Take or Leave Anti-Dumping; How About Anti-WTO?

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Certain segments of the American population tend to hold negative feelings for international institutions such as the United Nations (UN), the International Monetary Fund (IMF), or the World Trade Organization (WTO) and some go even further by publishing scathing remarks (the ubiquitous billboards in the more conservatively inclined parts of the country) or full-fledged op-eds in the media.

Phyllis Schlafly, a figure known for her often uncompromising viewpoints, recently did just that, excoriating the WTO in the virtual pages of The Eagle Forum.

“It’s time for the United States to wave goodbye to this impertinent new-world-order bunch of bureaucrats in Geneva (a sort of Economic United Nations) who think they can dictate our trade policies, Schlafly writes. “It’s time to pull out of the World Trade Outrage, she concludes.

While the majority of Schlafly’s article focuses on the quality of imported foods (which many of us, including me, find extremely important), her alarmist approach can stand to be toned down a lot. According to the article, the WTO ruled against the US in a dispute over Country of Origin Labeling of imported foods. She also cited the ruling against Internet gambling.

Spewing vitriol directly at an organization such as the WTO seems to be misdirected; we should focus our constructive outrage at countries trying to take advantage of the free trade system that we’ve established over the past several decades.

For example, one might take exception to this excerpt: “Anybody who says the WTO means Ëœfree trade’ insults the common sense of Americans.

Has anyone alleged that the WTO “means free trade, or stands in for what is supposed to pass for free trade? Of course, the WTO is imperfect like many other organizations that strive to mediate/police the entire globe, and its ability to enforce rules has looked systematically weak; but can the US take on the resources necessary to resolve its own disputes full-time (or would it even want to)? Does it serve people in the media to order the abolishment of a body every time it rules against us? No.

Does She Have Any Valid Points?

Given WTO activity in the metals sphere between US, the EU and China, however, it may be hard for certain disenfranchised countries on the wrong sides of rulings to hold some of those feelings.

The US got docked back in March of this year, when its dispute over Chinese imports of circular welded carbon quality steel pipe (“CWP) and light-walled rectangular pipe and tube (“LWR) went in favor of China. The WTO alleged the US had unlawfully imposed anti-dumping and countervailing duties on the Chinese steel in 2007 — the tariffs ranged up to 20 percent on these items.

In the case of Chinese steel fasteners imported by the EU, the WTO recently ruled in favor of China again, essentially citing the incorrect calculation of duties based on China as a “single exporter and not individual producers. In the case, distilled effectively by a BusinessWeek article, the WTO ruled that Chinese imports only affected 27 percent of EU fastener production, not constituting a “major proportion. (Unlike the 20-percent US tariff, the EU was charging duties of up to 85 percent through 2014.)

Both cases center on the problem of China operating what’s defined as a “non-market economy, which is afforded different enforcement of rules than market economies. This ended up biting the US in its anti-dumping dispute with the Chinese, and they’ll have to wait until at least 2016 for the WTO to classify China differently.

Perhaps that’s the largest problem with the WTO, as Schlafly certainly alludes to in her piece: the bureaucratic machine takes so long to produce anything enforceable, or even meaningful. The long amount of time it takes the WTO to mediate harms the ever-quickening pace of trade in today’s world. Changing that should be a primary goal. But in no way does that mean, “Let’s get rid of it!”

The world especially emerged economies like the US’ and EU’s, which are battling the upstarts — can stand to use a trade mediator (otherwise we may be prone to actual wars being fought); but we must fix the broken system by defining trade partners on a level playing field.

What do you think? Post a comment!

–Taras Berezowsky

Comments (6)

  1. MDC says:

    The Schlafly article is bizarre. The WTO origin labelling ruling did not prevent the US from origin designation — we’ve had that for years. It simply found that it was discriminatory to require a listing of each country in which the cow was born, raised and slaughtered. Ground beef is labelled as US domestic law requires — a mix from specified countries. Concerning antidumping policy, the WTO’s finding was simply intuitive. If non market economy antidumping rules theoretically offset subsidized Chinese costs by using surrogate country costs, then imposing anti-subsidy duties on the same merchandise is redundant. Any US metals producer who thinks the offsetting duties against China will be higher when the non-market economy rules expire and they can double up on AD and CVD, is in for a shock. On this issue, believe me, you don’t want a “level playing field”.

  2. SC says:

    @ MDC- Agreed re Schlafly. Bizarre. It’s like she took each feature of the WTO, and then described it as the opposite. “One country one vote”-> the WTO makes most decisions by consensus. “The WTO violates Congress’ rights”-> the same Congress that ratified GATT/WTO. “The WTO enforces its decisions”-> Say what now?

    Re NME status: Why do you say that duties won’t increase after NME rules expire? How will the calculations change?

  3. anonymous says:

    Phyllis Schlafly…on metalminer? Really? She should stick to commenting on cultural issues, not trade policy which her article clearly evidences she knows very little about. The WTO is not perfect, it is like all massive institutions (including private ones) in that it can be inefficient and cumbersome and occasionally outright wrong, but withdrawing from it would be an international disaster for the US. Her article pays no heed to the fact that the most common cause of actual armed conflict before the WTO was trade disputes. “When goods dont cross borders, soldiers do” and the WTO offers a peaceful albeit imperfect place to settle these disputes in a civilized fashion. Withdraw from it and the world would be far worse off and US trade credibility would be non-existent. The issue of China’s status in the WTO is an entirely different issue- it has nothing to do with the WTO as a legitimate system, if anything it proves reforming things within the framework of the WTO makes sense- withdrawing from it as Schlafly recommends we do would be insane.

  4. tberezowsky says:

    Exactly the points I tried to make, Mr. “Anonymous.” 😉 Well done, thanks for re-framing them. To read things like Schlafly’s floating around on the web, it’s easy to see how misinformation translates into ‘alarmism’ very quickly.

    @MDC any thoughts on SC’s question? We’ll try to dig into it, but any additional thoughts are helpful.

  5. anonymous says:

    Fair enough tb, I was concerned you did not make the point that her endgame position was crazy emphatically enough!

  6. tberezowsky says:

    said with the utmost professionalism and respect at heart, she is definitely a dingbat.

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