Governing from Geneva? Exploring the Impact of WTO Rulings on EU Antidumping Regulation and Trade Strategy.

This paper examines how the World Trade Organization (WTO) affects the trade policies of signatories. The paper concentrates on one of the ‘Big Four’ members of the WTO ? the European Union (EU). Specifically, we examine the impact of WTO regulations on EU antidumping (AD) regulation and consequently, on the choices and actions of EU trade policy makers and on the strategies of firms engaged in AD actions. As the dramatic anti-globalization riots in Seattle, Gothenburg, Genoa and Washington show, the WTO has become a focus for protests about the nature of ‘governance’ in the international economy. There is concern about the degree to which WTO agreements impinge on national sovereignty by proscribing certain types of government regulation. Recognition of this risk can be found in the truncated nature of most-favoured-nation (MFN) treatment under the General Agreement on Trade in Services (GATS). MFN is a cornerstone of the multilateral system: in its original GATT formulation, it proscribes discrimination among trading partners. However, the GATS MFN clause is much more conditional: states offer schedules of their liberalising measures and the degree of MFN treatment they are prepared to offer. ‘Governments wanted the option of adopting a more gradual and conditioned approach to opening up their markets, by making national treatment something to be granted, denied or qualified, depending on the sector and signatory concerned’ (Low and Mattoo, 1998, p. 4). Relatively little work has been done on whether goods trade regulation under GATT constrains states in similar ways, though some states, such as Canada, have suggested that GATT rules can influence national trade policymaking (DFAIT, 2002). Some current international business and international political economy literature expresses reservations about the WTO as a supranational organization (Rugman and Verbeke 1998; Rugman 2000), but we currently face a dearth of empirical work to assess the precise reach of WTO regulation. Moreover, to the extent that this question is addressed, the literature looks at the developing states and frames the issue as one of cost, rather than policymaking constraints (Hoekman, 2002). One way to assess the real impact of the WTO is to look at its influence on a powerful member of the international trading system ? and to look at that impact in goods trade. This would provide the stiffest test for those seeking to demonstrate the impact of the WTO. That is the purpose of this paper. We aim to interrogate the WTO and European Commission Trade Directorate data sets on AD negotiations (annual reports are produced by both organisations) with the aim of obtaining first, an absolute number of AD investigations; second, a breakdown by industrial sector; and third, evidence of the change over time in the number and target of AD action. In addition, we will undertake a set of interviews with key EU and WTO officials to substantiate and further develop our initial findings. In pursuing this methodology we are looking for the following: first, changes in industry profile for AD action; and second, a European Commission change of approach in the selection of trade instruments. On the first point, we are interested in assessing the changing industry profile of AD action to see if it is associated with changing EU trade strategy and to assess the implications for the competitive environment and industry dynamics. On the second point, a firm or industry association petitions the EU for action in response to perceived predatory or anticompetitive behaviour by competitors. The EU first takes the decision whether to act or not. If action is chosen, the Commission then selects the policy instrument or method for action. Our question is: ‘in recent years, have these options been constrained in any way by WTO regulation?’ Put another way, do we notice any change, pre and post-WTO, in the way in which the EU AD regime operates? [ABSTRACT FROM AUTHOR]