34721 SAFEGUARDS & ANTIDUMPING IN LATIN AMERICAN Public Disclosure Authorized TRADE LIBERALIZATION FIGHTING FIRE WITH FIRE Editors J. Michael Finger • Julio J. Nogués Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Safeguards and Antidumping in Latin American Trade Liberalization Safeguards and Antidumping in Latin American Trade Liberalization Fighting Fire with Fire Edited by J. Michael Finger and Julio J. Nogués A copublication of Palgrave Macmillan and the World Bank ©2006 The International Bank for Reconstruction and Development / The World Bank 1818 H Street NW Washington, DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org E-mail: [email protected] All rights reserved. 123409080706 A copublication of The World Bank and Palgrave Macmillan. 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All other queries on rights and licenses, including subsidiary rights, should be addressed to the Office of the Publisher, The World Bank, 1818 H Street NW,Washington, DC 20433, USA; fax: 202-522-2422; e-mail: [email protected]. ISBN-10: 0-8213-6308-5 (softcover) ISBN-10: 0-8213-6368-9 (hardcover) ISBN-13: 978-0-8213-6308-9 eISBN-10: 0-8213-6309-3 eISBN-13: 978-0-8213-6309-6 DOI: 10.1596/978-0-8213-6308-9 Library of Congress Cataloging-in-Publication Data Finger, J.M. Safeguards and antidumping in Latin American trade liberalization : fighting fire with fire/ by J. Michael Finger and Julio J. Nogués p. cm. Includes bibliographical references and index. ISBN-13: 978-0-8213-6308-9 ISBN-10: 0-8213-6308-5 1. Protectionism—Latin America. 2. Dumping (International trade)—Law and legislation Latin America. 3. Foreign trade regulation—Latin America. I. Nogués, Julio J. II. Title. HF1770 5.F56 2005 382’.73’098—dc22 2005043682 Cover photos: Yuri Kozyrev/The World Bank; Royalty Free/Corbis. Contents Preface xi Acknowledgments xv Contributors xvii Abbreviations and Acronyms xix 1 Introduction and Overview 1 J. Michael Finger and Julio J. Nogués 2 Political Economy of Antidumping and Safeguards in Argentina 45 Julio J. Nogués and Elías Baracat 3 Antidumping and Safeguard Mechanisms: The Brazilian Experience, 1988–2003 79 Honorio Kume and Guida Piani 4 Keeping Animal Spirits Asleep: The Case of Chile 109 Sebastián Sáez 5 Application of Safeguards and Antidumping Duties in Colombia 137 Mauricio Reina and Sandra Zuluaga 6 Antidumping Policies and Safeguard Measures in the Context of Costa Rica’s Economic Liberalization 169 Ricardo Monge-González and Francisco Monge-Ariño 7 Antidumping and Safeguard Measures in the Political Economy of Liberalization: The Mexican Case 205 Luz Elena Reyes de la Torre and Jorge G. González 8 Antidumping Mechanisms and Safeguards in Peru 247 Richard Webb, Josefina Camminati, and Raúl León Thorne Index 279 v vi Contents Figures 2.1 Argentina: Real Exchange Rate, 1985–2002 49 2.2 Argentina: Trade Flows 50 2.3 Argentina: Antidumping Initiations and GDP Growth, 1995–2003 58 3.1 Indexes of Import Volumes, Real Exchange Rate, Real GDP, and Average Nominal Tariff Rate for the 1987–2003 Period 84 3.2 Brazil: Ratio of Import to Domestic Production Values for Certain Products, 1990 and 2002 85 3.3 Number of Antidumping Cases in Brazil, 1988–2003 94 3.4 Share of Approved Antidumping Cases in Brazil, 1988–2002 94 4.1 Chile: Tariffs and Real Exchange Rate, 1973–2003 111 4.2 Chile: Applications Submitted and Investigations Initiated, 1981–2002 114 5.1 Colombia: Average Tariff, 1986–2002 139 5.2 Colombia: Real Exchange Rate Index 140 5.3 Colombia: Number of Dumping and Safeguard Applications and Real Exchange Rate 151 5.4 Colombia: Textile and Apparel Imports 159 6.1 Costa Rica: Exports, Imports, and Average Tariff, 1982–2003 172 6.2 Costa Rica: Evolution of Share of Destination Countries for Main Exports 173 6.3 Costa Rica: Current Account Deficit, 1983–2003 174 6.4 Costa Rica: Evolution of Inflation and Real Effective Exchange Rate, 1983–2003 175 6.5 Costa Rica: Direct Foreign Investment Flows, 1970–2003 176 6.6 Costa Rica: Relative Importance of Nontraditional Exports, 1982–2003 176 6.7 Costa Rica: Composition of Exporting Firms, by Size of Firm, 2003 177 6.8Costa Rica: Per Capita GDP, Open Unemployment, Underemployment, and Percentage of Households below Poverty Line, 1982–2003 177 6.9 Costa Rica: Degree of Liberalization and Per Capita GDP 178 6.10 Stages in the Process of a Dumping Complaint in Costa Rica, Pursuant to the Central American Rules 183 7.1 Investigations Initiated in Mexico, 1987–2003 219 7.2 Investigations Initiated and Over- and Undervaluation Margins of the Exchange Rate in Mexico, 1987–2003 219 7.3 Investigations Initiated in Mexico in Relation to Major Economic and Political Events, 1987–2003 220 7.4 Investigations in Mexico, by Sector, 1987–2002 221 Contents vii 8.1 Organizational Structure of the National Institute for the Defense of Competition and the Protection of Intellectual Property (Indecopi) 255 8.2 Antidumping Procedure 261 8.3 Safeguards Procedure 263 8.4 Investigations and Antidumping Duties in Peru, 1993 to July 2004 268 Tables 1.1 Colombia: Safeguard and Antidumping Investigations, 1990–June 2004 13 1.2 Mexico: Antidumping Duty Levels in Different Situations 19 1.3 Outcomes of Peru’s Antidumping Investigations, 1993–June 2004 23 1.4 Applied Tariff Rates on Industrial Goods for Selected Latin American Countries 27 1.5 Antidumping Initiations as Notified to WTO, 1995–June 2004: Countries Included in the Study and Major Users 28 1.6 Antidumping Measures as Notified to WTO, 1995–June 2004 28 1.7 Countervailing Duty Initiations and Measures, 1995–June 2004 30 1.8Numbers of Safeguard Initiations and Other Safeguard Actions Notified to the WTO by Selected Latin American Countries, 1996–October 18, 2004 32 2.1 Argentina: Ad Valorem Tariffs and Import Licenses, 1980–92 47 2.2 Argentina: Antidumping Investigations by Requesting Industries, 1995–2004 59 2.3 Argentina: Antidumping Investigations by Target Country, 1995–2004 60 2.4 Argentina: Percentage of Antidumping Measures Coverage 61 2.5 Argentina: Injury Determinations in Antidumping Investigations, 1995–2004 62 2.6 Argentina: Antidumping Measures 64 2.7 Argentina: Outcome Petitions under the Safeguards Agreement 69 2.8Argentina: Petitions for Safeguards under the ATC70 Agreement 3.1 Brazil: Number and Percentage of Investigations with On-the-Spot Verifications for Injury and Dumping Determinations 89 3.2 Number of Antidumping Cases Initiated between 1995 and 2002—Main Countries 90 3.3 Countries Initiating the Largest Numbers of Safeguard Cases 92 3.4 Number of Antidumping, Antisubsidy, and Safeguard Cases Initiated by Brazil, 1987–2003 93 viii Contents 3.5 Brazil: Antidumping Cases by Group of Products, 1988–2002 96 3.6 Number of Antidumping Cases in Brazil with Final Determinations, Grouped by Exporting Country or Bloc 97 3.7 Antidumping Cases for Brazil: Preliminary Duty Rates, Normal Value Method, and Antidumping Duty as Percentage of Estimated Dumping Margin 98 3.8Brazil: Cases Ended without a Restrictive Outcome, Classified by Motives 99 3.9 Brazil: Distribution of Antidumping Cases with a Final Determination, by Number of Domestic Firms 100 3.10 Brazil: Antidumping Cases and Selected Indicators, by Subperiods 100 3.11 Safeguard Measures in Brazil, 1996–2003 102 4.1 Chile: Development of Legislation, 1981–2000 112 4.2 Chile: Definitive Measures of the National Commission for Price Distortions and Sectors Affected 115 4.3 Chile: Investigation Procedure and Stages 119 4.4 Chile: Antidumping Duties, 1992–2002 123 4.5 Chile: Global Safeguards and Bilateral Agreements 126 4.6 Chile: Safeguard Investigations, 1999–2003 128 5.1 Preferential Tariffs Granted by Colombia: Liberalization Levels 141 5.2 Colombia: Investigations Conducted, 1990–2004 149 5.3 Colombia: Investigations by Sector, 1990–2004 152 5.4 Colombia: Dumping Investigations