PROTECTIONISM CONTINUES ITS CLIMB:
Spike in `Safeguard` Use is Major Contributor to 12.1% Increase in New Industry Demands for Import Restrictions during Second Quarter of 2009
The Brookings Institution
23 July 2009
Despite the Group of Twenty`s (G-20) commitments to refrain from imposing new protectionist measures in the wake of the global economic crisis, virtually all of them have turned to trade `remedy` policy instruments such as antidumping, safeguards, and countervailing duties (anti-subsidy policies) in response to domestic industry demands for protection from import competition. 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 second quarter 2009. The second quarter 2009 increase is above and beyond the sharp increase that began in 2008 with the global spread of the financial crisis.
to the same time period in 2008, the second quarter of 2009 saw a 12.1%
increase in initiated investigations
in which domestic industries request the imposition of new import
restrictions under trade remedy laws. While
One new and striking feature of the data is that much of the new protectionism taking place in the first half of 2009 is through use of the global `safeguards` policy. While use of the antidumping policy in 2009 has leveled off after the initial escalation associated with the crisis in 2008, safeguards use has spiked only more recently. If continued through the second half of the year, the 2009-to-date pace of new safeguard investigations would make 2009 the second most prolific year since the WTO`s 1995 inception.
Finally, compared to the same time period in 2008, the first half of 2009 also saw a 30.5% increase in the imposition of new import-restricting measures 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. Most striking in the second quarter 2009 data is that China`s exporters were targeted in 100% of the new product-level import-restrictions imposed under other WTO members` trade remedy laws that require the investigating country to name at least one exporting country.
I. NEWLY INITIATED TRADE REMEDY INVESTIGATIONS
In the second quarter (2Q) 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), global safeguards (SG), countervailing duties (CVD), and China-specific safeguards (CSG), an increase of 12.1% compared to the same period in 2008. The new requests for protection throughout the entire first half of 2009 are 18.5% higher than the number of requests taking place in the first half of 2008. As illustrated in Fig. 1, the 2009 increase continues an upward trend; as the 18.5% increase in the first half of 2009 compared to 2008 builds upon a 44% increase in 2008 above the number of new investigations initiated during the same period in 2007.
While the imposition of a preliminary import restrictions occurs typically within a couple of months of the initiation of the investigation, the historical data on the use of these trade policies, and especially in the case of antidumping, indicates that the vast majority of new investigations ultimately result in the imposition of new `definitive` import restrictions, typically with a 12-14 month or so lag. One implication of the 2008-2009 to date 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.
THE SPIKE IN GLOBAL SAFEGUARDS USE
One of the most striking features in the data is that members notified the WTO of 9 newly initiated import-restricting global safeguard investigations in 2Q 2009, raising the total to 15 new global safeguards initiations during the first half of 2009 alone. The 15 new investigations to date in 2009 are already the fourth highest yearly total for any year since 1995, following only 2002 (35 initiations), 2000 (27 initiations), and 2003 (16 initiations), which signals a possible resurgence in the use of the policy. The 15 new initiations in 2009 builds upon the 8 newly initiated safeguard investigations taking place in the second half of 2008 amidst the spread of the financial crisis.
As Fig 2 illustrates, a continuation of the 2009-to-date pace of new safeguard investigations through the second half of the year would make 2009 the second most prolific safeguard-using year since the WTO`s 1995 inception, following only the `steel safeguard year` of 2002. What makes 2009 potentially much different from 2002 stems from the fact that a large share of the 2002 safeguard use was triggered by a single industry event. In fact, the projected use of safeguards in 2009 for non-steel products would be the most ever initiated in one year.
Source: Global Antidumping Database compiled from reports to the WTO Committee on Safeguards.
While antidumping was still the `preferred` trade remedy of choice as 23 of the 35 investigations initiated in 2Q 2009 occurred under a national AD law, an analysis of antidumping suggests its use in 1Q (25 new investigations) and 2Q 2009 was relatively flat when compared with its use throughout 2008, in which WTO members averaged 25 new investigations per quarter.
Thirteen different WTO members initiated at least one new product-level trade remedy investigation in 2Q 2009. As Fig 1. again illustrates, developing countries dominated use by initiating 69% of these new investigations, compared to developed economies which initiated 31% of the new product-level investigations.
50% of the new investigations were undertaken by two countries alone:
The new trade remedy investigations covered a number of different sectors in 2Q 2009. The dominant sectors were iron and steel, with eight total investigations, and plastics and rubber with six total investigations. Other sectors targeted with multiple investigations include chemicals (4), machinery (4), wood (4), other metals (3), textiles (2), and other miscellaneous manufacturers (2).
frequently investigated exporters include
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 2Q 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. 3 indicates, WTO members imposed 18 new product-level definitive import restrictions in 2Q 2009 under national trade remedy laws, an increase of 58.8% compared to the same period in 2008, which was a low point during the WTO era for new impositions. The new measures imposed through the first half of 2009 took place at an annualized rate that is 30.5% higher than the rate at which definitive new measures were imposed in the first half of 2008.
Source: Global Antidumping Database.
Ten different WTO members imposed at least one definitive import-restricting trade remedy in 2Q 2009. As Fig 3. again indicates, developing countries imposed 67% of the definitive new measures, compared to developed economies which imposed 33% of the new barriers.
new product-level import barriers were imposed by
Newly imposed trade remedies covered a number of different sectors in 2Q 2009. The dominant sector was chemicals, with five new barriers. Other sectors targeted with multiple new definitive import restrictions include textiles and apparel (4), machinery (3), other metals (3), and iron and steel (2). Plastics and rubber only faced one newly imposed measure in 2Q 2009.
countries whose exporters faced the imposition of more than one newly imposed
trade remedy in 2Q 2009 include the European Union or its member states (2),
The 21 WTO Members from whom the antidumping data derives are: Argentina, Australia, Brazil, Canada, Chile, 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, for the economies that still control use of their own trade policies in 2009 - i.e., subtracting out newly acceded member states to the EC that used AD prior to their own accession - these 21 Members initiated 92% all antidumping investigations by the WTO membership during 1995-2008. Thus tracking data from these economies serves as a relatively comprehensive sample likely to reflect general trends in the WTO membership.
only two 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
17 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.
Version 5.0 of the publicly available Global Antidumping Database can be found at http://www.brandeis.edu/~cbown/global_ad/ .
Appendix Table 1: Newly Initiated Import-Restricting Trade Remedy Investigations, 2Q 2009
Appendix Table 2: Newly Imposed Import-Restricting Trade Remedies, 2Q 2009
 Chad P.
Bown is an Associate Professor in the Department of Economics and
Correspondence: Chad P. Bown, Department of Economics and International Business School, Brandeis University, Mailstop 021, 415 South Street, Waltham, MA 02454-9110 USA, tel: +1.781.736.4823, fax: +1.781.736.2269, email: email@example.com, web: http://www.brandeis.edu/~cbown/.
 Aksel Erbahar, Laura Gutowski, Ludmila Cieszkowsky Elias, Sharon Kim, and Paul Deng provided outstanding research assistance.
 Earlier studies examining the 1Q 2009 and 2008 data include Chad P. Bown (forthcoming, 2009) `The Global Resort to Antidumping, Safeguards, and other Trade Remedies Amidst the Economic Crisis,` in Simon Evenett and Bernard Hoekman, eds. Trade Implications of Policy Responses to the Crisis. VoxEU.org e-book.; and Chad P. Bown (2009) `Protectionism Is on the Rise: Antidumping Investigations,` chapter 11 in Richard Baldwin and Simon Evenett, eds. The Collapse of Global Trade, Murky Protectionism, and the Crisis: Recommendations for the G20. VoxEU.org e-book, 5 March. The data in this monitoring report extends the analysis of the 2008 and 1Q 2009 trends in antidumping reported at http://www.brandeis.edu/~cbown/global_ad/monitoring/, including Chad P. Bown (2009) `Protectionism Is on the Rise as Antidumping Import Restriction Use up 31% in 2008,` A Monitoring Update to the Global Antidumping Database, 5 March; and Chad P. Bown (2009) `Protectionism Increases and Spreads: Global Use of Trade Remedies Rises by 18.8% in First Quarter 2009,` A Monitoring Update to the Global Antidumping Database, 11 May.
Appendix table 1 lists the 63 different trade remedy investigations during the
2Q 2009 that can be reduced to the 35 (non-redundant) product-level investigations
illustrated in the figure. To make comparable the data on policy use across
different (AD, CVD, SG, CVD) trade remedy laws, AD or CVD investigations
(measures) against multiple exporting countries are treated as one
product-level investigation (measure). For example, Argentina`s two antidumping
investigation of `Iron Pipe Accessories` from
 The year 2007 was the low point in the global use of trade remedies during the period since 1995.
the 35 product-level newly initiated investigations in the 2Q 2009, nine did
not name any exporting countries because they were global safeguards, and
For a discussion and analysis, see Chad P. Bown (forthcoming) `China`s WTO
Entry: Antidumping, Safeguards, and Dispute Settlement,` in Robert Feenstra and
Shang-Jin Wei (eds.) China`s Growing Role
in World Trade.
 Appendix table 2 lists the 29 different trade remedy investigations that resulted in the imposition of definitive new import restrictions during the 2Q 2009 that can be reduced to the 18 (non-redundant) product-level trade barriers illustrated in the figure. Indeed, the low point for newly imposed definitive trade remedies occurred in 2Q 2008 (Fig 3.), i.e., four quarters after the low point for newly initiated trade remedy investigations in 2Q 2007 (Fig 1.).