The Right Way to ‘Enforce’ Trade Agreements

On Tuesday, the Office of the U.S. Trade Representative launched a formal dispute at the World Trade Organization over China’s imposition of antidumping and countervailing duties on U.S. exports of chicken broilers.  According to a summary of the U.S. complaint, China implemented its antidumping and countervailing duty laws in manners that violate that country’s WTO obligations.  The alleged violations include: failure to observe numerous transparency and due process requirements; failure to properly explain the basis for its findings and conclusions; failure to properly calculate margins of dumping and subsidy amounts, and; failure to support findings of material injury to the Chinese chicken industry.

Under the WTO agreements, member governments are entitled to use their domestic “trade remedies” laws to measure and address imports that are alleged to be “unfairly” priced and injurious of the domestic industry.  However, execution of those laws must comport with certain standards – fairly deferential standards, no doubt – that are spelled out in the WTO Antidumping Agreement and the WTO Agreement on Subsidies and Countervailing Measures.  The basis for the U.S. complaint is that those standards were not met by the Chinese government, when it investigated and ultimately foundU.S.chicken exporters to be engaging in injurious dumping and benefiting from government subsidies.

I would say something about “just deserts” or “comeuppance” or “what goes around, comes around,” but that would wrongly imply that the U.S. poultry industry is to blame for U.S. antidumping abuse or its protégé, proliferating global antidumping abuse.  Besides, there’s a different point to be made on this occasion.  That is, transactions between parties in the world’s two largest economies are going to generate frictions from time to time.  Sometimes those frictions will rub raw.  But, by and large, there are proven mechanisms in place to alleviate pressures and resolve disputes that should be respected.  Regardless of the final outcome in this case – the parties could settle after consulting over the issues or, barring settlement, the issues could be adjudicated by a dispute settlement panel and, ultimately, by the WTO Appellate Body – the course being taken comports with the meaning of trade enforcement and respects the rules of international trade.

Kudos to the USTR and his General Counsel’s office for doing the legal research and analyses necessary to ensure the strongest of cases, and for reminding antsy lawmakers across town that there are reasonable alternative to trade unilateralism.