Lelo Nxumalo

KEY Trade Agreements China, Republic of Korea, and Japan Negotiations are under way for a trilateral free trade area among these three parties, which taken together account for 20% of global GDP [1] . The most recent–third round of negotiations– which covered intellectual property and goods and services was held in November 2013 in China. Below is basic information on these economies and the potential gains from the proposed FTA. About 18% of Japan’s exports already go to China as do a quarter of Korea’s. About one third of Korea’s goods exports are destined for China and Japan, and this value will increase with the creation of an FTA. By dollar value, however, China’s exports to Japan are the largest of the trio and Korea’s to Japan the least. Negotiations on a Japan-Korea bilateral FTA, which stalled in 2004, despite several attempts to revive them, have to contend with unresolved tensions stemming from the Japanese occupation of Korea in the first half of the 20th...

[This is a response memo in my Political Economy of Trade class at the Harvard Kennedy School of Government]  When seeking redress against dumping and unfair competition due to subsidization of imports, an importing country is permitted under WTO Law to protect itself provided it can prove material injury. The protection may take the form of ‘safeguards measures’, ‘antidumping duties’ or ‘countervailing duties’. ‘Antidumping duties’ are tariffs in addition to ordinary customs duties that are imposed to counteract certain ‘unfair’ pricing practices by private firms that cause or threaten to cause ‘material injury’ to a competing industry in an importing nation. ‘Countervailing duties’ are tariffs that are imposed to counteract certain subsidies bestowed on exporters by their governments, when they cause or threaten to cause material injury to a competing industry. In this memo, I discuss antidumping duties and countervailing duties since they relate explicitly to dumping and su...