Antidumping Measures and Global Supply Chains
Recently, domestic solar cell (module) producers in both sides of the Atlantic have redoubled their efforts to stop the influx of cheaper rival products from China. Predictably, they rely heavily on trade remedies such as antidumping measures. Of course, protectionism of this sort, in particular amid the recession, is hardly news. However, what IS really interesting is that the current solar cell saga highlights the nonsensical nature of antidumping measures in the new trade reality characterized by global supply chains. There is an inherent anachronism at the heart (structure) of antidumping remedies. They are premised on a hidden assumption that an importing country (that can impose trade remedies on imported goods to protect their domestic producers) can “identify” where those imports originated (“mono-location production”). However, most of manufactured products these days, not only T-shirts but also cars, airplanes, iPod, etc., are sourced globally (“multi-location production”). Perhaps, more importantly, in this global supply chain phenomenon the traditional divide between trade in GOODS and SERVICES becomes blurred. As seen in the solar cell saga, the final destination of the global supply chain ends in the domestic construction sectors that badly need affordable components such as solar cells to cut the cost. This is why not all European industries rally behind the recent antidumping investigation by the Commission against Chinese imports. Read this.