WTO Anti-Dumping Agreement Reform

The world sees a dramatic increase in antidumping initiation among the WTO members after the establishment of the World Trade Organization. The issue of antidumping being abused by members as an instrument for protectionism has brought attentions from all over the world; meanwhile, the trade policy makers from WTO members express their views on how and to what extend the WTO Antidumping Agreement (ADA) affecting the world open trade policy and domestic antidumping policies, and the relations between antidumping and fair competition, fair trade. As one of the most controversial issue in the WTO Doha Round negotiation, whether the ADA needs reform, and how the reform should be done, become the focus of the academics and policy analysts in the international trade arena.By analyzing the background of the early antidumping legislation, the theories on the rationale or irrational of antidumping measures, and the complicated role playing by the antidumping law in the reality of international trade relations, I discuss the WTO Antidumping Agreement from the perspective of the world trading system, i.e. the legal characteristics of the world trading system and its operational stability and effectiveness. I take the view that the existing ADA, as a policy instrument in both protection's and competition's perspectives, has played a rather vague role in the world trading system. Some members see antidumping measures as a trade protection tool; and others see them as the fair competition policy tool in the process of international trade. These controversial views on the role of ADA in the WTO lead to the inconsistency of the provisions and irrational rules of the ADA, which provides basics of the abuse of antidumping measures. I also conclude that the reform of ADA relies on defining the role played by the ADA in the world trading system. According to my analysis, the WTO system is characterized by consultative agreement in rule making institution, more effective dispute settlement mechanism. Like the GATT, the WTO is a system about administration of market access of its members; it is not about market integration. Base on these characteristics, antidumping measures as protection policy instrument can play a role in controlling the costs caused by the shocks in trade opening process, which makes the operation of the world tradingsystem more stable and more effective.Meanwhile, as an unilateral instrument, antidumping itself can be a source of trade friction, therefore, ADA reform should enhance the transparency of domestic antidumping laws of its members, clarify the provision of the ADA so as to avoid the excessive use of the dispute settlement mechanism, hence reduce the costs of the operation of the ADA.Based on the above said views, I include the following rules as lack of transparency in dumping and injury determination provisions, antidumping investigation procedures, the public interests issue, discrimination in non-market economy rules, and the sunset clause in the ADA reform proposal analysis.Firstly, I discuss the problems of the rules on determination of dumping and injury. The most typical problem of dumping and injury determination is that many of these rules lack of transparency, and the most concerned ones among which are the cost test in the rules of dumping determination and the determining rules on causation between the dumping and injury. I conclude that, by analyzing the rules and the application, the wording of the above said two clauses provide the authorities with the opportunities of applying the rules selectively, hence the too extensive discretion, which lead to the lack of transparency in applying the these rules. To change the situation, policy makers of the WTO members should start from improving the transparency of the rules, i.e. clarify the vague provisions on dumping and injury determination on the one hand, and providing application conditions on the provisions with selective rules so as to avoid the different effects among members when different authorities apply the same clause in the similar situations. Meanwhile, some rules of dumping determination cause the domestic authorities' unreasonable practices that are inconsistency with the ADA's role of cost control in establishing a more effective world trading system. Such practices include "zeroing" and construction of normal value in applying dumping determination rule. Zeroing practice leads to the effect that the authorities create dumping margin from thin air by flatting the price comparison results. As for the provision of normal value construction, applying of this rule could lead to broadening the scope of price discrimination, thus broadening the conditions of antidumping duties as necessary protection measures, which lead to the abuse of antidumping measures. Therefore, I propose that the zeroing practice should be expressly prohibited by the ADA; and theprovision on constructed normal value should be abolished so as to avoid the effect of creating price discrimination.Secondly, I discuss the procedural rules in the ADA. The major problems of the procedural rules in the ADA are concerned with the initiation of antidumping investigation, facts using rules in the clause of evidence of antidumping investigation, and I propose that the ADA reform should provide more accurate provisions on these issues to restrict the abusing of antidumping measures and the authorities' discretion on using the evidence.Thirdly, I discuss the root of non-market economic rules in the ADA. By analyzing Article VI of GATT 1947 and Article 2.7 of the ADA, I conclude that the NME rules adopted by WTO members are inconsistent with the principles of transparency and non-discrimination to the extent that the rules are not reflect the present situation of the world economic development. By analyzing the inconsistency, I propose that ADA reform should provide a guideline for the domestic authorities to determine the market economy.Fourthly, I discuss the issue of public interest test in antidumping investigation. I start from concept of public interest and its relationship with the role of world antidumping system, by analyzing the necessity and practicality of establishing a public interest test rules in the antidumping system, I draw a conclusion that, from the perspective that the ADA provides cost control by reducing the shock to the domestic market thus the economic development as whole and the social welfare caused by the free trade arrangement, the establishment of public interest test in antidumping investigation would be necessary to guarantee the role of the ADA in the world trading system. Especially under the circumstance that EU and Canada, as two of the traditional major antidumping users, both have public interest test provisions in their antidumping law, and have gain some experience on practice, therefore it is both necessary and practicable to adopt the public interest issue as a important topic in ADA reform.Finally, I discuss the sunset clause in the ADA. According to my view in the analysis, the problem with the sunset clause is related with vague role played by the ADA in the world trading system. Some WTO members see the ADA as a measure to protect domestic industries; others see it as a fair trade instrument of balancing the members' domestic competition policy. Due to the vague role of the ADA, the sunsetclause is seen both as protection period and remedy to for the domestic industries to recovery from the unfair trade practice. In this situation, sunset clause adopted by members' antidumping law and practices have many problems, the sunset clause is often used by the protectionist, and becomes a sun-never-set clause. To assure that the sunset clause as, I propose that the sunset clause should be as the temporary protection period according to the ADA's role established by the reform, and by amending the sunset clause, the reform should assure that the sunset clause be seen as a time limitation on specific antidumping measures.Based on the study, I further discuss the implications of the reform to China. By analyzing the economic reform policies, competition policies and related legislative activities and trade policies and antidumping laws, I draw a conclusion that the ADA reform would have profound impacts on promoting China's market economy reform, competition policy and law making and keeping the free trade policy.