PROTECTIONISM INCREASES AND SPREADS:
GLOBAL USE OF TRADE REMEDIES RISES BY
18.8% IN FIRST QUARTER 2009
The
Brookings Institution
11 May 2009
A Monitoring Update to the Global Antidumping Database[2]
EXECUTIVE
SUMMARY
Much has been made of the Group of Twenty`s (G-20)
commitments to refrain from imposing new protectionist measures in the wake of
the global economic crisis.[3]
Most of the G-20 economies are members of the World Trade Organization (WTO),
and many of them had pre-crisis applied
import tariff rates quite close to
the upward limit on their bound
tariff legal commitments under the WTO. This proximity limits their
policymakers` abilities to respond to domestic protectionist pressure by simply
raising applied import tariffs; as
raising import tariffs above these bound legal commitments would be a flagrant
violation of the rules of the international trading system under the WTO.
Nevertheless, policymakers in these economies do have
the flexibility to funnel domestic industry demands for new import restrictions
into alternative trade remedy policy instruments such as antidumping,
countervailing duties (anti-subsidy policies), and safeguards. This study
examines newly available data that tracks the combined use of these trade
policies and finds a continued increase in protectionist resort to these import
barriers in the first quarter 2009. The first quarter 2009 increase is above
and beyond the sharp increase that began in 2008 with the spread of the global
economic crisis.[4]
Compared to the same time period in 2008, the first
quarter of 2009 saw an 18.8% increase in initiated investigations in which domestic industries request the imposition
of new import restrictions under trade remedy laws. While the list of new
investigations is dominated by
Compared to the same time period in 2008, the first
quarter of 2009 also saw a 15.4% increase in the imposition of new import-restricting tariffs and quotas upon
completion of earlier investigations initiated under these trade remedy laws, a
trend that will almost certainly continue to increase throughout the remainder
of 2009 and into 2010. While India imposed the most new import barriers under
these laws during this time period, other G-20 members that did so include
Argentina, Australia, Brazil, Canada, the EU and its member states, South
Korea, Turkey and the United States. China`s exporters are the dominant target
for these newly imposed import restrictions facing new barriers in over 70% of
the cases.
I. NEWLY INITIATED TRADE REMEDY INVESTIGATIONS
In the first quarter (1Q) of 2009, domestic industries
in WTO members initiated 35 product-level
investigations requesting imposition of new import restrictions under
national trade remedy laws such as antidumping (AD), countervailing duties
(CVD), global safeguards (SG), and China-specific safeguards (CSG), an increase
of 18.8% compared to the same period in 2008.[6] As
illustrated in Fig. 1, the 1Q 2009 increase continues an upward trend; the
total number of new import-restricting trade remedy investigations launched in
2008 was itself 29.1% higher than the number of new investigations initiated
during 2007.[7]
In the historical data on the use of these trade
policies and especially in the case of antidumping, the vast majority of new
investigations and requests for import protection do ultimately result in the
imposition of new definitive import restrictions, typically with a 12 month or
so lag. One implication of the 2008-2009 surge in new investigations is the
high likelihood that they will result in a 2009-2010 surge in newly imposed
definitive import restricting measures.
Source:
Global Antidumping Database.
POLICY-IMPOSING
COUNTRIES
Sixteen different WTO members initiated at least one
new product-level trade remedy investigation in 1Q 2009. Developing countries
dominated use by initiating 77% of these new investigations, compared to
developed economies which initiated 23% of the investigations.
Nearly 50% of the new investigations were undertaken
by two countries alone:
AFFECTED
SECTORS
The new trade remedy investigations covered a number
of different sectors in 1Q 2009. The dominant sector was chemicals, with seven
total investigations, five of which were initiated by
SPREAD OF
TRADE REMEDY USE BEYOND ANTIDUMPING
While antidumping was still the preferred trade remedy
of choice as 24 of the 35 investigations initiated in 1Q 2009 occurred under a
national AD law, WTO members also initiated import-restricting investigations
under their national provisions relating to global safeguards (6),
China-specific safeguards (3) and countervailing duties (2 unique cases).[8]
Indeed, an analysis of antidumping alone suggests its use in 1Q 2009 (24 new
product-level investigations) was relatively flat when compared with its use
throughout 2008, in which WTO members averaged 25 new investigations per
quarter.
The 1Q 2009 increase in trade remedy protectionism
above its 2008 levels is therefore largely due to the increase in the use of
these other import-restricting
policies (CVD, SG, CSG). Consider India`s activity in the 1Q 2009: it initiated
3 antidumping investigations, 3 China-specific safeguard investigations, 2
global safeguard investigations, and its first ever countervailing duty investigation. [9]
Thus not only is protectionism on the rise, but the trade remedy policy instruments through which WTO members
are implementing the new import-restricting barriers are expanding beyond
traditional antidumping use as well.
TARGETED
EXPORTERS
Other frequently investigated exporters include the
European Union or its member states (5) and
II. NEWLY
IMPOSED IMPORT-RESTRICTING TRADE REMEDIES
In addition to the newly initiated investigations, WTO
members also imposed a number of new definitive import-restricting trade
remedies in 1Q 2009. Most of these new import restrictions were imposed after
months of consideration for investigations initiated only in late 2007 or early
2008.
As Fig. 2 indicates, WTO members imposed 21 new product-level definitive import
restrictions in 1Q 2009 under national trade remedy laws, an increase of 10.0%
compared to the same period in 2008.[12]
The new measures imposed in 1Q 2009 took place at an annualized rate that is
15.4% higher than the rate at which definitive new measures were imposed in
2008.
However, the actual
increase in imposed measures in 2Q through 4Q of 2009 is expected to be much larger than 15.4% higher than the number
imposed in 2008, given the sharp increase in newly initiated investigations in
2Q through 4Q of 2008 (see again Fig. 1). [13]
Source:
Global Antidumping Database.
POLICY-IMPOSING
COUNTRIES
Ten different WTO members imposed at least one
definitive import-restricting trade remedy in 1Q 2009. Developing countries
imposed 48% of the definitive new measures, compared to developed economies
which imposed 52% of the new barriers.
Multiple new product-level import barriers were
imposed by
AFFECTED
SECTORS
Newly imposed trade remedies covered a number of
different sectors in 1Q 2009. The dominant sector was iron and steel, with six
new barriers, three of which were imposed by the
SPREAD OF
TRADE REMEDY USE BEYOND ANTIDUMPING
Most of the investigations from which new definitive
import-restricting measures imposed in 1Q 2009 took place under national
antidumping laws, though a handful of investigations took place under either
national countervailing duty laws or both. Of the 21 newly imposed
product-level import restrictions, 16 resulted from antidumping investigations
alone, two resulted from countervailing duty investigations alone, and three
resulted from simultaneous antidumping and countervailing duty investigations.
There were no ongoing global safeguard (SG) or China-specific safeguard (CSG)
investigations begun in 2007-2008 that resulted in the imposition of definitive
new import barriers during 1Q 2009.
TARGETED
EXPORTERS
Other countries whose exporters faced the imposition of
more than one newly imposed trade remedy in 1Q 2009 include
Sources:
The 20 WTO Members from whom the antidumping data
derives are: Argentina, Australia, Brazil, Canada, China, Colombia, EU, India,
Israel, Mexico, New Zealand, Pakistan, Peru, South Africa, South Korea, Taiwan,
Turkey, Ukraine, USA, and Venezuela. According to data from the WTO, these 20
Members initiated 90% (89%) of all antidumping investigations (new measures
imposed) by the WTO membership during 1995-2007. Thus tracking data from these
economies serves as a relatively comprehensive sample likely to reflect general
trends in the WTO membership.
With only four exceptions, the antidumping data
provided above are collected from each country`s national government
publications and made publicly available on their websites, as detailed in the
appendix. Thus the statistics are reliable to the extent that these countries
publish their new anti-dumping initiations and applied measures on their
websites. Data for
The 18 WTO Members from whom the countervailing duty
data derives are:
Data from WTO Members` use of global safeguards and China-specific
safeguards is taken from the WTO and national government publications.
The Global Antidumping Database can be found at http://www.brandeis.edu/~cbown/global_ad/
. The complete and detailed data on antidumping investigations will be made
available in early summer 2009 as version 5.0 of the Global Antidumping
Database.
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Appendix
Table 1: Newly
Initiated Import-Restricting Trade Remedy Investigations, 1Q 2009
Sources: Global Antidumping Database.
Derived from sources described in Appendix Table 3. AD = antidumping; CVD =
countervailing duty; SG = global safeguard; CSG = China-specific safeguard.
NA indicates not applicable since global safeguards (SG) are intended to be
applied on an MFN basis to imports from all export sources. Appendix
Table 2: Newly
Imposed Import-Restricting Trade Remedies, 1Q 2009
Sources: Global Antidumping Database.
Derived from sources described in Appendix Table 3. AD = antidumping; CVD =
countervailing duty; SG = global safeguard; CSG = China-specific safeguard.
NA indicates not applicable since global safeguards (SG) are intended to be
applied on an MFN basis to imports from all export sources. Appendix
Table 3: Sources of
Data: User Countries` Government Agencies or Publications that provided the
antidumping and countervailing duty data and their Websites
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Endnotes