Think Tank Calls for More Complainant-Friendly AD/CVD Law
Former U.S. trade representatives and think tank scholars at the Center for Strategic and International Studies say that a revised antidumping and countervailing duty law, which would allow the mere threat of harm, rather than evidence of harm, before the imposition of defensive tariffs, is needed to restore political support for globalization. In addition, they think the U.S. should revive a China-specific safeguard, and encourage other market economies to create their own versions.
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“Restoring the China-specific safeguard would provide a targeted backstop to stem injurious imports that are not the product of a specific subsidy or dumping but rather are fueled by, for example, overcapacity. The safeguard process should follow procedures set out in Section 421 of the Trade Act of 1974, the original China safeguard statute, which was adapted from Section 201 of the same act,” they wrote in a report.
They also think a faster response is needed to tariff evasion. Bill Brock, a former congressman and senator and USTR during the Reagan era, and Charlene Barshefsky, one of President Bill Clinton's trade representatives, spoke with trade scholar Bill Reinsch Feb. 2 as they introduced the new report on their recommendations for trade policy. “Trade takes the blame rightly or wrongly for bad things that happen in the economy,” Reinsch said.
Reinsch said of the AD/CVD system: “What we’ve learned over the last 20 years, while they work, they don’t work fast enough. You want to get relief … and you want to get it before you’re broke.” The report also recommends that the U.S. convene a compact of like-minded market economies to find consensus on how to counter non-market, trade-distorting practices, as well as address digital trade, using trade policy to slow climate change and using trade policy to shore up labor protections around the world. “The compact would allow members to jointly address national security concerns stemming from unfair trade practices, supply chain security, and reliance on potential rivals for critical goods and services,” the report said.
The think tank does not see the compact as a replacement for the World Trade Organization, but hopes that it would supplement it. They call for what they called pragmatic WTO reform, such as the restoration of the appellate body, and creating penalties for countries that don't comply with rules on subsidy transparency.
The former USTRs agreed that getting trade deals approved by Congress in the near term is unlikely. Barshefsky said that one of the reasons that “TPP became so hotly politicized was because members would have to vote on it.” Brock added, “I’ve never seen the Congress as divided as it is. It is bitterly partisan, it is mean-spirited, and the good ones are leaving.” He named Sen. Rob Portman, R-Ohio, as an example of a “good one” who is quitting the Senate. Portman is also a former USTR. “The Congress is unable to focus, and I don’t see that changing, for a while anyway,” Brock said.
Reinsch said he expects 2021 to be a year when the U.S. tries to rebuild relationships with Europe, starting with NATO. He acknowledged that getting the European Union and the U.S. on the same page when it comes to China is challenging. He said some European countries' view is that “Europe should be a third force independent of China and independent of the United States.”
He said it's important to get countries to coordinate a carbon border adjustment, because otherwise, manufacturers in countries imposing carbon taxes will find their manufacturing industries undercut by imports from countries that aren't tackling climate change in that way. He said he's concerned that EU might move forward on its own with a carbon border adjustment. “That might lead to retaliation,” he said.
Barshefsky said one of the thorny questions on trade policy and climate change will be to what extent government subsidies are warranted for green goods. “The country that has the most money to do that is China,” she said.