Commercial Defense Policy: Issues at Stake

Antidumping measures have been likened to the equivalent of a nuclear weapon in the armory of trade policy (Srinivasan, 1999). While globalization eliminates obstacles to trade, the vitality and sophistication of domestic defense policies explain why international trade is often viewed as a guerilla war. The use of antidumping and other commercial defense measures increased throughout the 1990s, hand-in-hand with trade liberalization. Indeed, any analysis of these measures demonstrates that defense measures are a by-product of the dilemma between economic policy prescriptions and political feasibility. The implementation of the Uruguay Round Agreements (URAs) on antidumping (AD), countervailing duties (CVDs) and safeguards sought to reduce discretionary powers and improve transparency in the application of commercial defense measures. Compared to previous General Agreement on Tariffs and Trade (GATT) rules, the URAs achieved an important international codification of principles, standards, definitions and basic procedures in these sensitive matters. Nevertheless, domestic laws and practices have had to fill in the loopholes left, allowing authorities to keep commercial defense alive, as a kind of compensation for the radical reduction of traditional trade barriers. The implementation of domestic laws has revealed the extent to which authorities may still use largely discretionary and minimally transparent policies.