13 de Diciembre de 2018
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Colección: Trends for a common future
Autor: Sidney Weintraub
Título: Technical Cooperation Needs for Hemispheric trade Negotiations

7. Subsidies, Antidumping (AD) and Countervailing Duties (CVD)

This negotiating group (NGADCV) must deal with an issue replete with conflict. This is because these measures, particularly AD actions, are increasingly becoming the protective instrument of choice of many nations. Coupled with this, there are no simple solutions to the problem of AD and CVD actions. There may be somewhat more pay dirt in seeking to limit subsidies, but this issue was addressed in constructive fashion in the Uruguay Round. The NGADCV’s work overlaps with that of other negotiating groups, such as market access, investment, agriculture, and competition policy, and coordination among them is necessary, as each group recognizes.

AD and CVD actions, within limits defined in the WTO and in regional free-trade agreements (FTAs), generally permit countries to enact and define their own laws and regulations. There are exceptions to this, for example in the Australia-New Zealand Closer Economic Relations agreement and potentially for AD actions in the Canada-Chile bilateral FTA. Canada, when it negotiated its FTA with the United States, sought to eliminate the use of AD measures by either country. This failed, but Chapter 19 of that agreement (later incorporated in slightly modified form in NAFTA) authorized compulsory arbitration to determine if the country applying compensatory duties followed its own laws and procedures. This has worked reasonably well, but it requires a form of due process and transparency to permit review of exactly how AD actions were taken and this degree of openness may not exist broadly in the laws of other hemispheric countries. Mexico deliberately modified its laws in order to enter into this appeals arrangement.

The NGADCV has requested an updated inventory of AD and CVD measures taken in the hemisphere, as well as a compendium of AD and CVD legislation that exists. This is necessary background that the Tripartite Committee agencies can provide and keep current. The WTO does provide training on its AD and CVD provisions and offers a broad framework to design model legislation. Hemispheric institutions, INTAL for one, provide short training sessions on AD/CVD and trade remedies in general. These are all useful, but by no means adequate.

As one interlocutor put it, most hemispheric countries dread petitions by U.S. companies for AD investigations and protection, but are unsure how to prevent these from happening. The simple answer that they should not dump is unsatisfactory because U.S. procedures defy simple interpretation. The United States may not be unique in this respect. Perhaps the best that can be provided in the way of TC is to make sure that trade officials of other hemispheric countries are familiar with the U.S. law and practices, indeed, of laws and practices of all the countries. Workshops and seminars on these issues abound and many law firms sponsor courses on new legislation in this field. One part of TC should be the establishment of a technique to keep trade officials informed of these meetings and, to the extent possible, to provide financing to participate.

Negotiations in the FTAA may revolve around the application of legal processes for imposing AD/CVD measures to see if there are ways to circumscribe the boundaries. If this is possible, the countries would need information of the boundaries that now exist in the various countries. Law firms advise countries about the use of AD/CVD measures, sometimes in advance but more typically after a case is in play. This is a costly but necessary defense. Policy issues between countries often become intense, as they are now with respect to AD petitions in the United States against steel imported from Brazil, but these often become company-specific disputes rather than matters of high public policy that can be negotiated in a comprehensive way.

AD/CVD legislation is well entrenched in the United States. The use of these measures is becoming more frequent in other countries as well and decades of effort to circumscribe them have had only modest effect. Yet there have been constructive modifications, as in the Canada- U.S. FTA and then in NAFTA. What this implies is that the effort improve AD/CVD practice can have a payoff; and this, in turn, requires that hemispheric countries be well informed about the situation to make the negotiation meaningful.