PROTECTIONISM VERSUS FREE TRADE: IMPLEMENTING THE GATT ANTIDUMPING AGREEMENT IN THE UNITED STATES MARIE LOUISE HURABIELL* 1. INTRODUCTION The trade policy of the United States government reflects an attempt to reconcile the inherently incompatible goals of free trade and protectionism. One central objective is the promotion of free trade based on "the unchallenged proposition that every country is better off in a world of free trade than in a world in which all countries practice highly protectionist policies .... "' Thus, a global economy promoting free trade enhances competition within indus- tries which, in turn, yields greater efficiency and better products, particularly in domestic companies. At odds with free trade, however, is protectionism, which "protects one group - some special interest - at the expense of the general public."3 Outwardly, the U.S. government has adopted a posture extolling the virtues of * J.D. Candidate, 1996, University of Pennsylvania Law School; B.A., 1992, Georgetown University. This Comment is dedicated to my mom and dad, John and Judi Hurabiell, and to my grandparents, Ebbie and Alsie. I am deeply indebted to each of you for the tremendous love and support that you have unfailingly provided throughout my life. Love and thanks to my siblings Michele, Heather, and Johnny, and my friends Wendy Simpson, Allison Gregal, Tara Farnsworth, and Lisa Winsheimer for their constant love and belief in me. Thanks to Mark Mindich for his feedback on the concept of dumping and for always making me smile. Special thanks to Tara Brennan and Eric McCarthy for their help in editing this piece. ' Anne 0. Krueger, Free Trade Is the Best Policy, in AN AMERICAN TRADE STRATEGY: OPTIONS FOR THE 1990S 68, 68 (Robert Z. Lawrence & Charles L. Schultze eds., 1990) [hereinafter AN AMERICAN TRADE STRATEGY]. 2 See id. s Robert W. McGee, An Economic Analysis of Protectionism in the United States with Implications for International Trade in Europe, 26 GEO. WASH. J. INVL L. & ECON. 539, 539 (1993). (567) Published by Penn Law: Legal Scholarship Repository, 2014 568 U. Pa. J. Int'l Bus. L. [Vol. 16:3 free trade. U.S. political leaders' apparent acknowledge- ment of the benefits of free trade, juxtaposed with the consistent failure of protectionist trade policies, has lead to a contradictory outcome - these leaders have not complete- ly embraced free trade and continue to advocate protection- ism.4 For example, the United States regularly invokes antidumping measures. These protectionist policies are incompatible with a system of free trade, and, more specifically, they are incompatible with the General Agree- ment on Tariffs and Trade5 ("General Agreement" or "GATT") to which the United States is a signatory. Can the Uruguay Round Agreements of the GATT overcome linger- ing conflicts between U.S. protectionism and the goals of free trade? This Comment reviews this question specifically in the context of antidumping laws. Section 2 of this Comment reviews the General Agree- ment, its history, goals, and treatment of antidumping laws. Section 3 documents the history of antidumping laws in the United States and analyzes their effect on both the national economy and on the United States' position in international trade. Section 4 addresses the Uruguay Round itself, some of the changes in international antidumping practices resulting from this round of agreements, as well as possible ramifications for the United States. Section 5 details Congress' response to the Uruguay Round.6 Section 6 compares specific provisions of the implementing legislation with provisions of the General Agreement and analyzes the vulnerabilities of the resulting U.S. policies to foreign challenge. Finally, Section 7 predicts the world commun- ity's reaction to the changes in U.S. antidumping laws. 4 See id. 5 General Agreement on Tariffs and Trade, opened for signatureOct. 30, 1947, 61 Stat. A3, T.I.A.S. No. 1700, 55 U.N.T.S. 187, reprinted in IV Basic Instrument and Selected Documents 3 (1969) [hereinafter General Agreement]. 6 It was clear from the outset that if the United States ratified the General Agreement, U.S. antidumping laws would require substantial alterations in order to align with the GATT. As there could be no tampering with the GATT itself, members of Congress focused their energies on the implementing legislation. https://scholarship.law.upenn.edu/jil/vol16/iss3/5 1995] GATT ANTIDUMPING AGREEMENT 569 2. THE GENERAL AGREEMENT ON TARIFFS AND TRADE Established in 1948, the GATT emerged from Atlantic Charter discussions between the United States and Brit- ain.7 Ultimately, twenty-three trading nations jointly entered into the first and "only multilateral instrument"8 which sets out "agreed rules for international trade." After the drafters abandoned related plans to charter an International Trade Organization ("ITO"),9 the General Agreement then took on a dual role ° both as an agree- ment and as an organization." Since then, the GATT, has not been a stagnant expression of international agree- 12 - ment. 7 See ROBERT JEROME, WORLD TRADE AT THE CROSSROADS: THE URUGUAY ROUND, GATT, AND BEYOND 4 (1992). 8 GATT INFORMATION AND MEDIA RELATIONS DIVISION, GENERAL AGREEMENT ON TARIFFS AND TRADE: WHAT IT Is, WHAT IT DOES 1 (1989) [hereinafter GATT INFORMATION LEAFLET]. ' See id. The ITO was designed to be the "organizational base" of the GATT and would have handled administrative functions related to the General Agreement. JOHN H. JACKSON, WORLD TRADE AND THE LAW OF GATT § 1.7 (1969) [hereinafter JACKSON, WORLD TRADE]. 10 See GATT INFORMATION LEAFLET, supra note 8, at 1-2. " See id. at 1. See JOHN H. JACKSON & WILLIAM J. DAVEY, LEGAL PROBLEMS OF INTERNATIONAL ECONOMIC RELATIONS 324 (2d ed. 1986). A total of eight rounds of multilateral trade negotiations have taken place under the GATT. These are: Participating Location Year(s) Countries 1. Geneva, Switz. 1947 23 2. Annecy, France 1948 33 3. Torquay, England 1950 34 4. Geneva, Switz. 1956 22 5. "Dillon Round" - 1960-61 45 Geneva, Switz. 6. "Kennedy Round" - 1964-67 48 Geneva, Switz. 7. "Tokyo Round" - 1973-79 99 Geneva, Switz. 8. "Uruguay Round" - 1986-94 124 Punta del Este, Uruguay See id. at 324-25; Communication from the Chairman, Multilateral Trade Negotiations, The Uruguay Round, 11 April 1994, reprinted in MESSAGE FROM THE PRESIDENT OF THE UNITED STATES TRANSMITTING THE URUGUAY ROUND TRADE AGREEMENTS, TEXTS OF AGREEMENTS Published by Penn Law: Legal Scholarship Repository, 2014 570 U. Pa. J. Int'l Bus. L. [Vol. 16:3 Subsequent rounds of negotiation have reworked the GATT."3 The Uruguay Round, the eighth round of these multilateral trade negotiations, began in September 1986.4 These negotiations were undertaken in order to further trade liberalization15 and were finally concluded in December 1993, after more than seven years of negotia- tions. 6 The Uruguay Round was signed in Marrakesh, Morocco, by more than 100 countries (including the United States) in April 1994." 2.1. Goals of the GATT The General Agreement aims both to substantially reduce "tariffs and other barriers to trade" and to eliminate8 "discriminatory treatment in international commerce." Although the language of the GATT is complex, agreement among the signatories is predicated upon simple princi- ples.'9 These principles include: (1) "trade without dis- crimination," as stated in the "most-favored-nation" clause;2° (2) "protection through tariffs;"2' (3) creating "a stable basis for trade;"22 (4) "promoting fair competi- IMPLEMENTING BILL, STATEMENT OF ADMINISTRATIVE ACTION AND REQUIRED SUPPORTING STATEMENTS, H.R. Doc. No. 316, 103d Cong., 2d Sess. 1453, 2039 (1994) [hereinafter MESSAGE FROM THE PRESIDENT]. 13 See GATT INFORMATION LEAFLET, supra note 8, at 2-3. Parties to the General Agreement have conducted a series of multilateral negotiations to continue the reduction of trade barriers. Id. '4 See JEROME, supra note 7, at v. 15 See GAT1T INFORMATION LEAFLET, supra note 8, at 3. "6 House, Senate Conferees Complete Work on GAT Bill, Predict PassageNext Month, 63 Banking Rep. (BNA) No. 11, 431, 432 (Sept. 26, 1994). 17 See id. 18 General Agreement, supra note 5, preamble; see also JACKSON & DAVEY, supra note 12, at 8 (noting that "[tihe principal goal of [the] GATT was to establish agreed upon limitations on tariffs and to control the use of certain non-tariff barriers to trade"); Roger P. Alford, Note, Why a Private Right of Action Against Dumping Would Violate GATT, 66 N.Y.U. L. REV. 696, 696 (1991) ("To achieve these objectives, [the] GATT is directed at 'the substantial reduction of tariffs and other barriers to trade and to the elimination of discriminatory treatment in international commerce."'). 19 See GATT INFORMATION LEAFLET, supra note 8, at 3. 20 Id. 21 Id. 22 Id. at 4. https://scholarship.law.upenn.edu/jil/vol16/iss3/5 1995] GATT ANTIDUMPING AGREEMENT tion;"2 s (5) "quantitative restrictions on imports;"24 (6) "the 'waiver' and possible emergency action;" (7) "regional trading arrangements;" 26 and (8) "settling trade dis- putes."2 ' Due to the GATT's relative success in effectuat- ing these goals, it is recognized as the "most28 important agreement regulating trade among nations." 2.2. Antidumping and the GATT "Dumping"29 does not violate the objectives of the GATT.3 ° The General Agreement defines dumping as introducing a product "into the commerce of another country at less than its normal value.""1 In other words, 23 Id. 24 Id. 2 Id. at 5. 26 Id. at 6. 27 Id. ' Alford, supra note 18, at 696 (quoting Roger P. Alford, When is China Paraguay?An Examination of the Application of the Antidump- ing and CountervailingDuty Laws of the United States to China and Other 2Vonmarket Economy' Nations, 61 S. CAL. L. REV. 79, 83 n.23 (1987) (quoting JOHN H. JACKSON, The General Agreement on Tariffs and Trade, in 1 A LAWYER'S GUIDE TO INTERNATIONAL BusINEss TRANSACTIONS 41 (Walter S.