July 31,2003

New GAO Report on WTO Trade Remedy Rulings


To: Reporters and Editors
Re: New GAO Report on WTO Trade Remedy Rulings
Da: Thursday, July 31, 2003

On Wednesday the General Accounting Office released a report on the standard of reviewand impact of trade remedy rulings in the World Trade Organization. The report examines trendsin WTO trade remedy disputes since 1995, including the outcomes of these disputes and the extentto which they affected the ability of WTO members to impose trade remedies. The report alsodiscusses the standards of review that the WTO applies when ruling on trade remedy disputes, andsummarizes the views of legal experts and U.S. government officials regarding the WTO’sapplication of these standards of review. Sen. Chuck Grassley, chairman of the Committee onFinance, offered the following comments on the report:

“This GAO report indicates that the United States is treated no differently than any of ourtrading partners at the WTO. In 21 of the trade remedy cases completed from 1995 through 2002,the WTO made findings on 175 domestic agency determinations. The key point is that, overall, theWTO rejected our determinations in the same proportion as all other WTO members – 57 percentfor the United States and 56 percent for everyone else. When it comes just to antidumping dutydeterminations, the Journal of International Economic Law recently published a study that came toa similar conclusion.

“Now, it’s not surprising that we’re the target of so many challenges. The United Statesimposed more trade remedy measures – 239 – than any of our trading partners. On top of that, the United States is the single largest market and biggest export destination in the world. And because our administrative decision-making is so open, we tend to be subject to more challenges by ourtrading partners.

“But we also bring cases to the WTO. In fact, the United States accounts for over one-quarterof the total number of complaints filed with the WTO. And we’ve won some important cases. Justthis year we won a case against Japan’s SPS restrictions on our apple exports. We also successfully defended our sunset laws against a challenge from Japan, and we successfully defended our rules oforigin in a challenge brought by India. The important point to keep in mind is that we gain muchfrom a rules-based system of international trade.

“The GAO report also states that a majority of the legal experts consulted found that theWTO has properly applied standards of review and correctly ruled on major trade remedy issues.This is encouraging. For those who might feel otherwise, there is an ongoing process in the WTOto address the standard of review.

“In December 1993, the Uruguay Round Trade Negotiations Committee decided that thestandard of review for antidumping duty determinations – article 17.6 – should be reviewed afterthree years to see if it should be applied generally to WTO disputes. I’m disappointed that thisreview did not take place.

“On June 18, 2003, however, the United States proposed in the WTO Negotiating Group onRules that members consider whether application of the article 17.6 standard of review should be expanded. I believe that discussions in the rules negotiations are the appropriate forum for addressing the standard of review and the application of article 17.6 in the WTO. I will continue to monitor developments in these areas closely.”