I. Case: Antidumping Measures as Protectionism
Dumping is defined as the sale of a product for export at a price that is lower than the price charged by the same firm in its home market or at a price below costs of production. Dumping can happen for a number of reasons. Firstly, it can be maintained as a short-term predatory pricing strategy by exporters designed to put competitors in an export market out of business. Also, it can be the result of market intervention or state subsidy of a company’s production that enables it to artificially lower the cost of export. Predatory pricing is illegal under WTO rules if it harms producers in the export market, and states are entitled to use WTO anti-dumping rules to ensure that predatory pricing does not unfairly harm their domestic producers.
On September 14, 2007, China has asked WTO to settle its dispute with US over Chinese coated paper. China is seeking WTO help following a preliminary decision by the US Department of Commerce to impose duties on coated paper imported from China. The frequent usage of trade protective tools, like anti-dumping and special guarantee measures, has become a source of trade conflicts between China and the US. According to WTO statistics, China is the most targeted country in US anti-dumping investigations. With its huge trade deficit, the US government has to protect its domestic industries from foreign competitors. It is, therefore, natural for US authorities to resort to antidumping measures to protect their domestic industries. Another motive is the strategic interests of the US. It was found that US antidumping cases were often driven by political pressure, national security interests, and historical economic relations. And these considerations are sometimes more important tha ...