Michael Punke and Tim Reif respond to an FT article about the Appellate Body reappointment controversy with a letter to the editor. I want to focus on their last paragraph, which is not about the Appellate Body:
A quick note on the use of trade remedy laws, for which the FT shows obvious disdain. Trade remedy laws — such as rules against dumping and subsidies — are an important part of the rules-based system of international trade. WTO members have agreed on the right to use these remedies as an appropriate response to illegal and unfair trade practices. Without them, support for trade liberalisation would disappear altogether.
Could there be a different view on this? Perhaps it could be argued that trade remedies are actually an impediment to trade liberalization. Let me explain.
Trade remedies have proliferated, and are now used widely by countries around the world, at all development levels. One possible impact of trade remedies on the culture of trade policy is that everybody thinks everybody else is cheating. The constant accusations of "unfair trade" have convinced domestic groups around the world that foreigners are cheating them in one nefarious way or another. That makes it really hard to reach trade liberalizing agreements, because everyone is so suspicious of each other.
Do trade remedies effectively address practices that are actually unfair? As applied in practice, dumping calculations just gather numbers and put them into a statistical program, generating a figure for an amount of dumping and a corresponding tariff. They do not require looking for any actual unfair practice, such as predatory pricing.
Subsidies and other state interventions, by contrast, are a real problem, but CVDs do not necessarily aim at trying to fix those practices. Rather, they just maintain a balance of unfairness. Arguably, a multilateral solution would be more effective at eliminating these practices.
And note that there hasn't been much success with trade liberalization at the WTO level over the past 20 years even with the proliferation of trade remedies. (And while there have been FTAs, much of their focus is on issues other than trade liberalization).
It may be the case that trade remedies help provide support for trade liberalization, although I don't know how you test this empirically. But I just wanted to raise the possibility that they may actually be having the opposite effect.
