http://online.wsj.com/article/SB120475150477614511.html

This article, published couple of weeks ago, discusses the ‘unfair’ practice by US Customs who were making shrimp importers post a surety bond as insurance for the antidumping tariff. The article calls the suspicious bond as “a novel accounting trick”. As a result of the bond, many shrimp importers were being run out of business as they had to overextend their credit lines. Nevertheless, the bond has been determined by a WTO panel as inconsistent with America’s WTO obligations. The unfairness is clearly evident, as dumping tariffs are not supposed to be protectionist tool that completely impede any foreign imports.

An interesting aspect of the imposition of the bond is how lobbying groups from shrimp producing States are more powerful in Congress than shrimp importing States. Whenever we have discussed antidumping in class, it is important to always consider the internal politicking that goes on in the halls of Congress between the different States. At the end of the day, the concept of antidumping has been continuously misused as a way to protect local industry rather than create a fair trade system. It seems as if the WTO panel has to constantly be on the watch for this because politicians are looking out for their local constituents more. As we have seen in our case studies, however, WTO has given the member countries’ local authorities considerable leeway in determining antidumping tariffs. However, with the imposition of this bond, the penalty was so great that it was irrefutable that the bond was purely protectionist. The article ends by saying that such measures are not in America’s interest, because they hurt America’s credibility. As we have seen in class, however, that credibility does not seem to be strong already.

submitted by: Mohammad