In Fall 2013, as a student in Professor Robert Lawrence's Political Economy of Trade course at the Harvard Kennedy School, I explored a fundamental question: Do the anti-dumping and subsidies rules of the WTO help ensure that trade is fair and beneficial?
My answer then was cautiously optimistic but wary. Drawing on economists like Alan Sykes, I noted a critical paradox: while subsidized or dumped imports may violate trade rules, they often benefit importing countries through lower prices and improved terms of trade. The economic case for trade remedies was weak—"the only plausibly useful function of antidumping laws from an efficiency standpoint is the avoidance of predatory pricing," which antitrust laws could handle. Yet anti-dumping duties were already the most frequently used trade remedy, with China as the primary target.
I concluded that these remedies served more as political safety valves than economic tools—necessary to maintain support for open trade, even when economically suboptimal.
What's Changed: A System in Crisis
Twelve years later, the question is more urgent and the answer darker. Three major developments have transformed the landscape:
First, the WTO's dispute settlement system collapsed. In December 2019, the United States paralyzed the Appellate Body by blocking appointments, reducing it below the three-member quorum needed for appeals. Since then, countries have engaged in "appealing into the void"—filing appeals to a non-functional body to prevent adverse rulings from becoming binding. The very mechanism meant to ensure fair application of trade remedy rules has become a tool to avoid accountability.
Second, trade remedies have intensified and militarized. As of 2025, 62 countries have imposed 207 restrictions against Chinese steel products alone. The US doubled its steel tariff on China to 50% in June 2025. These measures far exceed traditional WTO remedies and signal a shift toward strategic trade controls.
Third, new battlegrounds have emerged. In October 2024, the EU imposed countervailing duties of 7.8% to 35.3% on Chinese electric vehicles after an unprecedented investigation launched without industry complaint. China retaliated with investigations into EU brandy, pork, and dairy—demonstrating how trade remedies have become weapons in geopolitical competition. The EV vote was highly controversial, with Germany and nine other EU members opposing or abstaining.
Lawrence's Evolving Perspective
Professor Lawrence's recent work illuminates these tensions. In his 2023-2024 book "Behind the Curve: Can Manufacturing Still Provide Inclusive Growth?" he questions whether trade remedies achieve their stated goal of protecting manufacturing jobs. He notes that "the rise of political populism and economic protectionism are serious barriers" to addressing global challenges like climate change.
Lawrence emphasizes "there's an optimal pace of change from a political standpoint"—acknowledging that while free trade benefits countries long-term, the transition requires managing political consequences. This nuanced view validates the political function of trade remedies while questioning whether current practices serve anyone's interests.
The Verdict
Do anti-dumping and subsidies rules help ensure fair and beneficial trade? They can, but increasingly they don't.
The erosion of multilateral discipline, the paralysis of dispute settlement, and the weaponization of trade remedies have transformed them from occasional tools for addressing genuine unfair competition into routine instruments of economic nationalism. The "appealing into the void" phenomenon creates a two-tier system where powerful countries ignore adverse rulings while weaker countries cannot.
Yet abandoning these rules entirely would likely make matters worse. The challenge is restoring effective multilateral oversight, updating rules for 21st-century challenges like climate subsidies, and rebuilding dispute settlement to distinguish legitimate remedies from protectionist abuse.
As Lawrence's work reminds us, trade policy must balance economic efficiency with political sustainability. The task ahead is reform, not abandonment—though whether the political will exists for such reform remains an open question.
Based on my analysis from ITF-110: The Political Economy of Trade, Harvard Kennedy School, Fall 2013
Comments
Post a Comment
Constructive feedback is always welcome. Thank you