Volume 17, Number 4 Article by Susanta S Das December, 2005
Evolution and Political Economy of Trade Protectionism: Antidumping and Safeguard Measures :
Since World War II, the global trend across countries has been towards greater liberalisation, due largely to the multilateral trade regime and a broad application of the most favoured nation principle. Nevertheless, pressures originating from both the international and domestic arenas have ensured that protectionism, whether in the form of tariffs, antidumping and safeguard mechanisms or other non-tariff mechanisms, remains a powerful force. A significant cross-national variation in protection exists, which can be partly explained by domestic compulsions. The dual pressure for trade liberalisation on the one hand and protection on the other has forced nations to evolve various measures to guard against contingencies arising out of liberalisation and tariff reduction under the multilateral trade regime. This paper analyses the evolution and political economy of trade protectionism with regard to the two major trade remedy instruments i.e., Antidumping and Safeguards, with particular focus on Antidumping, which has become the most favoured instrument of trade remedy.
The GATT/WTO provisions for these contingency protections are fungible, as a result of which they may cause large trade distortions, the very problems which these instruments were designed to solve. S S Das examines the domestic political economy in three major trading nations – the US, the EU and Japan – and their influence on the evolution of trade remedy mechanisms under multilateral arrangements. He finds that the political economy considerations and domestic lobbying powers at a given time largely decide a nation’s policies on trading and trade remedy mechanisms. The GATT/WTO rules do not distinguish economically sound trade restrictions from ordinary protection. The challenge for national governments is to identify and adopt a trade remedy system that makes economic and political sense, with restrictions that will advance the national economic interests and political dimensions that will help integrate the national economy into the global system.
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