The Offsetting Duty Norm and the Simultaneous Application of Countervailing and Antidumping Duties
30 Pages Posted: 6 Aug 2010 Last revised: 15 Oct 2010
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The Offsetting Duty Norm and the Simultaneous Application of Countervailing and Antidumping Duties
The Offsetting Duty Norm and the Simultaneous Application of Countervailing and Antidumping Duties
Date Written: September 2010
Abstract
World Trade Organization members have long expressed a norm concerning the trade “remedies” of countervailing (anti-subsidy) duties and antidumping duties: that these measures offset the behavior that gives rise to them. This paper analyzes the simultaneous application countervailing duties and antidumping duties in light of this norm. Once rare, simultaneous countervailing and antidumping duty proceedings have recently become perhaps the most prominent expression of trade protection permitted under WTO rules. The chief analytic focus is whether, or to what extent, the duties should be cumulative when they are simultaneously applied. The analysis first adopts the assumption that underlies modern countervailing duty laws, that the subsidies that the duties offset are passed on fully in prices. The analysis is then broadened to consider cases in which pass-through of the subsidy to prices is not perfect. The paper establishes the theoretical conditions to identify any overlap in the application of countervailing and antidumping responses to subsidization and to dumping. These conditions have direct application to current policy debate.
Keywords: international trade, antidumping, countervailing duty, trade policy
JEL Classification: F13
Suggested Citation: Suggested Citation
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