DR. RAM MANOHAR LOHIYA NATIONAL NATIONAL LAW UNIVERSITY UNIVERSIT Y LUCKNOW
SEMESTER VII (2016-17)
INTERNATIONAL TRADE LAW LAW
THE BYRD AMENDMENT: A STUDY OF ITS INCONSISTENCIES INCONSIST ENCIES WITH TRADE AREEMENTS AREEM ENTS (F OR THE !ARTIAL FULFILLMENT OF THE DEREE OF B.A. LLB (H ON ))
SUBMITTED BY " "
S UBMITTED TO
ARIMA ! ARAKH SINH
M S. K IRTI IRTI
R OLL OLL NO . #7 !ROFESSOR (L (L AW)
A SST .
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ACKNOWLEDEMENT
I would like to extend my sincere thanks to My teacher and my mentor Ms. Kirti Singh for giving me this wonderful opportunity to work on this project and for her able guidance and advice !ice "hancellor #r. $urdeep Singh Sir and #ean %&cademics' (rofessor ".M. )ariwala for their encouragement and *nthusiasm+ My seniors for sharing their valuable tips+ &nd my classmates for their constant support.
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INTRODUCTION
#umping is in general a situation of international price discrimination where the price of a product when sold to the importing country is less than the price of the same product when sold in the market of the exporting country., r dumping is said to occur when the goods are exported by a country to another country at a price lower than its Bnormal %market' value.C6 #umping per se is not against $&-- obligations. -his practice is condemned only when it causes injury to the domestic industry. -he "#S& as mentioned in the preliminary draft provided for the distribution of collected anti@ dumping and countervailing duty revenues to Daffected domestic producersE i.e. those who support the petition for investigation. -he total receipts under this account in 600> itself were F6.5> billion. -he complaining parties alleged that the DoffsetsE provide a strong incentive to the domestic producers to file or support petitions for anti@dumping or anti@subsidy measures thereby distorting the application of the standing reGuirements provided in the &#& and S"M &greement. It was also argued that the "#S& makes it more difficult for exporters to secure an undertaking with the authorities since the affected domestic producers have a vested interest in opposing such undertakings in favour of collection of anti@dumping or countervailing duties5 again violating the above agreements. -he 4S thus gave arguments in its defence against the issues raised by the complaining parties. -he project will be a study of the arguments given by the complaining countries and thus trying to establish the "#S& to be inconsistent with international trade law principles and agreements as the authorEs stance is in favour of the complainants. A DETAILED BACKROUND OF THE CASE
-he 4nited States of &merica is a federal presidential constitutional republic having a capitalist mixed economy. It is the largest importer of goods and second largest exporter. 4S& became a member of ;- in ,HH> and is also a party to the &greement on Implementation of &rticle !I of $&-- ,HH7 which allows member states to enact measures designed to counter the dumping or
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)udith "ako )ohann 9uman and )orge Miranda A Handbook on Anti-Dumping Investigations %"ambridge= 4K= "ambridge 4niversity (ress 6005' ,. 6 Ministry of "ommerce and Industry #epartment of "ommerce $overnment of India Anti-Dumping & Anti-subsidy measures: FAQs, http=JJcommerce.nic.inJtraderemediesJadmeasures5.asp %accessed ctober ,0 60,8'. 5 K.#. 3aju World Trade rgani!ation Agreement on Anti-Dumping: A "ATT#WT and Indian $egal %urisprudene %-he 2etherlands= Kluwer /aw International 600:' ,7>.
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subsidisation of imported products+ it also specifies the means through which states can thwart unfair trade practices such as price discrimination. In this case 4S& used to provide subsidies to its domestic producers to produce certain goods. It was felt that the maximum retail price of foreign products in 4S& was lower than for 4S&Es own products thus affecting the domestic producers in 4S&. -he 4S& B"ountervailing and &ntidumping #utiesC law provided protection to domestic industries from import competition by penalising certain pricing and subsidy practices of foreign producers and governments. -he duties forced foreign producers to either increase their selling price in 4S& to incorporate the countervailing and antidumping duties tariff or to withdraw from the market entirely to avoid payment thus reducing import competition faced by 4S&. In order to further restore the conditions of fair trade and aid 4S& enacted the "#S& as part of the &griculture 3ural #evelopment 1ood and #rug &dministration and 3elated &gencies &ppropriations &ct 600,. -he "#S& provides that the 4S& "ommissioner of "ustoms %L"ustomsL' shall distribute on an annual basis duties assessed pursuant to a countervailing duty order an anti@dumping duty order or a finding under the 4S& &ntidumping &ct of ,H6, to Laffected domestic producersL for LGualifying expenditures.L7 &n Laffected domestic producerL is defined as a domestic producer who= %a' was a petitioner or interested party in support of the petition with respect to which an anti@dumping duty order a finding under the &ntidumping &ct of ,H6, or a countervailing duty order has been entered+ and %b' remains in operation.> -he term LGualifying expendituresL refers to expenditures on specific items identified in the "#S& which were incurred after the issuance of the anti@dumping duty finding order or countervailing duty order.8 -hose expenditures must relate to the production of the same product that is subject to the anti@dumping or countervailing duty order with the 7
-he "#S& provides that= Lduties assessed pursuant to a countervailing duty order an antidumping duty order or a finding under the &ntidumping &ct of ,H6, shall be distributed on an annual basis under this section to the affected domestic producers for Gualifying expenditures. Such distribution shall be known as the continued dumping and subsidy offset.L > Laffected domestic producerL is defined as= N any manufacturer producer farmer rancher or worker representative %including associations of such persons' that O %&' was a petitioner or interested party in support of the petition with respect to which an anti@dumping duty order a finding under the &ntidumping &ct of ,H6, or a countervailing duty order has been entered and %' 3emains in operation. "ompanies businesses or persons that have ceased the production of the product covered by the order or finding or who have been acGuired by a company or business that is related to a company that opposed the investigation shall not be an affected domestic producer. 8 -he term LGualifying expenditureL is defined as Lan expenditure incurred after the issuance of the antidumping duty finding or order or countervailing duty order in any of the following categories= %&' Manufacturing facilities+ %' *Guipment+ %"' 3esearch and development+ %#' (ersonnel training+ %*' &cGuisition of technology+ %1' 9ealth care benefits to employees paid for by the employer+ %$' (ension benefits to employees paid for by the employer+ %9' *nvironmental eGuipment training or technology+ %I' &cGuisition of raw materials and other inputs+ %)' ;orking capital or other funds needed to maintain production.L
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exception of expenses incurred by associations which must relate to the same case. n 6, #ecember 6000 &ustralia rail "hile the *uropean "ommunities India Indonesia )apan Korea and -hailand made a joint reGuest for consultations with the 4nited States of &merica under &rticle 7 of the #S4 %#ispute Settlement 4nderstanding' &rticle <'. &t its meeting of 65 &ugust 600, the #S established the (anel. -hus the terms of reference of the (anel were= B-o examine in the light of the relevant provisions in the covered agreements cited by &ustralia rail "hile the *uropean "ommunities India Indonesia )apan Korea and -hailand in document ;-J#S6,PJ> by "anada in document ;-J#S657J,6 and by Mexico in document ;-J#S657J,5 the matters referred by &ustralia rail "anada "hile the *uropean "ommunities India Indonesia )apan Korea Mexico and -hailand to the #S in those documents and to make such findings as will assist the #S in making the recommendations or in giving the rulings provided for in those agreements.C -he following pages will argue one by one as to why "#S& is inconsistent with international trade agreements based on the issues raised in the actual case. ARUMENTS
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CDSOA !ROVIDES F INANCIAL I NDUCEMENT
&rticle >.7 of &# and &rticle ,,.7 of S"M provide that O 'An investigation s(all not be initiated unless t(e aut(orities (ave determined, on t(e basis o) an e*amination o) t(e degree o) support )or, or opposition to, t(e appliation e*pressed by domesti produers o) t(e like produt, t(at t(e appliation (as been made by or on be(al) o) t(e domesti industry+ T(e appliation s(all be onsidered to (ave been made by or on be(al) o) t(e domesti industry i) it is supported by t(ose domesti produers (ose olletive output onstitutes more t(an ./ per ent o) t(e total
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prodution o) t(e like produt produed by t(at portion o) t(e domesti industry e*pressing eit(er support )or or opposition to t(e appliation+ Hoever, no investigation s(all be initiated (en domesti produers e*pressly supporting t(e appliation aount )or less t(an 0. per ent o) total prodution o) t(e like produt produed by t(e domesti industry+1
&# &rticle >.7 and S"M &rticle ,,.7 deal with the procedure of investigation to determine the existence degree and effect of any alleged dumping. &s per the "#S& the 4S& "ommissioner of "ustoms shall distribute duties assessed pursuant to a countervailing duty order an anti@dumping duty order or a finding under the 4S& &ntidumping &ct of ,H6, to Laffected domestic producersL for LGualifying expenditures.L In this context &rticles >.7 of &# and ,,.7 of S"M reGuire a Member to conduct an objective and good faith examination of the level of support for the applicationJpetition. 9owever such objective examination is not possible if "#S& provides financial inducement to domestic producers for making or supporting anti@dumping applications as such support would be not be genuine. #ue to such financial inducement majority of petitions will achieve the levels of Guantitative support reGuired under these articles than would have been the case without "#S& and producers would rather support applications than genuinely oppose them. Such a formal declaration of support is not always evidence of BsupportC within the meaning of these provisions. 3ather it is BsupportC for the offset payments. -here is a risk that the offset payments will influence the decision of the domestic producers in an indeterminate number of cases. & ;- Member can initiate an investigation ex officio+ doing so it does not need by virtue of legal compulsion any input from the private sector and since governments have the institutional possibility to act ex officio the Dupon reGuestE %i.e. via petitions' route must indeed be the outcome of an autonomous private decision to this effect and not a government@mandatedJinfluenced decision.P It was held in relation to &rticle 5., of the &nti@#umping &greement in 2nited 3tates Antidumping 4easures on 5ertain Hot-6olled 3teel 7roduts )rom %apan 8 that Binvestigating
authorities are not entitled to conduct their investigation in such a way that it becomes more likely that as a result of the fact@finding or evaluation process they will determine that the domestic industry is injured.C -he situation in the current dispute is analogous i.e. 4S& cannot be entitled to enact a legislation that makes it more likely that the needed levels of domestic industry support will be reached in any investigation. & literal reading of the texts of &rticle >.7 of &# and &rticle ,,.7 of P
9enrik 9orn and (etros ". Mavroidis B4nited States @ "ontinued #umping and Subsidy ffset &ct of 6000C World Trade 6evie 7%5' %600>' >6> O >>0. : &ppellate ody 3eport 2nited 3tates 9 Anti-Dumping 4easures on 5ertain Hot-6olled 3teel 7roduts )rom %apan, ;-J#S,:7J&J3 adopted 65 &ugust 600, #S3 600,=< 78HP .
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S"M Lexpressly reGuire an authority to examine %enGuire into the nature look closely or analytically' the evidence as to those thresholds and determine %establish precisely' industry support and not to merely tally up numbers presented by applicants as argued by 4S&. -hus for the thresholds set out in &rticle >.7 of the &# and &rticle ,,.7 of S"M to be meaningful a ;- Member is not to distort the degree of support for or opposition to any particular application. Moreover there is the possibility that when only petitioning companies receive offset payments they obtain a competitive advantage over non@petitioning domestic companies as a kind of selective subsidy which will encourage all domestic producers of a petitioned product to support the petition so as not to be at a competitive disadvantage if and when offset payments are doled out.H &n BobjectiveC examination reGuires that the relevant facts Bbe investigated in an unbiased manner without favouring the interests of any interested party or group of interested parties in the investigation.C In the 4S as a result of their enacted "#S& company claims under the approached F6 trillion in fiscal year 6007,0 thus giving clear evidence as to the effects such financial inducement can have. In the present case 4S& is favouring the interests of certain parties %producers who support genuinely the imposition of measures' over those of other interested parties %including not only the exporters but also the domestic producers who oppose the initiation'. -his contravenes the fundamental principle that the legal framework of a rules O based system must be established in an impartial and objective manner. "#S& payments may also reduce the receiving industryEs incentive to take the necessary steps to remain competitive such as changing the product mix or developing more efficient methods of production and since the affected industry only Gualifies for disbursements as long as it manufactures a particular product firms may decide to produce the good longer than it is efficient to do so rather than allocating resources to producing alternative products that could help firms return to competitiveness.,, In the 4S far from meeting its goal of Brestoring conditions of fair tradeC the yrd &mendment turned out to be little more than a wasteful drain on the federal budget and a windfall for industries because from fiscal year 600, to fiscal year 6007 "ustoms distributed over F, billion in yrd &mendment payments to a seemingly broad array of 4.S. producers @ PP0 companies+ but despite this apparent breadth almost half of the payments went to only five
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"laire 9ervey B-he yrd &mendment attle= &merican -rade (olitics at the ;-C Hastings International and 5omparative $a 6evie 6P %6005' ,5,. ,0 -udor 2. 3us B-he Short 4nhappy /ife of the yrd &mendmentC ;2 %ournal o) $egislation and 7ubli 7oliy ,0 %6008 O 600P' 76P. ,, <onomi Analysis o) t(e 5ontinued Dumping and 3ubsidy At o) 0///+ "ongressional udget ffice March 6 6007. Qhttp=JJwww.cbo.govR.
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companies.,6 &dditionally rather than benefiting from the yrd &mendment 4.S. exporters suffered the brunt of its negative economic conseGuences as after the amendment was declared ;-@incompatible several nations began retaliating against 4.S. exports under ;-@mandated guidelines.,5 Moreover &merican taxpayers would have to fund the government personnel increases needed to process any additional administrative investigations. &lso the "#S& conspicuously lacks a reGuirement that the money received as an offset be spent in a certain worthwhile manner by domestic companies and the absence of a specific reGuirement for what is to be done with the money collected through the duties can be said to violate the intent of the antidumping statutes which is to correct trading injustices rather than punish offenders.,7 1urthermore foreign and domestic firms must divert their resources from generating wealth to hiring lawyers and economic experts to advocate their positions before the government agencies conducting &#J"!# investigations again resulting in much harm to &merica itself. It was highlighted in the (anelEs decision in 2nited 3tates - 5ontinued Dumping And 3ubsidy ))set At ) 0///=. that "#S& enacted in the 4nited States in fact implies a return to the situation
which existed before the 4ruguay 3ound &greement and which led to the introduction of &# &rticle >.7 and S"M &rticle ,,.7 in their current form i.e. to ensure that support was not just assumed to exist but actually existed and that the support expressed by domestic producers was evidence of the industry@wide concern of injury being caused by dumped or subsidied imports. ,.6.
AMERICA D ID N OT ACT I N OOD F AITH
&rticle 5,., of the !ienna "onvention on /aw of -reaties provides that a treaty shall be interpreted in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and purpose+ and &rticle 5.6 of the #S4 reGuires that the provisions of the covered agreements including the &nti@#umping and the S"M &greements are to be interpreted in good faith and in accordance with the customary principles of public international law one of them being the principle of good faith. &dhering to the ;- &greements does not mean simply that the Members should take the text literally although generally that is what is favoured however there are also numerous circumstances which at the time the negotiators could not have ,6
-udor 2. 3us B-he Short 4nhappy /ife of the yrd &mendmentC ;2 %ournal o) $egislation and 7ubli 7oliy ,0 %6008 O 600P' 76P. ,5 Ibid. ,7 Meredith Schutman B&ntidumping &nd -he "ontinued #umping &nd Subsidy ffset &ct f 6000= & 3enewed #ebateC 5ardo!o %ournal o) International and 5omparative $a ,, %6007' ,08H. ,> (anel 3eport 2nited 3tates 9 5ontinued Dumping and 3ubsidy ))set At o) 0///, ;-J#S6,PJ3 ;-J#S657J3 adopted 6P )anuary 6005 as modified by &ppellate ody 3eport ;-J#S6,PJ&J3 ;-J#S657J&J3 #S3 6005=II 7:H.
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foreseen.,8 -he &ppellate ody has stated in 2nited 3tates - Antidumping 4easures on 5ertain Hot 6olled 3teel 7roduts )rom %apan=> that the rules of treaty interpretation in &rticles 5, and 56 of the
!ienna "onvention apply to any treaty in any field of public international law and not just to the ;- agreements. -hese rules of treaty interpretation impose certain common disciplines on treaty interpreters irrespective of the content of the treaty provision being examined and irrespective of the field of international law concerned. It was also decided in 2nited 3tates - 3tandards )or 6e)ormulated and 5onventional "asoline =8 that one of the corollaries of the Dgeneral rule of
interpretationE in the !ienna "onvention is that interpretation must give meaning and effect to all the terms of a treaty. &n interpreter is not free to adopt a reading that would result in reducing whole clauses or paragraphs of a treaty to redundancy or in@utility. -hus in the present case the &rticle >.7 of &# and ,,.7 of S"M cannot be read so as to render the reGuirement of the prescribed Guantitative benchmark as meaningless without going into their real objects. In 23 - 3etion ?/=, =@ the (anel found that Bthe good faith reGuirement in the !ienna "onvention suggests thus that a promise to have recourse to and abide by the rules and procedures of the #S4 also in ones legislation includes the undertaking to refrain from adopting national laws which threaten prohibited conduct.C -his finding is eGually applicable to the current dispute. -he principle of good faith Bthat informs the provisions of the &nti@#umping &greement as well as the other covered agreementsC suggests that a promise to apply antidumping measures only under the circumstances provided for in &rticle !I of $&-- ,HH7 and pursuant to investigations initiated and conducted in accordance with the provisions of the &# &greement includes the undertaking to refrain from adopting national laws which threaten prohibited conduct. ,.5.
CDSOA UNDERMINES ARTICLE $.% O F AD AND ARTICLE 1$.% O F SCM
&rticle :.5 of &# and article ,:.5 of S"M provide that '2ndertakings o))ered need not be aepted i) t(e aut(orities onsider t(eir aeptane impratial, )or e*ample, i) t(e number o) atual or potential e*porters is too great, or )or ot(er reasons, inluding reasons o) general poliy+ 3(ould t(e ase arise and (ere pratiable, t(e aut(orities s(all provide to t(e e*porter t(e reasons
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Aoungjin )ung Sun 9yeong /ee B-he /egacy of the yrd &mendment "ontroversies= 3ethinking the (rinciple of $ood 1aith.C %ournal o) World Trade %6005' >7. ,P &ppellate ody 3eport 2nited 3tates 9 Anti-Dumping 4easures on 5ertain Hot-6olled 3teel 7roduts )rom %apan, ;-J#S,:7J&J3 adopted 65 &ugust 600, #S3 600,=< 78HP . ,: &ppellate ody 3eport 2nited 3tates 9 3tandards )or 6e)ormulated and 5onventional "asoline, ;-J#S6J&J3 adopted 60 May ,HH8 #S3 ,HH8=I 5 ,H (anel 3eport 2nited 3tates 9 3etions ?/=-?=/ o) t(e Trade At o) =@>, ;-J#S,>6J3 adopted 6P )anuary 6000 #S3 6000=II :,>.
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(i( (ave led t(em to onsider aeptane o) an undertaking as inappropriate, and s(all, to t(e e*tent possible, give t(e e*porter an opportunity to make omments t(ereon+1
(rice undertaking refers to Bvoluntary undertaking from any exporter to revise its prices or to cease exports to the area in Guestion at dumped prices so that the authorities are satisfied that the injurious effect of the dumping is eliminated.C60 -he &nti@#umping and S"M &greements provide the means for the early resolution of anti@dumping and countervailing duty investigations through the acceptance of undertakings. -he provision of "#S& providing financial inducement to domestic producers is inconsistent with &rticle :.5 of the &nti@#umping &greement and with &rticle ,:.5 of the S"M &greement because it will lead to the rejection of undertakings without a proper Breason+C and it is incompatible with the obligation of 4S& to conduct an objective examination of whether the acceptance of an undertaking would be Bappropriate+C and it undermines the object and purpose of those two provisions which is to provide an alternative remedy to the imposition of duties. Importing member enjoys wide discretion in order to decide whether or not to accept an undertaking. ut such discretion is not unlimited as it is implicit in &rticle :.5 of the &nti@#umping &greement and &rticle ,:.5 of the S"M &greement that authorities cannot reject an undertaking without examining first whether it would be BappropriateC to accept it and such examination must be objective not arbitrary. Such good faith reGuirement was set out to be relevant for these articles as well by the &ppellate ody in 2nited 3tates - Antidumping 4easures on 5ertain Hot-6olled 3teel 7roduts )rom %apan+ 0=
bject and purpose of &rticle : of the &nti@#umping &greement and &rticle ,: of the S"M &greement is to provide an alternative remedy to injurious dumping and subsidisation which while giving eGuivalent protection to the domestic producers is more beneficial for the exporters. In the present case if 4S authorities accept an undertaking no anti@dumping or countervailing duties will be assessed and conseGuently no offset will be distributed to the affected domestic producers. -hus through "#S& petitioners have a pecuniary interest in opposing the acceptance of undertakings. -hrough the offset payments "#S& is unduly influencing the outcome of the examination of the BappropriatenessC of accepting an undertaking which is reGuired to be made under &rticle :.5 of the &nti@#umping &greement and &rticle ,:.5 of the S"M &greement. ,.7.
CDSOA IS I NCONSISTENT WITH ARTICLE &:%(A) OF ATT
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&rticle :., of the &# &greement. &ppellate ody 3eport 2nited 3tates 9 Anti-Dumping 4easures on 5ertain Hot-6olled 3teel 7roduts )rom %apan, ;-J#S,:7J&J3 adopted 65 &ugust 600, #S3 600,=< 78HP. 6,
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Since "#S& violates substantive obligations of the $&-- ,HH7 the &# &greement and the S"M &greement as set forth in the above arguments "#S& also leads to the violation of the procedural and due process safeguards of &rticle <=5%a' of $&-- ,HH7 which imposes an obligation on Members to 'administer in a uni)orm, impartial and reasonable manner all its las, regulations, deisions and rulings++++1 In 2nited 3tates - 3tainless 3teel, the panel affirmed that anti@dumping
laws and regulations were Blaws and regulationsC within the meaning of &rticle <=, of the $&-,HH7 and therefore within the scope of the laws regulations decisions and rulings to which &rticle <=5%a' applies. In Argentina - 4easures A))eting T(e <*port ) Bovine Hides and T(e Import o) Finis(ed $eat(er ,00 the (anel was of the view that &rticle <=5%a' can involve an examination of whether there
is a possible impact on the competitive situation for traders due to alleged partiality unreasonableness or lack of uniformity in the application of customs rules regulations etc. In that case the (anel concluded in particular that an inherent danger created by a conflict of interest in involving domestic industry in the customs clearance process of the hides its domestic suppliers exported led to an administration of laws that was not Bimpartial.C In the present case "#S& similarly creates incentives that distort the process by which the #" establishes domestic industry support as well as the ability of the #" to enter into undertakings. -his has the potential to exacerbate the number of investigations initiated and continued against imports where such investigations may be without merit. y making it profitable to indicate support for petitions or avoid undertakings "#S& also creates an Binherent dangerC that &merican anti@dumping and countervailing duty laws will be applied in a partial manner so as to permit persons with adverse commercial interests to thwart the entry of imports. &s a result imports face treatment that is not fair reasonable or impartial. &ccordingly the "#S& results in a violation of &rticle <=5%a' of $&-- ,HH7. 1urther in Argentina - $eat(er ,0? the measure at issue was a resolution that permitted domestic industry to become involved with the custom clearance process of the goods of its domestic suppliers. -he issue examined by the panel was the effect the administrative measure had on the administration of "ustoms laws. -he administrative measure in the present case is "#S& i.e. the &ct itself which introduces financial incentives into the &merican system that are available only where investigations are brought and end with the imposition of a duty influencing the decisions of parties of the industry to bring or support petitions and thwart undertakings by creating
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(anel 3eport Argentina 9 4easures A))eting t(e <*port o) Bovine Hides and Import o) Finis(ed $eat(er, ;-J#S,>>J3 and "orr., adopted ,8 1ebruary 600, #S3 600,=! ,PPH. 65 Ibid.
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a potentially sieable financial reward+ therefore creating an inherent danger that imports will face unnecessary anti@dumping and countervailing duty investigations. ,.>.
CDSOA IS I NCONSISTENT WITH THE WTO AREEMENT
;- Members agreed to impose many limitations on their sovereign powers to promulgate and enforce domestic laws and regulations even in fiscal matters. 1or example &rticle III of the $&-,HH7 limits the power of Members with regard to taxation. &rticle !I of the $&-- ,HH7 and the S"M &greement restrain the otherwise sovereign power of Members to provide subsidies. ut here &merica has committed not to adopt measures that would constitute specific action against dumping or subsidiation except in accordance with the provisions of the $&-- ,HH7 as interpreted by the &# &greement and the S"M &greement. ased on the inconsistencies of "#S& with the $&-- ,HH7 the &# &greement and the S"M &greement &rcadia is in violation of &rticle
annexes to that agreement. OTHER ARUMENTS AND COUNTER ARUMENTS
It has been argued that the "#S& enabled 4.S. firms many of them small family@run companies to purchase new machinery hire more workers and compete head@to@head with unfairly traded imports from "hina.67 Supporters also believe that the "#S& creates a disincentive for foreign exporters to continue dumping and compensates domestic producers with financial resources that can be used to maintain competitiveness. (roponents of this view believe that trade remedies combined with the added benefit provided by the "#S& are worth the cost of the economic inefficiency because they promote trade fairness restore competitive balance and preserve critical 4.S. industries and jobs. 9owever to counter these arguments the author wishes to argue that although a few businesses have received millions of dollars in annual payments the vast percentage of companies received much less+ and almost half the payments went to only five companies.6> -he author also argues that due to the considerable transaction costs involved in filing and supporting trade remedy petitions %estimated to range from F>00000 for the simplest case to millions of dollars for more complex ones' it is possible that more efficient firms in an industry 67
4.S.@"hina *conomic and Security 3eview "ommission. 9earing on "hina and the ;-= &ssessing and *nforcing "ompliance. 1ebruary 5@7 600> Qhttp=JJwww.uscc.govJhearingsJR. 6> 3us B-he Short 4nhappy /ife of the yrd &mendmentC ;2 %ournal o) $egislation and 7ubli 7oliy 76P.
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might be less likely to support a trade remedy petition and so the "#S& mechanism could adversely affect the more efficient firms in a domestic industry while more inefficient firms receive a benefit.68 CONCLUSION
-he &ppellate ody in 2nited 3tates 9 5ontinued Dumping And 3ubsidy ))set At ) 0/// 0> said that an LexaminationL of the LdegreeL of support and not the LnatureL of support is reGuired i.e. it is the LGuantityL rather than the LGualityL of support that is the issue. ut the author differs as proved in the chapter on financial inducement because the practical scenario was evidently different i.e. there was support for the sake of money. -hus this provision certainly was not used as intended and thus changing circumstances reGuire changing interpretations. &s observed by a scholar repealing the yrd &mendment will serve to reduce costs for consumers promote exports and benefit the overall economy and it also reinforces the 4.S. commitment to trade liberaliation and strengthens its leadership in the world trade industry+ which could turn out to be a victory for both 4S and the worlds free trade system.6: 9ence the truth in the authorEs assertions can be inferred from the fact that the &ppellate ody in the 23-5D3A case ruled '*+, 4S& on all the other points except the point regarding financial inducement. -he
&ppellate ody recommended that the 4nited States Bbring the "#S& into conformity with its obligationsC under ;- agreements. 9owever it must be noted that 4S& failed to do so and by 6007 most of the complaining parties were authoried to Bsuspend concessionsC %retaliate' until the 4nited States complied most readily by repealing the lawN..and it was ultimately and rightly repealed in 600>. &s rightly stated since its passage "#S& has proven to be one of the worst pieces of trade legislation.6H 3egarding the future conseGuences of "#S& it was rightly noted that in case the &ppellate ody overruled the (anel decision on some technicality and upheld the yrd &mendment there would be a spurt of copycat legislation by other ;- members sounding the death knell for free trade and moreover the imposition of the anti@dumping duty and the conseGuent disbursement of this amount to the domestic industry in terms of the "#S& in effect constitutes a 68
<onomi Analysis o) t(e 5ontinued Dumping and 3ubsidy At o) 0///+ "ongressional udget ffice March 6 6007. Qhttp=JJwww.cbo.govR. 6P &ppellate ody 3eport 2nited 3tates 9 5ontinued Dumping and 3ubsidy ))set At o) 0///, ;-J#S6,PJ&J3 ;-J#S657J&J3 adopted 6P )anuary 6005 #S3 6005=I 5P>. 6: ' 7,P. 6H "ommittee on ;ays and Means Subcommittee on -rade 4nited States "ongress Written omments on te(nial orretions to 2+3+ trade las and 4isellaneous Duty 3uspension Bills, 0//., ;ashington #.".= 4nited States of &merica 600> 666.
,5
Ldouble jeopardyL to the exporters.50 /astly it is pertinent to mention that "#S& is an /// form of BprotectionismC that does not favour free trade and is thus not favoured in todayEs era of liberaliation and globaliation. BIBLIORA!HY BOOKS )udith "ako )ohann 9uman and )orge Miranda A Handbook on Anti-Dumping •
•
Investigations %"ambridge= 4K= "ambridge 4niversity (ress 6005' ,. K.#. 3aju World Trade rgani!ation Agreement on Anti-Dumping: A "ATT#WT and Indian $egal %urisprudene %-he 2etherlands= Kluwer /aw International 600:' ,7>.
) 432&/S •
9enrik 9orn and (etros ". Mavroidis B4nited States @ "ontinued #umping and Subsidy
•
ffset &ct of 6000C World Trade 6evie 7%5' %600>' >6> O >>0. "laire 9ervey B-he yrd &mendment attle= &merican -rade (olitics at the ;-C
•
Hastings International and 5omparative $a 6evie 6P %6005' ,5,. Meredith Schutman B&ntidumping &nd -he "ontinued #umping &nd Subsidy ffset &ct
f 6000= & 3enewed #ebateC 5ardo!o %ournal o) International and 5omparative $a ,, •
%6007' ,08H. -udor 2. 3us B-he Short 4nhappy /ife of the yrd &mendmentC ;2 %ournal o)
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$egislation and 7ubli 7oliy ,0 %6008 O 600P' 76P. Aoungjin )ung Sun 9yeong /ee B-he /egacy of the yrd &mendment "ontroversies=
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3ethinking the (rinciple of $ood 1aith.C %ournal o) World Trade %6005' >7. ' 7,P.
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Ministry of "ommerce and Industry #epartment of "ommerce $overnment of India Anti Dumping
&
Anti-subsidy
measures:
FAQs,
http=JJcommerce.nic.inJtraderemediesJadmeasures5.asp %accessed ctober ,> 60,>'. 50
2aveen $oel B"reative (rotectionism in the 4SC T(e <onomi Times, 2ovember 50 6006 http=JJarticles.economictimes.indiatimes.comJ6006@,,@50JnewsJ6P576H>0,anti@dumping@duty@domestic@industry@ anti@dumping@agreement %accessed ctober > 60,5'.
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<onomi Analysis o) t(e 5ontinued Dumping and 3ubsidy At o) 0///+ "ongressional
•
udget ffice March 6 6007. Qhttp=JJwww.cbo.govR. 4.S.@"hina *conomic and Security 3eview "ommission. 9earing on "hina and the ;-=
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&ssessing and *nforcing "ompliance. 1ebruary 5@7 600> Qhttp=JJwww.uscc.govJhearingsJR. 2aveen $oel B"reative (rotectionism in the 4SC T(e <onomi Times, 2ovember 50 6006
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http=JJarticles.economictimes.indiatimes.comJ6006@,,@50JnewsJ6P576H>0,anti@
dumping@duty@domestic@industry@anti@dumping@agreement %accessed ctober ,> 60,>'. "ommittee on ;ays and Means Subcommittee on -rade 4nited States "ongress Written omments on te(nial orretions to 2+3+ trade las and 4isellaneous Duty 3uspension Bills, 0//., ;ashington #.".= 4nited States of &merica 600> 666.
,>
