labor and capital have decreased. Graph 8 gives a more general picture. In this
specific factor’s graph, capital is the mobile factor between industrialized
nations and third world countries. As the third world countries relative prices
decreases, there value of marginal product decreases (or is not as high as it
would have been) as shown by a shift to the left to the dotted line. This
movement shows that the developing countries are (relatively) losing capital to
the industrialized nations. This leads right into graph 9. If the industrialized
nations capital to labor ratio is at k** as it would be in this possible case
and the developing nations capital to labor ratio is a k, there can be no
overlap in factor prices. This would mean that wages and rents in the developing
nations could never be the same as in the industrialized world. All these graphs
show that there is real concern for third world nations if there is persistent
antidumping measures taken against them by industrialized nations. The WTO has
stated that in cases involving developing countries special attention should be
paid to their economic situations when countries consider imposing antidumping
provisions: "[ The WTO's agreement]also calls for ‘constructive remedies’
to be explored."(Raghavan) However, it is hard to say if this has ever been
carried out. India feels that more specific rules should be made for developing
nations: "Article 5.8 of the [WTO] AD agreement provides that the volume of
"dumped" imports shall be normally regarded as negligible if the
dumped imports from a country are less than 3%, unless countries individually
accounting for less than 3% collectively account for more than 7%. In view of
the liberalization of global trade, and of more and more developing countries
entering untapped markets for them, these percentages should be increased to 7%
and 15% respectively."( Raghavan). For third world exporters, they have
many handicaps when it comes to fighting anti-dumping cases. One, there is utter
paucity of exact information on anti-dumping laws, procedures as per WTO and as
practiced by various countries. Two, there are very few legal experts and
advisors in this field who have mastered not only the most complicated laws but
even the procedures, and also have understood the various complicated technical
aspects of WTO and the anti-dumping laws, international trade. Antidumping
measures hit small and medium size firms very hard, because they often don’t
have the resources to defend themselves. It is also too expense for firms to pay
the astronomical sum of money needed to defend one’s company in the complicated
antidumping investigations.-estimated by the Indians to be around 100,000
dollars per investigation. One US legal form was 400 pages long. (Sule). The
recent trade round in Seattle has done little to change any antidumping laws. No
amount of arm-twisting could get the US to agree to negotiate the WTO’s
antidumping laws. With the substantial political pressure from those in the
steel industry and other labor unions, 228 U.S. members of the House and Senate
have signed a document insisting that Clinton and U.S. Trade Representative
Charlene Barshefsky defend existing anti-dumping laws at the WTO meeting in
Seattle. The legislation has enough support to pass in the U.S. House of
Representatives. Thus, US negotiators flat out refused to discuss any changes to
the WTO current laws on antidumping. However, many countries such as Japan and
some developing nations tried to tie any discussions of trade involving the
Internet, a very important topic for the US, to discussions involving the
antidumping laws. The US still refused. The language from some in the Us
government was very strong regarding the demands for talks about the antidumping
laws, especially with regards to Japan . U.S. Under Secretary of Commerce for
International Trade David Aaron told the WTO " If [Japanese and others]
don’t back down, then they’ll? sabotage the Seattle round? We’re just not
going to do [negotiate on antidumping]. We can’t do it. We won’t do
it"(Reuters). Chile, representing a small developing country, issued their
statement about the problem with antidumping laws, a view similar to that of
Japan’s: "The aim is to remedy a situation in which anti-dumping measures
have in most cases become a projectionist instrument that has nothing to do with
anti-competitive behavior"( Schwartz). Among other issues the antidumping
controversy may have helped in the futility of the conference and Seattle.
Although it was reported that some nations had put antidumping on the
preliminary agenda for the next round of trade talks, of course, no finalized
agenda was ever approved. So, to date nothing has been done to change or clarify
the WTO’s antidumping laws. Moreover there have been few cases on antidumping
that the WTO has ruled upon. Japan has filed complaints about antidumping
measures placed on its cameras and supercomputers, but the WTO has yet to settle
the disputes. Also, South Korea recently filed a complaint with the WTO about Us
antidumping tariffs against its flat computer screens, invoking the sunset rule
that more than five years had elapsed since the US put on the restrictions. The
WTO has yet to rule in that case either. Overall, it seems as if the WTO
antidumping agreements need some refinement. There is still much confusion as to
whether countries are actually using its standards or not in their dumping
investigations. There are many theoretical problems with some antidumping
procedures. Allegations of unfair investigations abound. The WTO’s Antidumping
Agreement was made to be very complex to help to deal with these problems, it
may be too opaque to be able to determine the validity of some antidumping
measures. As the main part of this paper explores, the consequences of
unnecessary or mistaken antidumping measures can be grave for both the exporting
and importing countries. Tariffs and countervailing duties can hurt the domestic
countries consumers and can have large negative effects on the small trading
partners. This is especially problematic for developing countries that need
access to industrialized markets to ensure they can obtain a basis for long-term
economic stability and growth and clime out of poverty. The industrialized
nations should want this to occur so they don’t have to perpetually give
handouts to these developing nations. Of course, in order give a lengthy
description of one aspect that is not necessarily popular in the United States
of antidumping , this paper restricted its examination to only half of the
antidumping story; there are many arguments for the antidumping laws that are
currently on the books. No one is suggesting that the US or any other
industrialized nation let its industries be unfairly put out of business, if
that is truly the case at hand. Still, as the Seattle Round demonstrates, the
WTO’s antidumping laws seem to have satisfied to few countries. Given the spirit
of its trade barrier reduction goals, the WTO should make sure it gets its
antidumping rules right.
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