NAFTA Chapter 19 Binational Panel Reviews - Still a Zero Sum Game: The Wire Rod Decision and its Progeny
Notice bibliographique
Résumé
-The Government of Canada, the Government of the United Mexican States and the Government of the United States of America, resolved to: . . . ESTABLISH clear . . . rules governing their trade . . . --North American Free Trade Agreement, Preamble ¶ 61-[B]inational panel review . . . does not create either a new source of U.S. law or a new (and potentially divergent) interpretation of U.S. [antidumping] . . . law in cases on Canadian products. Given the . . . fact that panels must apply U.S. law . . . we anticipate consistency between panel and court decisions.-Jean Anderson, U.S. Department of Commerce Attorney2-From a legal perspective . . . [Chapter 19] panel[s] are strictly circumscribed. [They are] governed by precedents of . . . the Federal Circuit when reviewing an International Trade Administration or U.S. International Trade Commission final determination.-Michael H. Greenberg, former Chapter 19 Chairman3INTRODUCTIONOn November 28, 2007, a binational panel, created under Chapter 19 of the North American Free Trade Agreement (-NAFTA)4 issued a decision in Carbon and Certain Alloy Steel Wire Rod From Canada (-Wire Rod).5 The Wire Rod panel broke with NAFTA's unambiguous directives by incorrectly discerning the applicable standard of review in ruling against the U.S. Department of Commerce (-Commerce).6 The panel's reasoning circumvented what should have been binding U.S. law and NAFTA's text, and further convoluted an already inconsistent body of Chapter 19 decisions.7The Wire Rod case concerned the trade issues of dumping and zeroing. In international trade, dumping occurs when a company sells an export for less than its fair value in the importing market, attempting to corner that particular market.8 To combat this, the importing state may impose tariffs known as antidumping duties.9 Zeroing10 was a former U.S. pricing policy used by Commerce whereby any exports sold above the domestic fair value of that product are not factored into antidumping duty calculations.11 Zeroing was controversial because it often culminated in drastically increased export duties for foreign manufacturers.12 Despite a vast body of international jurisprudence outlawing zeroing, U.S. courts sanctioned the practice.13Under NAFTA Chapter 19, a petitioner14 alleging injury from Commerce's antidumping calculations may request a review by a binational panel in lieu of domestic judicial review in the U.S.15 NAFTA, while an international legal instrument, instructs its Chapter 19 panels to apply the importing party's domestic antidumping law.16 Despite this clear directive however, the Wire Rod majority discerned an incorrect standard of review by disregarding then-binding U.S. antidumping and zeroing jurisprudence and citing in error to World Trade Organization (-WTO) antidumping law over U.S. law in holding for the Petitioner.17This Comment addresses the Wire Rod holding and argues that the majority's ruling was incorrect due to unsound treaty interpretation, misapplication of WTO law, and disregard for controlling U.S. jurisprudence. Despite Commerce's recent decision to abandon the zeroing methodology entirely, the focus of this Comment is to underscore the ambiguous language of NAFTA with respect to Chapter 19 antidumping reviews. Part II of this Comment discusses the international legal significance of dumping and zeroing.18 Part II also outlines U.S. antidumping law and its administration, as well as the relationship of WTO jurisprudence to U.S. law.19 Additionally, Part II explains NAFTA's method for resolving antidumping disputes under Chapter 19, and discusses several U.S. legal doctrines that aid Chapter 19 panels in determining U.S. international legal obligations.20 Part II concludes with a summary of the Wire Rod decision, focusing on the underlying facts and key parts of the majority's reasoning.21 Part III argues that the Wire Rod holding was incorrect because the majority incorrectly ascertained the proper standard of review by misinterpreting NAFTA. …
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