Disfavored Nations: Anti‐Dumping at the WTO

• Date: 01 February 2013
• Author: James C. Hartigan,Hylke Vandenbussche
• Published date: 01 February 2013
• DOI: http://doi.org/10.1111/rode.12018

Disfavored Nations: Anti-Dumping at the WTO

James C. Hartigan and Hylke Vandenbussche*

Abstract

The proliferation of Anti-Dumping actions may be explained by the Most Favored Nation rule of safe-

guards, the advantages of unilateral retaliatory measures as an alternative to formal dispute resolution,and

the exercising of discipline in a risk-sharing agreement. Use of unilateralism is attractive to developing

members that are constrained by legal capacity.The expression of the Anti-Dumping Agreement appears

to be a hybrid of rules and standards. However, a lack of interpretive guidance from the WTO and the

opportunities for discretion in the implementation of rules render them standards in a shroud of rules.This

is due to the presence of large proxy spaces, or the domestic investigative authority being substantially the

arbiter of satisfaction with the agreement.

1. Introduction

The Anti-Dumping Agreement (ADA) of the World Trade Organization (WTO) con-

tinues the elaboration and clarification of Art.VI of the General Agreement on Tariffs

and Trade (GATT) initiated with the Agreement on Anti-Dumping Practices, com-

monly known as the Anti-Dumping (AD) Code, of 1967. The texts of the 1967 Code,

and its successor AD Code of 1979 governed use of this instrument primarily through

standards, which are inherently subjective. The guidance provided in the ADA is a

hybrid of standards and rules.That is, more objectivity was introduced to the text cov-

ering use of AD measures.We will contend, however, that the implementation of the

ADA remains based primarily upon standards.

Recent studies have disclosed a substantial increase in the number of countries with

AD laws, as well as a proliferation in their use. Vandenbussche and Zanardi (2010)

disclose that in 1980 only 49 countries had an AD law, but that this number doubled

by 2003 with more than 103 countries having such a law.Vandenbussche and Zanardi

(2008) have identified retaliation as an explanation for this phenomenon. As long as a

measure is in conformity with the ADA, it should be regarded as a cooperative action,

albeit a weaker form than adherence to commitments to liberalize trade. Adherence

to the ADA is more cooperative than is undisciplined protectionism. Retaliation can

arise because a member of the WTO believes that another member invokes AD

actions excessively, or does so in non-conformance with the ADA. In such circum-

stances, two alternatives are available. One is to file a complaint under the auspices of

the Dispute Settlement Understanding (DSU) of the WTO. The other is to invoke an

* Hartigan (corresponding author): University of Oklahoma, Norman, Oklahoma, 73019-2103, USA. Tel:

405-325-5501; Fax: 405-325-5842; E-mail: hartigan@ou.edu. Vandenbussche: Université catholique de

Louvain, IRES-CORE, 1348 Louvain-la-Neuve and LICOS-AFI, KULeuven, Belgium. Tel:+32 10 47 41 37;

Fax: 10 47 43 01; E-mail: hylke.vandenbussche@uclouvain.be. The authors appreciate the comments of

Mostafa Beshkar, Rick Bond, Kaz Miyagiwa,an anonymous referee, and participants at the Midwest Inter-

national Economics Meetings. Hartigan thanks LICOS of the Katholic University of Leuven in Belgium,

where this paper was initiated, for its hospitality. He also thanks the National University of Singapore,

where parts were written. Vandenbussche is grateful for financial support from UCLouvain-ARC 09/14-019

and KU Leuven-PF 10/003.

Review of Development Economics, 17(1), 105–116, 2013

DOI:10.1111/rode.12018

© 2013 Blackwell Publishing Ltd