Figure 1 illustrates the United States’ use of [trade remedies] over the NAFTA period of 1994–2016, as well as a projection for potential use in 2017 (more on this below). Each line represents the share of US imports from a different foreign source that are covered by US trade restrictions under these laws.
Figure 1 Share of US imports covered by barriers imposed under trade laws, including projection for Trump’s 2017 policies
Source: Author’s construction, building from Chad P. Bown, Steel, Aluminum, Lumber, Solar: Trump's Stealth Trade Protection, PIIE Policy Brief 17-21, June 2017.
Three results stand out: First, since China’s 2001 accession to the World Trade Organization (WTO), the United States has increasingly used these policies to target imports from China. In 2000, 1.4 percent of US imports from China were covered by US AD/CVDs; this share had increased to 9.2 percent by 2016. Some of this use is related to China’s treatment as a nonmarket economy in AD investigations.
Second, US coverage of imports from the rest of the world (ROW, non-NAFTA) has been declining over time. In 2016, only 2.7 percent of US imports from ROW were covered by these policies, down from 6.5 percent in 2000.
Third, these US barriers covered even fewer US imports from Canada and Mexico. By 2016, US AD/CVDs covered only 1.3 percent of US imports from NAFTA partners. There was a slight uptick during 2001–06 when the United States imposed trade restrictions on imports of Canadian softwood lumber.
Many factors contribute to the fact that the United States applied antidumping, countervailing duties, and safeguards against relatively few imports from Canada and Mexico over 1994–2016. First, there was a general decline in US AD/CVD use against imports from all (non-Chinese) foreign sources. A second factor is the deepening economic integration in North America under NAFTA. The groups that typically request that the US government impose new trade barriers under these laws have increasingly cross-border common firm ownership (including in steel) and common labor union representation of workers; this especially discourages US use against imports from Canada.
Nevertheless, the legal disincentives provided by NAFTA Chapter 19 and Article 802 likely contributed to the relatively low levels of US use of such laws against imports from Canada and Mexico.
A key point here is that Canada and Mexico have fewer U.S. imports subject to AD/CVDs than other countries do, which leads Chad to conclude that the "legal disincentives provided by NAFTA Chapter 19 and Article 802 likely contributed to the relatively low levels of US use of such laws against imports from Canada and Mexico."
As a counter to Chad's argument here, I'm going to cite to another piece by Chad, which has this table in it:
If I'm reading this correctly, this table breaks down the "rest of the world" calculations from his other piece a bit, giving us individual countries to look at. What I see here is that imports from Germany and the UK are less likely to be subject to AD/CVDs than imports from Canada and Mexico, even though there is no NAFTA Chapter 19 procedure in place for Germany and the UK (they can only go to U.S. courts or the WTO, like everyone else).
I have lots of question about NAFTA Chapter 19. Here are a few of them:
-- Canada says keeping Chapter 19 is a "red line," but do they mean that, or is it just a negotiating tactic to get something in exchange?
-- Is NAFTA Chapter 19 constitutional? And what are the chances there will be a constitutional challenge that gets all the way to a ruling on this issue?
-- How different are NAFTA Chapter 19 and U.S. appeals court results today? Someone should update this older data.
-- How do agency responses differ as between NAFTA Chapter 19 decisions and U.S. court rulings? Are agencies more likely to comply with one or the other?
-- Does the existence of NAFTA Chapter 19 have an impact on the decision to file AD/CVD petitions?
-- On the last three questions, what are the answers in relation to Canadian and Mexican proceedings?
