable rules. As mentioned earlier, the available data indicates the

opposite trend: both in developed and developing countries, AD measures have become an

important mechanism for appeasing domestic protectionist pressures, and an interface between

commitments for free trade and domestic industries who experiences tighter competition. In this

context, the progressive implementation of WTO rules in developing countries, as well as the

accession of new Members, creates new tension for inefficient industries.

A second element to be considered is the world economic scenario. In fact, there is a

direct correlation between economic recession and the use of AD dumping. A rapid recovery in

world markets would reduce domestic pressures for protection. If the opposite situation exists, the

reduction in sales provokes an excess of production, and consequently a general lamentation for the

defense of national markets. This is easily visible in industries such as steel or chemicals. At the

same time, on what is directly concerned with developing countries, the world recession means

higher interests for hugely indebted countries. The usual consequence - currency devaluation -

allows cheaper exports, but also provokes reactions from producers in importing countries.

A third element is political momentum, i.e., the general acceptance among WTO

Members that the revision of AD rules may be a trade-off. Obviously, the most complicated player

is the U.S., for its relevance in the negotiations, and also because of domestic constraints against

putting AD on the negotiating table, except for advocating small changes that could please local

industries.
 20

The American dilemma should be examined, for its relevance in the possibility of this

uncertain political momentum. As mentioned, trade defense is a pillar in U.S. trade policy, and the

issue occupies a unique place in domestic trade politics52. A rational explanation for that is the fact

that the U.S. is one of the main users of AD measures, and the Administration's struggle to keep this

mechanism untouched is also subject to oversight by representatives and interested industries. This

behavior may be understood by the United States domestic politics, in which any proposal of

alteration in antidumping rules will collide against the powerful action of pressure groups close to

the U.S. government. The changes, if the United States accepts them, will certainly refer to

procedural requirements. Such requirements have smaller electoral implications and they are like

reinforcements for the "playing field" of international trade to the public's eyes.

But - also from a foreigner's eyes - the American intransigence on the issue defies

rational explanations. Such intransigence is only understandable if one considers how deeply and

sacredly AD is intricate in U.S. trade policy. In addition, some American policy-makers seem to

genuinely believe that AD measures really serve to confront "unfair imports", rather than being an

instrument for hardly desguised protectionism.

Only these irrational factors could explain the battle in American Congress to approve

any reference to the modification of AD rules, in the Trade Promotion Authority (TPA) final text. At

the end, the TPA still tries to limit the presidential capacity to negotiate AD rules. In fact, Congress

directs the President "to preserve the ability of the United States to rigorously enforce its trade laws

52
According to O’Halloran, “interest group influence has already been incorporated into the regulatory
process through the procedures that govern administrative decision making. That is, the standards by which
industries qualify for government assistance, whether it be anti-dumping actions or trade adjustment
assistance, are themselves the result of the political process” (Politics, process, and American trade policy.
Ann Arbor: University of Michigan, 1994, p. 181).
 21

[...] and avoid agreements that lessen the effectiveness of domestic and international disciplines on

unfair trade"53.

These limitations in the U.S. bargaining position may have negative consequences for the

Doha negotiating agenda, and for the political momentum to improve the discipline of AD rules.

The historical record of the Uruguay Round negotiations indicate how this political momentum is

necessary for any agreement, and how an obscure agreement may lead to further problems, specially

when AD in on the table.

At the end of the Uruguay Round, the Clinton Administration tried to conclude a deal,

but AD was a hindrance. At the end of the day (or rather, at dawn), U.S. negotiators accepted the

final text of the Antidumping Agreement, a text that embodied many exceptions. Among these

exceptions, the USTR commemorated the approval of article 17.6, then expected to serve as a

escape clause for American trade practices, since that article brings special procedural rules for

panels and the Appellate Body, urging them to concede greater deference to investigating authorities

in AD cases54.

The subsequent practice at the DSB proved that American expectations were

exaggerated55. Recent cases considered that to concede deference is not equivalent to admitting any

53
TPA, Sec. 2102(b)(14)(A). Besides, the TPA demands the President to present a specific report regarding
international agreements that imply changes in domestic trade laws (Sec 2104(d)(3).
54
Antidumping Agreement, art. 17.6. This disposition provides for a greater deference to the decisions of
national authorities, once "[w]here the panel finds that a relevant provision of the Agreement admits of more
than one permissible interpretation, the panel shall find the authorities' measure to be in conformity with the
Agreement if it rests upon one of those permissible interpretations". On this issue, John Jackson noted: “Can
you imagine something so arcane as the standard-of-review issue becoming a deal breaker? Apparently, that
was nearly the case. The standard-of-review question was one of three or four issues that could have broken
apart the WTO negotiations. This paragraph does not appear in the dispute settlement text; it is in the
antidumping text (Article 17.6). The two sentences may be contradictory, which is a typical outcome of
negotiations!”. Cf. Jackson, Proceedings ASIL Conference 1994, p. 139.
55
The Message from the President of the United States to the Congress, transmitting the Uruguay Round
results, considered that "[t]he Antidumping Agreement also contains the special standard of review to be
applied by WTO panels in resolving antidumping argue. This standard will preclude panels from second-
guessing U.S. antidumping determinations and from rewriting the terms of the Antidumping Agreement
 22

interpretation by national authorities. Still more recently, these reports are being criticized in the

U.S. as "judicial activism" of the panels. A political consequence of such criticism is that the TPA

also directs the President to present proposals that create a stricter standard of review in AD cases,

and thus increase the deference for the American authorities' practices56. This issue is not expressly

embodied in the Doha Agenda, and may serve as a new constraint for the reaching of political

momentum in the negotiation of AD rules.

Conclusion

The relevant elements - practical usefulness of AD, the world economic scenario,

political momentum - and the many domestic and international factors that affect their occurrence,

indicate how difficult any change in AD rules may be. By the same token, such difficult negotiations

may provoke two situations. On one hand, negotiators may only agree on procedural changes, more

palatable than changing the material requirements for the application of AD measures. On the other

hand, difficult situations lead to solutions de compromis, vague texts that may be initially acceptable

by all the Members, but that will be brought later before the DSB. In the latter case, the systemic

risk is a mounting criticism that WTO's judicial activism could undermine national sovereignty. A

legal scholar would claim that such criticism is ungrounded, since the judicial function - in any legal

system - is to apply a chosen interpretation upon the norm; if its text is vague, the inevitable result

will be innovative interpretation. But the appeal to sovereignty is politically feasible, and may

constitute a menace to the legitimacy of the current world trading order.

under the stews of legal interpretation". United States, Message from the President, (103d Congress, 2d
Session, House Document 103-316, vol. 01). Washington: U.S: Government Printing Office, 1994, p. 807.
56
TPA, Sec. 2101(b)(3)(B): "the Congress is concerned that dispute settlement panels of the WTO and the
Appellate Body appropriately apply the standard of review contained in Article 17.6 of the Antidumping
Agreement [...]".
 23

For developing countries, the negotiation of AD rules may constitute a difficult task,

considering that:

- most developing countries are less familiarized with AD practice and are hardly aware of its

negotiating history;

- there is an imperfect perception as to the future impact of AD measures in their exports;

- few developing countries make any analysis of the construction that may be done in the future by

panels and AB of what now seem minor changes in the AD Agreement; however

- these changes, even if limited to procedural aspects, induce advantages for experienced Members

when involved in disputes before the DSB.

In this sense, among the proposals presented so far, the U.S. negotiators tend to accept

only those regarding the methodology and procedures57. Proposals aimed at elevating the de minimis

margins also represent great political risk to the United States. Other proposals, like the rewriting of

art. 15 in order to reach material guaranties to developing countries, may create opposition due to

divergences among Members. The proposal of assumption by which dumping occurs when the

exporting Member is a developed country is not realistic, and therefore will be hardly acceptable by

other Members.

However, negotiations on technical and procedural criteria can have unexpected effects

for developing countries. In theory, if stricter rules on AD measures are negotiated, legal security

will be reinforced in the matter. However, the Uruguay Round experience demonstrates that the

complexity in procedural requirements benefits traditional users of AD measures, whose skilled

57
As explained by a discloser report of the General Accounting Office to the North American Congress,
“only one of the four cases against U.S. antidumping measures resulted in a WTO ruling, and none of the
cases against U.S. antidumping measures were seen as resulting in weakened U.S. protections (....).
According to Commerce officials, the change in procedures does not weaken the U.S. antidumping regime”
(General Accounting Office, World Trade Organization – issues in dispute settlement. Washington: GAO,
2000, p. 20).
 24

bureaucrats in the matter are much more capable of accomplishing the provided requirements and

challenge the application thereof by other countries.

The case Guatemala-cement is a key example of the relevance that procedural issues can

reach. This also explains the U.S. attachment to the constant revision of the AD Agreement, creating

a special rule of interpretation for the antidumping procedure. This standard of review was

considered as one of the main victories of the Uruguay Round by the U.S. government, and it will be

discussed again in the near future. In fact, few countries besides the United States will take

advantage of these complex procedural rules in disputes before the DSB.