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Waste II

Drawing the line between anti-dumping a regulatory protectionism in Asia-Africa trade relation

by Ogechukwu Ojimaduekwu Ajoku

1.0. Introduction:

This paper intends to draw a distinction between anti-dumping, countervailing, safeguards and regulatory protectionism measures employed as trade policy instruments for the mitigation of the negative effects of globalisation and international trade liberalisation, seeking to enhance industrial development of the perpetrating country. African countries are ill-equipped to act cautiously in this regard. In other words most Africa nations are unable to make a distinction between trade remedy measures and anti-dumping policies in their relations with advance countries of Asia and Europe. They seek not to inhibit their trade relations with these advanced economies.

Suffice it to state that trade remedies are important and needed both from development economics perspectives and also for transparency and good governance in the area of foreign trade policy and trade relations with the advanced continents of Asia and Europe. This paper shall discuss anti-dumping measures as protectionist barrier to trade in domestic markets. It shall examine how local practise are reflecting the worldwide tendency towards protectionism. It shall seek to understand the unfortunate dilemma of opening the economy to free trade when there are local development strategies at the domestic level that do not necessarily correlate to the free trade logic. This manifests the clash between disciplines which should be aligned by their nature, but are differentiated by their regime, such as evident in trade remedies and competition1. This paper shall also examine the live debate over the inherent problem of competition conflicting with trade remedies, and more specifically with anti-dumping measures around the worlds, particularly as it affects Asia-Africa-Trade relations.

This paper is divided into five sections. Section one introduces the paper by briefly highlighting the dilemma of promoting international trade and industrial development governance. Section two takes an over view of the trade remedies undertaken, its challenges and prospects. Section three shall try to draw a distinction between trade remedies and regulatory protectionism. Section four shall dwell on Africans responses and contribution to resolving the dilemma particularly with its relations with Asian countries such as china, India, South Korea and Malaysia. Section five shall be the conclusion seeking to draw the line between regulatory protectionism and anti-dumping measures with regard to industrial development policy of the continent.

 

2.0. Concepts and Overview of Trade Remedies

2.1. Understanding Trade Remedies

Trade remedies connote trade-related defence measures embarked by national government to defend local producers against the negative impact of foreign trade and globalisation. There are three major elements of trade remedies as follows: anti-dumping, countervailing and safeguard measures. It is pertinent to discuss all three in this paper due to the fact that they intertwine.

Anti-dumping measures are basically tariffs that accompany ordinary customs duties that are imposed to upset certain unfair pricing practices by foreign companies that are inimical to domestic producers of like or directly competitive production2. On the other hand, countervailing measures are tariffs accompanying customs duties levied in order to overcome unfair advantages gained by foreign producers through way of subsidies by their governments that again cause or threaten to cause injury to domestic competing industry3. Finally, safeguard measures are temporarily trade restriction, typical tariffs or quotas, which are imposed as a response to overwhelming import surges, as usually a result of trade liberalisation that cause serious injury to competing domestic producers4.

Suffice it to note that the advanced economics are the main clients of trade remedies. They are the major operators of trade remedy measure. In the recent years, however, there is an increasing presence of the developing countries in trade remedies used to the extent that today developing countries represent collectively more than 60% of global trade remedy actions5. On the other hand, developing countries are also becoming principal targets of trade remedy measures by both developed and developing countries6.

Although developing countries are now using trade remedies to a much greater extent, African countries are yet to play significant role in this area. Only four countries- Egypt, Morocco, South Africa, and Tunisia- have functional trade remedy mechanisms on the continent7. They have variously employed such measures to defend their domestic producers. Thus, trade remedies are very vital for poor countries like Africa. It is unfortunate that African countries do not feature prominently in world organisation (WTO) activities. The survival of local industries depend on measures geared towards industrial development and remedial undertaking by governments to cushion the impact of dismantling trade barriers as being championed by WTO. This suggested dismantling of trade barriers by use of lowered tariffs exposes African countries, and other poor countries to over-dumping of substandard products from Asia and Europe where these advanced countries enjoy subsidies from their home government. There is therefore an urgent need to seek strategies to defend local manufactures and promote industrial growth8. The WTO is the police of international trade as a multilateral institution subscribed by both developing and developed economics. It is pertinent to note that even before the creation of the WTO, the need for a global mediator was envisaged as a necessary relief in order to implement international trade in fair conditions, or at least to contain in a moderate manner the overwhelming protectionism of major players in the global trade arena9. In the United States, for instance, anti-dumping was applied in an unreasonable manner by imposing minimum revenue for exporters and punishing exporters who sold at lower prices abroad10. This ultimately significantly raised consumer costs11. The WTO has therefore become the multilateral institution with authority to become the multilateral institution with authority to reduce in a significant manner the intervention of the US government in the international markets. From the foregoing, anti-dumping could be understood as a kind of specific reciprocity on the market for market access rights and as an exception to most-favoured-nation (MFN) rule. It can also be understood to be an off-shoot of a bilateral recognition of trade conditions with the WTO arrangements in cases where the balance of trade has been disturbed12. This system is a bit flawed in the sense that not in all cases this unilateral restoration of trade balance is possible. The scenarios where this can be evaded by the protectionist countries are several but the most salient is the case in which cross subsides are of internal prices artificially raised so as to protect a certain industry13.

 

2.2. Overview of trade remedies

The success and survival of domestic industries under the pressure from foreign competition and unfair trade practice has hither to been one of the greatest concerns of governments of Africa, Asia and Europe regarding their trade relations. Trade remedies suggest a strategy devised by most countries to deal with trade-related problems. The trade remedies often employed are anti-dumping and countervailing measures.

 

2.2.1. Anti-dumping measures:

The menace of dumping is widely acknowledged by both developing and developed countries, in international trade. However, special legislations dealing with it is causing ripples in the global trade polity. This has been a measure that has been in operation since the turn of the twentieth century. It is imperative to note that the first anti-dumping law was enacted in 1904 by Canada amidst concerns that US steel makers were unfairly aggressive and were dumping rails into the Canadian market to the effect that this was harming Canadian steel industry14. On the African continent, South Africa is the first country to enact anti-dumping law15.

Anti-dumping is an internationally accepted policy contained in the agreements sequel to the establishment of WTO. It was influenced by the multifarious national legislations in a bid to harmonise and create a globally accepted trade policy. It is pertinent to note that dumping is not banned in itself within the WTO framework. Members are under no obligation to prevent their firms from engaging in dumping. According to article VI of GATT 1994, a product is considered dumped if its export price is lower than its normal value. It can also not be regarded as dumping if export price is less than the comparable price for a like product when sold at home for domestic consumption in the normal course of trade16. The above cited anti-dumping agreement further view dumping where it causes material injury to an established industry, or materially undermines the establishment of a domestic industry17. The remedy for dumping entirely rests with the importing country. The importing country has to initiate a formal investigation before deciding to apply anti-dumping measures. Anti-dumping measures are now in prevalent use as a foremost trade remedy. This is a concern that should be deeply looked into in Africa- Asia trade relations. There should be a balance between foreign investment and foreign trade. This is what both national governments should seriously deliberate on their trade related negotiations. According to 2011 WTO records, from 1995 to June 2011, some 3922 trade remedies have been embarked by WTO members, of which more than 2500 were anti-dumping measures. This is very critical to Africa –Asia trade relations.

 

2.2.2. Countervailing measures

This is also known as anti-subsidy war. The first anti-subsidy law in modern history dates to the US Tariff Act of 1897. This was followed by the US Tariff Act of 1930 that added bite to the earlier law. It authorises the department of the treasury to impose additional duties to mitigate any “bounty or grant” bestowed on imported merchandise18. Subsidies are widely viewed as a measure that distorts international trade. This therefore necessitates the use of countervailing measures to address any resulting “unfair advantage from subsidy policy of national governments. For instance, if China subsidises its exports to Nigeria causing producers in Nigeria to be disadvantaged, Nigerian government can respond to cushion the negative impact to the subsidy on local industries. On the other hand, if an Asian country subsidises its domestic production, thereby undermining exports of an African country, the only action the African country can make is to respond with retaliatory subsidy, or lodge a complaint of nullification or impairment of trade concessions through the WTO dispute settlement channels, if it is a member of WTO. In this regard, countries react to subsidies by a retaliatory subsidy or lodge a complaint before the WTO.

The international rules governing countervailing actions are provided for by the WTO agreement on subsidies and countervailing measures (SCM). Countries seeking to undertake countervailing actions have to prove the existence of a subsidy as defined to prove injury caused to their domestic producers by showing the nexus between the subsidised imports and the injury to the domestic industry.

Countervailing measure is rarely employed in international trade. It is not as prevalently popular as anti-dumping. This is due to the decreasing use of subsidies by states over recent years. Thus, few countervailing measures have been reported to the WTO committee on subsidies and countervailing measures compared to anti-dumping actions in recent years19.

 

2.2.3 Safeguard measures:

Safeguard clauses are a more recent trend in international trade relations, compared to anti-dumping or countervailing laws. Thus, a rapid increase in imports may result to harm to the competing industry in the importing country. This might lead to serious economic and social problems. States are in the practice of including safety values in their trade agreements with other states. These safety valves are clauses that allow parties to temporarily suspend their commitments when they are faced with economic difficulties as a result of the unforeseeable developments from granting trade concessions to trading partners.

Safeguard measures is covered in the WTO agreements20. Its application should not be discriminatory, irrespective of the source of product. There is provision for compensation, often times in trade concessions, to be made to the affected country (s). It is the least utilised remedy within the stringent legal regime and the provision for compensation which makes it less attractive. Also, it does not address any unfair trade practise. The obligation to apply them indiscriminately makes it difficult to manage. It is also time constrained. It only allows a state to breach its bilateral trade agreement while dealing with the economic difficulties as a result of bilateral agreement leading to certain concession. It is always tidy to include a safeguard clause in all bilateral trade agreement so as not to be in breach or cited to be in breach.

 

3. Distinction between trade remedies and regulatory protectionism

In an era of increasing globalisation of the world’s economies, countries are constantly competing for resources, investments, markets and profits through international trade and investments. International trade occurs when businesses transact in goods or services across borders, while international investment occurs when capital and other factors of production cross borders21.

Whether a business trades or investments cross borders is often a matter of strategy. Strategy mainly entails economics, which includes the location of factors of production, tax advantage, regulatory framework and stability, infrastructure, and market access22. Trade and investment are usually two sides of the same coin. One leads to another. Whenever and wherever a market is guaranteed, what usually follow is trade by way of export\import. After experimenting with the market, there will be need to explore establishing plants in that guaranteed market. In other words, there is a link between trade and investment. Both ought not to be treated differently, since they complement each other.

Despite the obvious nexus between trade and investment, international law has evolved to regulate trade and investment differently. Sometimes the same rules are applied to opposite effects, depending on whose interest is at stake. An instance is the national treatment (NT) principle. Applied in international trade law, NT requires an importing country to accord imported goods the same treatment as locally produced goods once the goods have entered the country. The importing country cannot discriminate against the imports. Thus, equal treatment is the buzzword.

In international investment law, on the other hand, NT is applied to prevent host states from making negative differentiation between foreign and domestic investments when enacting and applying its laws23. NT may not be defence to claims by a foreign investor who is adversely affected by governmental actions that affect domestic and foreign investments equally. This discussion is outside scope of this paper.

International trade is shaped and dominated by the developed economies for their advantage. These developed advanced economies of USA, Europe and Asia are generally net exporters of goods and capital. The prevailing dispensation has been to the disadvantage of developing and least developed countries such as those in Africa continent. This paper suggests that with the implementation of appropriate policies, developing countries in Africa and Asia, can apply rules to their advantage. This is already happening with several developing countries particularly Asia economies, expanding their export trade activities and trade surpluses24. This is not to say that some developing countries in working with the laws to their advantage do not change the influence that underpinned the development of the laws to their current dispensation25. Thus, as these laws are now used against the developed countries they are seeking to amend them.

This section of the paper intends to draw a line between anti-dumping and regulatory protectionism. This will not be adequately addressed with mentioning of National Treatment principle and most Favoured Nation principle. These principles operate as buffer to disputes that usually arise from international trade, with regard to trade relations.

Simplistically NT principle is to the effect that imported and locally-produced goods should be treated equally soon as the foreign goods have entered the market of the importing country. The historical origins of the NT principle dates back several centuries26. Provisions of NT appeared in agreements between Italian city states in the eleventh century27. Similar provisions also appeared in commercial treaties concluded between England and continental powers and cities during the twelfth century28. The principle was also adopted in various shipping and trade treaties concluded between European powers in the seventeenth, eighteenth and nineteenth century’s29. From the foregoing long history, NT principles entrenchment in article III of GATT serves as its most recent basis and source of application in international trade. This provision prohibits the use of domestic taxes and other charges, as well as laws, regulations, and requirement that impinge discrimination on the sale, offering for sale, purchase, transportation, distribution, or use of imported products so as to afford protection or advantage to domestic production30.

The NT principle was incorporated into GATT at the instance of the US as a fundamental principle of the agreement31. The rationale was to prevent member countries from adopting protectionist measures against imports32. NT, together with the MFN principles, is viewed as the foundation of GATT\WTO multilateral trading regime. In the advent of GATT agreement, the MFN was the dominant principle applied, as the focus was on reducing high tariffs on imports that worked among other things, to protectionist effects33.

The incorporation of the NT provision in GATT in 1947 was aimed at addressing what was considered to be descriptive protectionist policies of western European countries during World War II. In this regard, exports to those countries were less than imports from those countries especially where it concerned developing countries under colonial rule. Developed economics of Europe have been dominant exporters to goods and services. While the rise of some Asian nations like china, Korea, Malaysia and India, may be indicative of a shift in recent times, the bulk of goods traded internationally originate from developed economies. Developing economies like Africa and emerging markets as they are mostly regarded, are mostly net importers. Such emerging markets are mid-east and Africa. The NT principle is therefore more beneficial to developed economies than developing economics of Africa. Additionally as the principle impinges on the ability of WTO member government to protect domestic producers, it can impact on the emergence of nascent industries which will struggle against imports from established entities overseas. This has implications for the development of the affected economies.

Suffice to note that factors affecting a country’s competitive edge and attractiveness to capital and trade are vast. These includes availability of resources, productivity, physical and ICT infrastructure, geographical location and access to international markets, governance, political and institutional stability, rule of law, business start-ups costs, licensing regimes, labour market conditions, property rights and registration, access to credit, taxes, and enforcement of contracts34.

In decision anti-dumping and regulatory protectionism, it is pertinent to mention the issue of reciprocity. This also has correlation with the MFN and NT principles already discussed above. More than adopted as a trade remedy, anti-dumping could be viewed as a kind of specific reciprocity on the market for market access rights and as an exception for the MFN rule35. This might possibly amount to bilateral renegotiation of trade conditions within the WTO agreements in cases where the balance has been disturbed by conducts that have an impact in a particular trade partner. This is coherent with the aims of GATT and with the ultimate beneficiary of the anti-dumping agreement itself, which is the consumer. The scenarios where this can be critical for the protectionist countries are several but the most salient is the case in which cross subsidies are employed in order to avoid the dumping factual proposition where internal prices are artificially raised in order to protect a certain industry where dumping is impossible to prove.

 

3.1. Finding the faint (thin) line

The fact that anti-dumping measures have been employed as a protectionist measure by countries is renown within the international trade scholarship. Countries have had to steadily adapt from a position of a protectionist policy to more liberal world trade position which has been negotiated and agreed upon by themselves in the several WTO agreements. The vestiges of protectionist action, rules and policies generally emerge from the effective lobby powers of domestic oligo poleis who are a minority in the industrial sector, but a majority in their own area of trade. These groups seek the use of trade remedies especially the subsidies and imposition of anti-dumping duties, to favour their specific domestic industry against competitive imports36. One needs to critically examine the substantial contents and normative composition of the WTO agreements. Thus, the same voices resisting a wider application of the WTO agreements to rectify the problem of protectionism caused by trade remedies are heard protesting against dispute settlement channels. This is because important trading countries may decline further development on remedies and refuse new agreements because of their hunch that the adjudicating body of the WTO undermines, through judicial review, their ability to employ trade remedies. Meanwhile, anti-dumping continues to be interpreted and employed as regulatory protectionism to protect domestic industries from collapse.

On the surface, there is no inherent incompatibility between anti-dumping and competition policies that preclude any kind of interaction37. Suffice it to suggest that both policies, by their nature, purchase identical goals and are mutually supportive of the other38. Both trade and competitive policies were created in order to benefit the consumer and foster wealth by encouraging international trade and investment. It is pertinent to note that the need for a harmonised international protectionist tool to avoid foreign competition does not exist in the legal institution. Multifarious attempts have been made to address the issues in the WTO framework and also the local and regional application of competition law and policy. Some academics have gone so far as to propose an international competition body of laws and policies that is compatible with existing anti-dumping provisions, or includes and modifies the current anti-dumping regime39. These voices have been loud but have not had much recognition in the WTO deliberation due to lack of political will from both developing and developed countries. There is the notoriety to use the international trade regimes strategically and push governments to act for the benefits of the local industry and neglect their international trade commitments. This grants them enough amplitude to obtain a privileged position in the local and regional markets and promotes internationally anticompetitive disposition when it is strongly regulated both nationally and regionally40.

The abuse of trade remedies allowed by the GATT|WTO regime is ultimately a violation of the MFN rule, and could jeopardise the schedule of tariff reduction. Most importantly, abusive anti-dumping measures are anti-competitive according to the competition standards adopted by national and regional trade agreements. Thus, when countries abuse trade remedies, especially anti-dumping measures, the only claim that is available to the affected country is to seek compensation and trade sanctions. This is possible if the WTO decides that the conduct was indeed in breach of the anti-dumping agreement. This redress is available through the dispute settlement channels established by the WTO regime (DSB). In other words, anti-dumping regulations are to be regarded as anticompetitive if there is no reciprocal treatment from the affected country. There is need to promote fair trade and balance of benefits.

As a cue to solving this imbroglio, some countries have neutralised anti-dumping measures by embarking on regional trade agreement and bilateral agreements with strategic partners in order to create exception that will allow them to trade more freely, without hurting their economy. In other words, they have disentangled themselves from both the MFN anti-dumping effects of GATT in certain circumstances as well as with their important trade partners. They are now at liberty to deny market access and MFN treatment with those trade partners who are not sufficiently attractive to them.

As regards Asia Africa trade relations, RTAs and bilateral agreements ultimately encourages free trade and compel countries to abandon their unproductive industries, so as to eventually specialise and become more competitive in their stronger trade services and products. There is a tendency to consider in detail most of the areas of economic interest in the participating countries and regulate them exhaustively. Most RTAs have considered competition as a critical subject of concern and thus have developed a regime of competition rules41.

Competition regulations in RTAs and bilateral agreements tend to avoid the harmful anti-dumping effects on trade by using the exception contained in the GATT. There is yet no international trade system to the rescue. Trade partners are left with their clauses in their bilateral trade agreements (BTA) to resolve any impasse. It is therefore pertinent to note that competition is one of the Singapore is that were launched at the Singapore ministerial conferences, but then it was abandoned in further negotiations during the Doha rounds in 2001. This means that they were aware of the impact of the anticompetitive conducts on international trade, and the challenges that it is facing due to lack of decisive concrete regulation. The attempt at final resolution has, hitherto meet with very little success.

 

4.0. Africans response and contribution to resolving the dilemma

4.1 The background:

African countries constitute about a quarter of the WTO membership, which amounts to 42 out of 158 members42. With this figure, not a single African country has been a complainant, nor a respondent in any WTO case. As third parties the picture is a little positive43. It is widely viewed that dispute settlement correlates to involvement in world trade, hence Africa’s low level participation in WTO dispute settlement system44. This picture becomes clearer when one critically examines the proportion of African trade as WTO members, especially considering the amount of African trade to the volume of total world trade. Moreover, current figures show that African countries make up less than 30% of world trade, and two thirds of this consists of mineral mining products45. It is pertinent to note that most of African trade falls under preferential arrangements, such as the US AGOA program and the EU’s EBA\EPA arrangements. In other words, if one takes away preferential trade, the zero percent rate of direct participation in dispute settlement might be obvious. This ratio tends to be misleading and of little sense to correlate dispute settlement activity with shares of world trade, since not all trade is equally sensitive. The correct ratio should be between cases and the importance of trade barriers to any given country46.

Suffice it to note that the main trade barriers affecting trade are multilateral in origin. This can be traced to subsidies, as well as health and safety technical barriers to trade on agricultural products from African countries47. There is little impact trying to improve African participation in the system if it fails to achieve a result. This goes to inquire whether the WTO offers African countries an effective system of remedies, and way forward. Africa seems to reach a dead end in the international trade regime\system. There seems not to be any favour able resolution of Africans poor participation in global trade. The enforcement mechanism of any rule governing world trade is weak that Africa leverage on same seem not be helpful. In other words, there is some merit in opening up to counter measures to the broader WTO membership. Thus, administrative sanctions could work, or perhaps automatic rights to cross-retaliate to unfair and unfavourable trade relations. This option comes with practical and legal hurdles of its own. This relates to the WTO version of the public international law principle of proportionality between retaliation and the original damage. The system needs some flexibility in determining proportionality.

 

4.2. Resort to trade remedies actions by African countries

This paper shall now examine the use of trade remedies by African countries and how it affects Asia Africa trade relations. This paper also explores, conversely the use of these measures against African exports. The only data available at the moment is the WTO period of 1995-2011. We have earlier noted that there are only 42 African members to the WTO. The only non-members are Libya, Algeria, Ethiopia and Sudan.

Antidumping is the most preferred trade remedy instrument by states, including African countries. According to WTO records, earlier cited, African countries reported some 280 antidumping investigations to the WTO, of which 181 ended up being endorsed and applied. It is pertinent to note that trade remedies are at their initial stages of development.

Prior to the 1980s, developed countries were the primary users of antidumping measures, but since the 1990s these countries have been overtaken by developing countries. Thus, in Africa, South Africa and Egypt have been the major traditional players in antidumping actions. However, new countries are joining such as morocco (2011), Mauritius, Kenya and Ghana that are in the process of enacting their antidumping legislation and establishing an investigating authority.

Reverting to Asia African trade relations, the largest trade partners are china, India, South Korea and Malaysia. China seems to be the most visible trading partners and also the single biggest target of Africa’s anti-dumping actions48. This may be due to the impression of china as a champion of cheap products. There is therefore the thin line between the antidumping actions for protectionist purposes especially regarding cheap imports and dumped imports. This relates to china being classified by many countries as non-market economy, which makes dumping easier to detect. It is pertinent to note that African antidumping actions have covered a variety of products, such as plastic\ rubber products, chemicals, machinery and wood products.

Regarding countervailing actions and safeguard measures, scrutiny of data shows that African countries rarely resort to these remedies compared to antidumping measures. The main targets of the countervailing actions are usually Europe and India. Contrary to antidumping and countervailing measures, safeguards do not address any unfair trade practice and often is applied to all sources of importation, regardless of who may be actually responsible for the troubles in the domestic industry. There is no specific target country when initiating safeguard legislation. The measure mostly targets the biggest exporters of industrial products. A diverse range of products have been targeted, such as textiles, machinery, vegetable oil, ceramic products and pharmaceutical products.

From the forgoing, trade remedy activity in Africa occurs among very limited numbers of countries, which used to be some of the most advanced economies of the continent. These proffer a hint to the factors that may explain the lower resort to trade remedies on the African continent. It portrays that the more the country is developed and has a certain level of industrialisation, the more it is likely to possess the capacity and the willingness to resort to trade remedies. This is a hypothesis that needs to be further explored in a subsequent future forum.

Finally this paper has displayed that trade remedies are important instrument for preserving domestic industries and stimulating economic growth\development. It is critical that African countries rarely resort to them, due to inability to draw the line between trade remedy measures and regulatory protectionism for the sake of stimulating economic and industrial development. Often attributable to Africa’s poor showing in the use of trade remedies are absence of national legal and institutional frameworks, the lack of expertise and high cost of trade remedies, the availability of alternative instruments, the disorganisation of the African business community, and finally political factors49. Africa is confronted by so many problems and priorities. The continent tends not to deploy scarce resources to build up trade remedy systems. These scarce resources need to be deployed to such sectors like infrastructure development, education, and health care, among others. Notwithstanding, these arguments there are strong arguments in support of trade remedies, both from development economics perspective, transparency and good governance rationale.

 

5. Conclusion

One might wonder if a genuine industrialisation process can take place in today’s world with a protections being de-emphasised as a result of WTO and free trade agreements. Most countries that are currently industrialised used protectionist policies when they were at their early stages of development. Suffice it to refer to the British industrialisation between 1770 and 1830, the North Atlantic revolution between 1873 and 1914, the south-East Asia ‘miracle’ between 1950 and 1995. Africa seems to be the only region in history that has to industrialise without these policies.

China, South Korea, and Malaysia are the major trading partners of African countries. Chinese products come very cheap and affordable to any income level, whether low, middle or high income earners. Most high income earners patronise European products more than products from Asia due to the fact that European products are more durable and used as a status symbols.

China has, over the years, become major aid provider and source of investment for many African countries, yet there are indications that cheap exports from china (and most ASEAN economics) are leading to further de-industrialisation of the continent. It is also regarded as impeding any genuine industrialisation process to take root51.

There is need for Africa to achieve more dynamic comparative and competitive advantages especially under the prevailing institutional rules52. Thus, blatant protectionism is no longer tenable, as what is required is use of “smart protection” instruments such as trade remedies for African countries to fully leverages on their Asia- African trade relations without hurting the local industry. African countries have no choice but to equip themselves with the available, globally accepted, legal protection instruments, including trade remedies. There is evidence that trade remedies, as a tool of flexibility, promote cooperation and make countries more willing to engage in international trade liberalisation. In other words, assisting African countries to equip themselves with trade remedy framework would therefore not lead to an increase in protectionism in these countries. Thus, empirical studies have shown that states that possess national trade remedy mechanisms, especially antidumping, are more likely to join and cooperate with the WTO53.

Challenges lie ahead for these countries and their trading partners, in the sense of meeting WTO standards and legal requirement for use of trade remedies. Examples of protectionist measures are tariff hikes, import prohibitions, or voluntary export restraint arrangement, which are usually discretionary, administered by government which leaves rooms for politics, favouritism, and rent seeking tendencies. Suffice it to finally note that establishing a proactive antidumping system requires more than passing simple law.

 

Ogechukwu Ojimaduekwu Ajoku

Law Practitioner and Consultant

Principal(Heir): Ojimaduekwu Solicitors & Attorneys

Read more about Ogechukwu and his view on being a futurist.

 

  • 1. PA messerlin, Anti dumping regulations or procartel law? The EC chemical cases April 1990 working papers, international economics department, the world bank
  • 2. A.O. Sykes, “Trade remedies laws”, John M. Olin law and economics working paper, No.240, April 2005,p.2
  • 3. Ibid
  • 4. Ibid
  • 5. WTO 2010
  • 6. Ousseni Illy, trade remedies in Africa Experiences: challenges and prospects, a paper presented at the 4th Global leaders fellowship program annual colloquium at Princeton university, USA,13- 15 may, 2012
  • 7. Ibid
  • 8. D.Njinkeu and C.C. Soludo, “industrializing Africa using the WTO framework”, the WB research and capacity-building projects, cap5
  • 9. Luz Helena hanaeur, ‘Anti-Dumping from trade remedy to regulatory protectionism,’ International economic laws (voices of Africa) Emmanuel T. laryea etal (ed) 2012,p.43
  • 10. Ibid
  • 11. Ibid, p. 44
  • 12. J Bovard, “Two cheers for GATT”, November 1994 Policy Backgrounder No. 135, the National Centre for Policy Analysis at 8, available at http: || www. ncpa . org |PDFs| pg 135. PDF, accessed 1|10|2014
  • 13. Luz Helena hanaver, supra, p. 45
  • 14. J Michael “the origins and evolution of anti-dumping regulation”, working paper, the World Bank{WPS 783}, October 1991p.3.
  • 15. Ousenni 111y, supra, n.6. this dates back to 1914. Ibid
  • 16. Uruguay round agreement on implementation of article vi of GATT 1994, and anti-dumping agreement, art.2, para, 1
  • 17. Art. Vi, para1 of GATT 1994
  • 18. A.O. Sykes supra, n.2
  • 19. Ousseni 111y, supra, note 6
  • 20. Art.9
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  • 22. Ibid
  • 23. Emmanuel T LARYEA, rules for entrenching economic dominance by developed countries. Examples in international trade and investment laws, Nokulie madolo etal (ed) international economic law (voice of Africa) 2012, p.91
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  • 27. Ibid
  • 28. G Sharzen beryer, The most favored-nation treatment in British state reactive (1945) 22 British year book international law 96 at 97
  • 29. W mc Clair German American commercial relations (1925) 19 AJIL 689-701
  • 30. GATT, Art. III (1)
  • 31. JH Jackson, world trade and the law of GATT (1969) 37
  • 32. K D Dam, the GATT Law and international economic organization (1970) 6-12
  • 33. MJ Trebicock & R Howse, the Regulation of International Trade 2nd edition (1999) 112-134
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  • 36. D Becker, the strategic use of anti-dumping in international trade (2006) 7 South African journal of Economics 501-26
  • 37. WTO report of the working group on interaction between trade and competition policy to the general council WT|WGTCP|2, 8 December 1998, para 23
  • 38. Ibid
  • 39. R Zach, International Cooperation Between Antitrust Enforcement Agencies. A view from a small country’ in Hullrich (ed) Comparative Competition Law: Approaching an International System of Anti-trust Law (1986) 206
  • 40. Panel report United States Anti-dumping measures on certain Hot-rolled steel products WT|DS 184|R,28 February 2001
  • 41. M Janow, ‘Trade and competition policy in PF Macrory, A E Appleton & MG Plummer {eds} the world trade organization: legal, economic and political analysis vol. II {2005} 474
  • 42. Lorand Bartels, ‘Making WTO, dispute settlement work for African countries: an Evaluation of current Proposals for reforming the DSU, paper on a research conducted for the commonwealth secretariat, and also delivered at the second African International Economic Law Network conference held in university of Witwatersrand, Johannesburg, south Africa from 7-8 march 2013
  • 43. Ibid
  • 44. Jan Bohannes and Fernanda Garza, ‘going beyond stereotypes: participation of developing countries in WTO Dispute settlement {2012}4 Journal of trade law and development 45
  • 45. http://www.wto. Org\English\ news e\ news 12 e\ ddg 12 apr 12 e. htm
  • 46. Lorand bartels, supra, n.39
  • 47. Ibid
  • 48. WTO Document WT\ COMTD|W\143\REV 5, 28 October 2010, p.26
  • 49. Ousseni 111y, ‘trade remedies in Africa: experiences, challenges and prospects’, a paper presented at the 4th global leaders fellowship program annual colloqmum at Princeton university, Princeton, USA, 13-15 may 2012
  • 50. R. Sandrey and H.Fdiger, “Chinas manufacturing and industrialization in Africa”, African development bank working paper No. 128, may 2011
  • 51. Ibid
  • 52. D. Njinkeu and C.C Soludo, “Industrializing Africa using WTO framework”, Preparing for the WTO 2000 negotiations, the world bank research and capacity-building projects, chapter 5
  • 53. J. Kucik and E. Beinhardt, “Does Flexibility Promote Cooperation? An application to the global trade regime”, international organization summer 2008 pp 477-505

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