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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 A Monitoring Update to the Global Antidumping Database[2] PDF version available here;
Data available here EXECUTIVE
SUMMARY 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.[3] Compared
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.[4] 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.[5] 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.[6]
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. POLICY-IMPOSING COUNTRIES 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. Over
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 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). TARGETED EXPORTERS Other
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.[9]
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. POLICY-IMPOSING COUNTRIES 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. Multiple
new product-level import barriers were imposed by AFFECTED SECTORS 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. TARGETED EXPORTERS Other
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), Sources: 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. With
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 The
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
Endnotes |
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